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The mainstream response to this debacle is a bit incomprehensible. FTX was the antithesis of cryptocurrency; it was a centralised exchange, that was also tryin
by Laaas 4y ago
The mainstream response to this debacle is a bit incomprehensible.
FTX was the antithesis of cryptocurrency; it was a centralised exchange, that was also trying to become a bank, and was AFAICT trying to kill DeFi [0].
The failure/success of FTX has no relation to the soundness of cryptocurrency.
I do however hope that this crash means fewer people will speculate on the prices such that it can finally stabilise a bit (and be useful without using stablecoins).
[0] https://www.coindesk.com/policy/2022/11/15/the-sbf-bill-whats-in-the-crypto-legislation-backed-by-ftx-founder/ https://www.coindesk.com/policy/2022/11/15/the-sbf-bill-what...
- godzillabrennus 4y agoI love the irrational optimism you have for this solution in search of a problem.
- Victerius 4y ago> FTX was the antithesis of cryptocurrency No true scotsman. "The USSR wasn't real communism." What cryptocurrency could be or should be in an ideal world is irrelevant. If cryptocurrency fails to live up to its ideals, it may be because these ideals are impossible to fulfill. That could be due to technological limitations, human nature, or something else. And in this case, we have no choice but to judge crypto for what it looks like in the world of today. What matters is what cryptocurrency looks like in practice. And that is FTX, Mt Gox, Three Arrows, and others. Crypto isn't sound enough to have mass adoption. The USSR was real communism. And FTX is crypto principles at work.
- whatwherewhy 4y agoI'm a user of Bitcoin and I never used any exchange.
- legitster 4y agoOkay, pray tell, how do you buy bitcoin?
- whatwherewhy 4y agoFrom people around me, in person.
- chrstphrknwtn 4y agoAh, that settles it then.
- certifiedloud 4y agoGenuine question: How do you use it? Do you mean you use it to make purchases, or do you mean you hold it as a store of value, and that's the use? Something else?
- whatwherewhy 4y agoI don't hold Bitcoin. I use it for cross-continent transactions. I buy it from people in my city using a local FB group or (way in the past) Localbitcoins.com and then send it to the recipient. They usually use Localbitcoins to convert it to their own currency AFAIK. The fees (transfer and exchange) are much lower this way - usually less than 0.5% all things considered. Compared to $100+ fee to just transfer the money + 5-10% currency exchange fee (both my and the recipient's currency aren't the most well known).
- certifiedloud 4y agoHow long does it take for a typical transaction to finalize?
- whatwherewhy 4y ago2 days - I get the BTC around noon, transfer it immediately, in the evening I get a confirmation from the recipient that they got it, and then I see them transfer it to someone the second day. Sometimes it's just 1 day.
- lupire 4y agoTo get that rate, how much do you have to send in one batch? Just obtaining Bitcoin is expensive unless you have a high trust off-chain method to prevent double-spending.
- whatwherewhy 4y agoI'm usually sending around $500-$1000 once every 2-3 months (per contractor - I work with multiple).
- frereubu 4y agoThat's irrelevant to the comment you're responding to. The point is that there may be people who use it rationally, but how it works in the real world now that it's leaking out beyond its initial user base is getting really problematic.
- whatwherewhy 4y agoIt works in real world without any exchanges. All of them could crash and burn and Bitcoin would continue on.
- Victerius 4y agoSure, for the 2,000 people who use it without exchanges. (made up number)
- colesantiago 4y agoSo when are you going to sell your Bitcoin when it goes to $5K or more realistically less than $5K?
- whatwherewhy 4y agoI don't hold Bitcoin. I use it for cross-continent transactions.
- Victerius 4y agoWhy do you need to send money across continents?
- whatwherewhy 4y agoI pay for software engineering work done in Africa and sometimes South-East Asia.
- colesantiago 4y agoYou do realise this is nothing new and you can use TransferWise, MPesa or PayTM for this right? Bitcoin is slower than all this and violently fluctuates which loses people's money quickly. People also need to pay their bills in fiat anyway so whoever is receiving the Bitcoin needs to cash out to fiat anyway. At that point you might as well just use fiat instead.
- whatwherewhy 4y agoAll of these options you listed are significantly more expensive, and some of the contractors I work with don't even have that option due to KYC requirements - these people don't have access to functioning governments, they don't have passports. Also, most of my contractors don't use/have bank accounts (because where they live it costs money to have one) - so no way to take out the money if they used these services. I did this dance at least 100 times and never ever had a problem with price fluctuation. Bitcoin is pretty stable on a 3-day timeframe.
