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How are scams and hype a thing only since 200 years ago? I'm trying to understand but the comment makes no sense if you know the history of finance. Btw it's s

How are scams and hype a thing only since 200 years ago? I'm trying to understand but the comment makes no sense if you know the history of finance. Btw it's somewhat ironic because Celsius is essentially a bank and not a blockchain company at all. They've simply found this niche where they're largely unregulated because they're dealing with tokens that are not considered legal tender in most countries and have super shady business practice when you look into it deeper. So this is essentially the old model, branded as blockchain and taking money from people who hold cryptocurrency but do not understand it. The likes who buy Dogecoin on Robinhood. If lending business were on-chain, everyone could look at the exact figures and observe the risks. Maker vaults aren't defaulting, are they? Also a smart contract once securely deployed can not be arbitrarily stopped. So there is no chance for anyone freeze your funds like this centralized platform does now. These are exactly the problems blockchains can solve, if people only understood and used them. With traditional banks, we've tackled the problem trying to use government regulation, but we all know it doesn't really work. Contracts that can not easily be gamed are a much better solution, at least for the base layer of financial system.

FormerBandmate 4y ago
This kind of stuff doesn't happen with normal banks. Wachovia and Washington Mutual essentially failed in 2008 and no one lost anything
- trompetenaccoun 4y ago
  That's the regulation I mentioned. I don't know these banks but would guess it's because they were insured. In the US and the EU all banks have to be insured to a degree. That's not necessarily true elsewhere, people around the world regularly do lose money in bank defaults. And entire countries can go bankrupt too, because the system ultimately has no failsafe. People in more stable countries like to dismiss that but depending on where you're from you can find examples of the entire nation losing practically everything only a few decades ago. Of course you could do the same with companies like Celsius and insure and regulate them better, but in the end customers are paying for it, it doesn't come free. Also big banks do still fail, are you aware how much money has been paid for bank bailouts just in the past decades? The thing is many don't notice they're paying for it, because they don't understand where the money comes from. My argument is that Celsius would never have gotten as big if the customers knew what happens with their money. This business model shouldn't even be legal, same as what many more traditional banks are involved in. In fact, often it isn't legal in the first place even according to current regulation. But once they get to a certain size, laws don't apply to them as they apply to the rest of us. This is a problem, regulation is clearly not working properly in the banking sector.
- jjav 4y ago
  > Wachovia and Washington Mutual essentially failed in 2008 and no one lost anything Account holders shouldn't have lost (haven't checked) but the stock evaporated overnight, so anyone holding any shares lost everything in a blink.
  - lizknope 4y ago
    I had around $47,000 in Wachovia in 2008. I was a Wachovia customer since 1991. I didn't lose a penny. Wells Fargo bought Wachovia and over the next year they automatically transitioned us to Wells Fargo accounts with the same login/password, account numbers, and my account balance. I'm still with Wells Fargo 14 years later and everything is fine.

FormerBandmate 4y ago

This kind of stuff doesn't happen with normal banks. Wachovia and Washington Mutual essentially failed in 2008 and no one lost anything

trompetenaccoun 4y ago
That's the regulation I mentioned. I don't know these banks but would guess it's because they were insured. In the US and the EU all banks have to be insured to a degree. That's not necessarily true elsewhere, people around the world regularly do lose money in bank defaults. And entire countries can go bankrupt too, because the system ultimately has no failsafe. People in more stable countries like to dismiss that but depending on where you're from you can find examples of the entire nation losing practically everything only a few decades ago. Of course you could do the same with companies like Celsius and insure and regulate them better, but in the end customers are paying for it, it doesn't come free. Also big banks do still fail, are you aware how much money has been paid for bank bailouts just in the past decades? The thing is many don't notice they're paying for it, because they don't understand where the money comes from. My argument is that Celsius would never have gotten as big if the customers knew what happens with their money. This business model shouldn't even be legal, same as what many more traditional banks are involved in. In fact, often it isn't legal in the first place even according to current regulation. But once they get to a certain size, laws don't apply to them as they apply to the rest of us. This is a problem, regulation is clearly not working properly in the banking sector.
jjav 4y ago
> Wachovia and Washington Mutual essentially failed in 2008 and no one lost anything Account holders shouldn't have lost (haven't checked) but the stock evaporated overnight, so anyone holding any shares lost everything in a blink.
- lizknope 4y ago
  I had around $47,000 in Wachovia in 2008. I was a Wachovia customer since 1991. I didn't lose a penny. Wells Fargo bought Wachovia and over the next year they automatically transitioned us to Wells Fargo accounts with the same login/password, account numbers, and my account balance. I'm still with Wells Fargo 14 years later and everything is fine.