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It was Charles Stross, I believe, who once described Bitcoin as an enormous social experiment educating hackers on the historical needs for financial regulation

by sho_hn 5y ago

It was Charles Stross, I believe, who once described Bitcoin as an enormous social experiment educating hackers on the historical needs for financial regulation.

latchkey 5y ago
Except that "financial regulation" doesn't seem to really stop much of anything in the traditional finance sector. How quickly we forget 2008 and the litany of other failures.
- sho_hn 5y ago
  Isn't that a whataboutism?
  - latchkey 5y ago
    "the technique or practice of responding to an accusation or difficult question by making a counteraccusation or raising a different issue." I didn't raise a different issue or make an accusation. I do agree that history plays an important part in the future, but the assumption that 'hackers' are not versed in history, seems awkward at best. Never mind that a lot of the people building DeFi and writing the contracts today, have traditional finance backgrounds.
    - sho_hn 5y ago
      What I meant is: The crypto space lacking regulation doesn't imply a claim that other currency systems don't also lack regulation in some form, nor that regulation is necessarily effective in either case. Stross didn't say regulation is perfect, he said it arose for a reason. Stross' original statement is about regulation of traditional systems having historic drivers the crypto community had yet to re-discover, in his opinion, either in terms of broad awareness or appreciation. Challenging that would be fine (and interesting); saying "so what if it's bad? this other thing is also bad", though ... FWIW, I think he's both right and wrong. I think there was a subset of the crypto community (and it likely strongly correlates with the productive one) aware of and actively rejecting a lot of history, but also a larger majority swept up in the hype without awareness of that information.
- tootie 5y ago
  The 2007-8 crisis wasn't about the illicit movement of money. In fact financial regulation is what allowed us to detect and mitigate the business practices that lead to the crisis. The response was the massive QE that everyone feared would lead to terrible consequences yet instead it spurred a soft landing to what could have been 100x worse. There were no bread lines, no mass displacement, no political turmoil. You can't stop people from losing money on bad investments but you can prevent it from pulling the rest of the world down and that's what happened. That crisis should have everyone on their knees in awe at the Altar of Fiat Currency.
  - kiba 5y ago
    It didn't really fix Americans' fundamentally dysfunctional relationship with housing. Now we live in an economy with asset inflation, and everyone's going "housing market is robust" as if that's a good thing. Sure, it doesn't 'hurt', but we're leaving huge amount of money on the table.
    - tootie 5y ago
      90% of the reason for that is fiscal policy, not monetary. Neither the Fed nor Satoshi can make houses get built faster.
  - spopejoy 5y ago
    Nah, but nice job whitewashing QE as anything but a massive upward wealth redistribution. Instead, the bad CDOs and CDSs could have just been unwound one by one with investment banks eating the losses and a lot of rich people becoming poor. Sure some _actual_ banks might have needed a holiday or two but instead we got TARP and QE.
jjoonathan 5y ago
Sure, but let's not pretend like bank regulations are perfect. Micro: Right this second, one of my checking accounts at a "reputable" institution (efirstbank.com) is blocked from ACH transfers until April due to hitting an inactivity threshold they refuse to elaborate on. The only way I can move money out is by paying $50 per wire. Macro: the BTC coinbase says it all: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"
- dralley 5y ago
  Bitcoin does not replace banks. People and business still need loans, they still want to invest money and have money invested with them. Crypto doesn't solve that problem. The 2008 collapse had nothing to do with ACH or any of the aspects which crypto has a plausible case for improving.
  - BLKNSLVR 5y ago
    My understanding is that (one of) the point(s) of Bitcoin was to de-centralise the control of the currency so that "banks getting a bailout" isn't possible since the currency control of Bitcoin doesn't allow printing it out of thin air for handing out to the businesses that caused the crash that seemingly necessitated the bailout. Secondly to that, I find it amusing that the cause of the GFC (amongst numerous other large-scale issues) is both poor regulation and ineffective enforcement of an industry that's over a century old. Proving, basically, that the regulation of cryptocurrency is a pure talk-fest (or that any US regulation is a pure talk-fest). It will result in the honest folks doing the right thing and getting screwed in the process whilst the dishonest still do the bad things because the US' will to enforce regulation is weak.
    - ohgodplsno 5y ago
      A few years later, the TheDAO hack happens, and Vitalik and friends pretty much force a fork on the network by spamming FUD and threatening to stop the entire thing because they're losing too much money and they're too big to fail. Totally different from banks: it's no longer the government deciding to bail them out, it's straight up the bank printing the currency telling people to bail them out or their currency becomes worthless.