- rhn_mk1 4y agoThis is a silly criticism, as long as the concepts of "cryptocurrency as a decentralized idea" and "cryptocurrency as many people use it in practice" are described by a single word. If the article is correct about "practicurrency", then you're responding to someone saying that it won't affect "decencurrency". One of them is indeed not a Scotsman. All you're saying is that the word has more than one definition for two wildly different things.
- Victerius 4y agoIt is impossible for a monetary system to be decentralized, safe, and have mass adoption. Because security requires either inconvenience or centralization, and inconvenience is a hard barrier to mass adoption.
- redox99 4y agoIt's not "no true scotsman". People here did not own any crypto. It's a simple fact, not some nebulous idea of what is or isn't communism. People gave money to fraudsters, who said "give us money and we'll hold crypto on your behalf", but FTX didn't actually have that crypto. They just ran with the money.
- pa7x1 4y agoI get the point and I can understand how it can feel like that from the outside. But the same people that are saying that FTX is not crypto now, were saying it before and same applies to Coinbase, Kraken, Binance... Luna and Terra were crypto, though, economically unsound design with Ponzi economics but crypto. And the litmus test is actually super simple and foolproof. Does whatever you are doing settle a transaction in a public, tamper-resistant ledger that is cryptographically verifiable? FTX business and operations does not involve such a thing. It's a traditional corporation, established in the Bahamas, running some SQL/noSQL DB or perhaps more likely paper napkins as a system of record... And as such was vulnerable to the same kind of abuses that have plagued financial fraud forever. Here is actual projects that are implemented in a blockchain: - A exchange, e.g. Uniswap: https://uniswap.org/ https://uniswap.org/ Here is a smart contract that executes its transactions: https://etherscan.io/address/0x68b3465833fb72a70ecdf485e0e4c7bd8665fc45 https://etherscan.io/address/0x68b3465833fb72a70ecdf485e0e4c... You can see the transactions live. You can see the code that runs this exchange: https://etherscan.io/address/0x68b3465833fb72a70ecdf485e0e4c7bd8665fc45#code https://etherscan.io/address/0x68b3465833fb72a70ecdf485e0e4c... - Lending and borrowing, e.g. Aave: https://aave.com/ https://aave.com/ - Decentralized staking, e.g. RocketPool: https://rocketpool.net https://rocketpool.net ... Nothing of this has failed. It's working 24/7 without maintenance windows. Everything is on-chain, publicly verifiable, automated and involves no humans.
- tyree731 4y agoSoundness of the technology? No. People’s willingness to use it? Absolutely.
- jimcavel888 4y ago
- jonathanstrange 4y agoCan I still have a local crypto wallet on my hard disk that contains my bitcoins and transfer coins to it from exchanges or when people pay me?
- jimpudar 4y agoThe short answer is yes, but your question implies a fundamental misunderstanding of Bitcoin and blockchains. The coins do not exist "in your wallet" - the wallet just holds your keys that prove you own some of the coins visible to everybody on the public blockchain. If you want a really great learning aid, search for "Island of Yap Blockchain" and read any of the million articles about it.
- lupire 4y agoYes, and a dollar bill in my pocket isn't money, just a taxpaying scrip that can be used as an IOU with people who are interested in taxpaying scrip.
- kojeovo 4y agoAren't basically all of crypto transactions facilitated by centralized exchanges? Why is FTX alone the antithesis?
- wollsmoth 4y agoProbably most of the ones exchanging fiat for cryptocurrency. But you can use defi if you want to swap crypto for crypto, and you can always send direct to buy something, although most merchants probably immediately convert to fiat using an exchange.
- sschueller 4y agoNo, you can trade crypto on a decentralized exchange like a token trading contract on ethereum. You do have the risk of bugs in the code or poorly coded contracts with backdoor but the code is public.
- yieldcrv 4y agoNo, decentralized exchanges have had more volume and liquidity than centralized exchanges for 2 years.
- kojeovo 4y agoCuz of NFTs?
