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Large amounts of fiat currency are heavy, bulky, and difficult to smuggle. The US got rid of $500 and $1K notes because they proved more useful for doing crimes

by giaour 4y ago

Large amounts of fiat currency are heavy, bulky, and difficult to smuggle. The US got rid of $500 and $1K notes because they proved more useful for doing crimes than for doing business, and the same happened with bearer bonds. Criminals will do bad things at scale with cryptocurrency. Ransomware existed before bitcoin, but the amounts demanded were pittances compared to what can be demanded today because the difficulty of using cash or the banking system for a transaction increases exponentially as the amounts involved increase.

ericmay 4y ago
Wire transfers exist. Paypal scams, etc. I'm just not convinced anything is fundamentally different here. It's a weak criticism. There are much better ones, and even this criticism is better served by arguing about tradeoffs and benefits instead of trying to find some way to express that Bitcoin is categorically different. It's hard to move cash, but it was harder to move gold ergo we should stop using cash because it's easy for criminals to move and use gold instead. That's the line of reasoning at play here that is espoused by this argument.
- giaour 4y ago
  Cryptocurrency is unique in that it allows pseudonymous, irreversible transactions of unbounded value. https://www.lawfareblog.com/ransomware-problem-bitcoin-problem https://www.lawfareblog.com/ransomware-problem-bitcoin-probl... is a good long-form write up of the argument if you're interested, or https://www.investopedia.com/articles/bonds/08/bearer-bond.asp https://www.investopedia.com/articles/bonds/08/bearer-bond.a... if you want to read about why we've prohibited financial instruments for similar reasons in the past. Wire transfers are also hard to reverse, but banks have security ceremonies around them to prevent misuse, and good luck to you if you want to pay a $20MM ransom with an international wire transfer. Even if you were able to find a banker who wouldn't call the FBI on you, the recipients of the transfer are exposing themselves to significant risk of capture by interacting with their local banking system and by providing you with the details of their account. Cash being convenient for small transactions and difficult to use for large ones is a deliberate feature. The point is to strike a balance between usability and vulnerability to misuse. E.g., you have to declare when you're moving more than $10K across an international border, and it's actually hard to smuggle that much cash due to the weight and bulk. Gold is also heavy and bulky, which is an important security feature of Fort Knox (even if you break in, how are you going to abscond with tons of gold bars?).

by giaour 4y ago

ericmay 4y ago

Wire transfers exist. Paypal scams, etc. I'm just not convinced anything is fundamentally different here. It's a weak criticism. There are much better ones, and even this criticism is better served by arguing about tradeoffs and benefits instead of trying to find some way to express that Bitcoin is categorically different. It's hard to move cash, but it was harder to move gold ergo we should stop using cash because it's easy for criminals to move and use gold instead. That's the line of reasoning at play here that is espoused by this argument.

giaour 4y ago
Cryptocurrency is unique in that it allows pseudonymous, irreversible transactions of unbounded value. https://www.lawfareblog.com/ransomware-problem-bitcoin-problem https://www.lawfareblog.com/ransomware-problem-bitcoin-probl... is a good long-form write up of the argument if you're interested, or https://www.investopedia.com/articles/bonds/08/bearer-bond.asp https://www.investopedia.com/articles/bonds/08/bearer-bond.a... if you want to read about why we've prohibited financial instruments for similar reasons in the past. Wire transfers are also hard to reverse, but banks have security ceremonies around them to prevent misuse, and good luck to you if you want to pay a $20MM ransom with an international wire transfer. Even if you were able to find a banker who wouldn't call the FBI on you, the recipients of the transfer are exposing themselves to significant risk of capture by interacting with their local banking system and by providing you with the details of their account. Cash being convenient for small transactions and difficult to use for large ones is a deliberate feature. The point is to strike a balance between usability and vulnerability to misuse. E.g., you have to declare when you're moving more than $10K across an international border, and it's actually hard to smuggle that much cash due to the weight and bulk. Gold is also heavy and bulky, which is an important security feature of Fort Knox (even if you break in, how are you going to abscond with tons of gold bars?).