by sho_hn 5y ago

It was Charles Stross, I believe, who once described Bitcoin as an enormous social experiment educating hackers on the historical needs for financial regulation.

latchkey 5y ago

Except that "financial regulation" doesn't seem to really stop much of anything in the traditional finance sector. How quickly we forget 2008 and the litany of other failures.

sho_hn 5y ago
Isn't that a whataboutism?
- latchkey 5y ago
  "the technique or practice of responding to an accusation or difficult question by making a counteraccusation or raising a different issue." I didn't raise a different issue or make an accusation. I do agree that history plays an important part in the future, but the assumption that 'hackers' are not versed in history, seems awkward at best. Never mind that a lot of the people building DeFi and writing the contracts today, have traditional finance backgrounds.
  - sho_hn 5y ago
    What I meant is: The crypto space lacking regulation doesn't imply a claim that other currency systems don't also lack regulation in some form, nor that regulation is necessarily effective in either case. Stross didn't say regulation is perfect, he said it arose for a reason. Stross' original statement is about regulation of traditional systems having historic drivers the crypto community had yet to re-discover, in his opinion, either in terms of broad awareness or appreciation. Challenging that would be fine (and interesting); saying "so what if it's bad? this other thing is also bad", though ... FWIW, I think he's both right and wrong. I think there was a subset of the crypto community (and it likely strongly correlates with the productive one) aware of and actively rejecting a lot of history, but also a larger majority swept up in the hype without awareness of that information.
tootie 5y ago
The 2007-8 crisis wasn't about the illicit movement of money. In fact financial regulation is what allowed us to detect and mitigate the business practices that lead to the crisis. The response was the massive QE that everyone feared would lead to terrible consequences yet instead it spurred a soft landing to what could have been 100x worse. There were no bread lines, no mass displacement, no political turmoil. You can't stop people from losing money on bad investments but you can prevent it from pulling the rest of the world down and that's what happened. That crisis should have everyone on their knees in awe at the Altar of Fiat Currency.
- kiba 5y ago
  It didn't really fix Americans' fundamentally dysfunctional relationship with housing. Now we live in an economy with asset inflation, and everyone's going "housing market is robust" as if that's a good thing. Sure, it doesn't 'hurt', but we're leaving huge amount of money on the table.
  - tootie 5y ago
    90% of the reason for that is fiscal policy, not monetary. Neither the Fed nor Satoshi can make houses get built faster.
- spopejoy 5y ago
  Nah, but nice job whitewashing QE as anything but a massive upward wealth redistribution. Instead, the bad CDOs and CDSs could have just been unwound one by one with investment banks eating the losses and a lot of rich people becoming poor. Sure some _actual_ banks might have needed a holiday or two but instead we got TARP and QE.

jjoonathan 5y ago

Sure, but let's not pretend like bank regulations are perfect. Micro: Right this second, one of my checking accounts at a "reputable" institution (efirstbank.com) is blocked from ACH transfers until April due to hitting an inactivity threshold they refuse to elaborate on. The only way I can move money out is by paying $50 per wire. Macro: the BTC coinbase says it all: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"

dralley 5y ago
Bitcoin does not replace banks. People and business still need loans, they still want to invest money and have money invested with them. Crypto doesn't solve that problem. The 2008 collapse had nothing to do with ACH or any of the aspects which crypto has a plausible case for improving.
- BLKNSLVR 5y ago
  My understanding is that (one of) the point(s) of Bitcoin was to de-centralise the control of the currency so that "banks getting a bailout" isn't possible since the currency control of Bitcoin doesn't allow printing it out of thin air for handing out to the businesses that caused the crash that seemingly necessitated the bailout. Secondly to that, I find it amusing that the cause of the GFC (amongst numerous other large-scale issues) is both poor regulation and ineffective enforcement of an industry that's over a century old. Proving, basically, that the regulation of cryptocurrency is a pure talk-fest (or that any US regulation is a pure talk-fest). It will result in the honest folks doing the right thing and getting screwed in the process whilst the dishonest still do the bad things because the US' will to enforce regulation is weak.
  - ohgodplsno 5y ago
    A few years later, the TheDAO hack happens, and Vitalik and friends pretty much force a fork on the network by spamming FUD and threatening to stop the entire thing because they're losing too much money and they're too big to fail. Totally different from banks: it's no longer the government deciding to bail them out, it's straight up the bank printing the currency telling people to bail them out or their currency becomes worthless.