- yieldcrv 4y agoNot because of NFTs, people that chose to learn how to use crypto natively find it easier, faster and less of a hassle, than the people that chose to say these are insurmountable barriers to adoption and stick with those custodial exchanges Just like with general computer use, after a certain point people can’t blame the user experience on their own incompetence
- Nursie 4y agoIt was everything cryptocurrency - flim-flam, inflated values, the whole thing being based on hot air, technological pipe-dreams and unrealistic ideals. Like it or not, this is the cryptocurrency ecosystem, and it has everything to do with cryptocurrency being an unregulated wild west of dodgy finance, scams and fraud. Cryptocurrency has enabled this stuff. You might not like that this is where it's gone, but it is a direct consequence of the ideals of unregulated 'money'. The scammers and the chancers move in, because why wouldn't they? Create a system that is resistant to regulation and open to so much exploitation and they will exploit. The problem with hoping for stable valuations is that very, very few people are interested in that, because they can't get rich off it. I too hope that all of this crap dies and cryptocurrency goes back to being a handful of cypherpunks swapping tokens around, because at that point the great ripoff and fraud on the general public will have come to an end. Let's regulate all this the fuck out of existence. Sounds like everyone will be happy.
- lupire 4y agoTo be clear, Bitcoin was never meant as unregulated money, it was meant as an non-manipulatable supply of money. Nothing in Bitcoin is incompatible with government regulation of your computers or behavior.
- ren_engineer 4y agoawfully convenient how SBF was highly connected to the current leaders of the Federal Reserve and SEC and all this went down right as they are pushing for a Central Bank backed digital currency and gives them the perfect excuse to try and kill off actual crypto thesis-antithesis-synthesis
- deleted 4y ago[deleted]
- mjburgess 4y agoIt is the ray of light which exposes the ideological con taking place: trust between machines isnt trust in an economic sense. Centralisation of power has nothing to do with computer network decentralisation. The scam here is, at first, ideological. There's a techbro-libertarian wordplay taking place which must be exposed. The blockchain has nothing to offer "trust", "contracts", "rights", "rewards". Nothing. And much worse than this, it makes all of the existing problems with these "in western society" worse. What every single major "crypto" project exposes is the radical disconnect between building functioning social economic institutions and programming "on the chain". ie., what their collapse shows is that the emporer has no clothes. When this sinks in, that all we were ever talking about is a stupid append-only log, *then*, hopefully everything else falls away. As in, the homeopathic vial was only ever water, all along.
- mechanical_bear 4y agoI think you should get a basic understanding of the technology if you are going to comment on it.
- mjburgess 4y agoAh! I really don't get the idea of a distributed immutable append-only log which is reproduced on all clients and whose integrity is cryptographically guaranteed by recomputing hashes on each append. Nor do I understand anything at all about systems of power, accountability, the political intuitions of the state and the economy. I've no idea how central banks regulate the supply of money; i'm totally at a loss as to how trust in the ability for people to keep their promises is the guarantor of the value of money. I'm bamboozled by financial risk, and have no idea how productive economic systems create value by taking bets on economically productive activity. Rather, I'm a rube. I've been told that when you plug computers together and copy-paste cryptographic ledgers then we can get rid of The Fed. So that's what I choose to believe.
- mechanical_bear 4y agoWell, in the end, at least you admit it. ¯\_(ツ)_/¯
- pixel_tracing 4y agoThe big issue is that soundness of technology is great and all but money at the end of the day depends on social factors and practicality (not smart contracts, immutable transactions, merkle trees, etc.)
- stephc_int13 4y agoThis sounds a bit like the "no true scotsman".
- jahewson 4y agoCryptocurrency is the antithesis of cryptocurrency.
- deleted 4y ago[deleted]
- jmull 4y ago> FTX was the antithesis of cryptocurrency Not really. The narrative around crypto sells the idea of decentralization but doesn't deliver. (1) Put money into anything and people will show up to try to get as much as they can. That is: money is a centralizing force. (2) Crypto, the technology, doesn't have a mechanism in place to resist centralization -- one person or entity can own as much as they can get their hands on. Just (1) and (2) means centralization is built-in to crypto. There are some accelerants too, though: (3) Crypto resists regulation. What people think of as the decentralized nature of crypto is actually about resisting intervention by external parties. Obviously, that can be good, but also lets people buy, sell, trade, borrow, accumulate crypto without limits. (4) Crypto is confusing. I think this lets people believe the things about crypto they want to believe, leading the the wildly optimistic narratives around it. As long as there is money in crypto, you will see the same thing keep happening: money goes in, crypto moves around, for a while everything seems to be following the narrative, then, suddenly, the money is gone, the crypto is gone or worthless and we have some more threads about it on HN.