5 ms·

The US dollar is used for shady stuff all over the world, but we’re not trying to ban it.

cooljacob204 4y ago
Yes but it's used by far for more legitimate stuff. I would argue crypto outside of investing is not. Also I don't want to ban crypto. I want to crack down on these exchanges which encouraged everyone to gamble on crypto and lost a ton of people money.
- aww_dang 4y ago
  The market is cracking down on these exchanges by bankrupting them. I'd prefer a privately run auditing and voluntary accreditation model.
danans 4y ago
> The US dollar is used for shady stuff all over the world, but we’re not trying to ban it. That is because it is overwhelmingly used for standard non-shady stuff, like trading legal goods and services. Crypto can't make a similar claim.
- throwup 4y ago
  https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3942181 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3942181 > For example, illegal transactions, scams and gambling together make up less than 3% of volume.
  - sokoloff 4y ago
    What constitutes a "scam" in the that paper? That paper treats all USDT (Tether) transactions as "not scam". I think that remains to be proven and I don't think it's anywhere near certain.
    - hellotomyrars 4y ago
      Tether is arguably itself a scam based on their incredibly creative account and likely outright lies about the backing of Tether.
      - aww_dang 4y ago
        Turtles all the way down. The US central bank backs the US dollar with "The full faith and credit of the US government" https://www.federalreserve.gov/faqs/currency_12770.htm https://www.federalreserve.gov/faqs/currency_12770.htm
        hellotomyrars 4y ago
        Sure, totally. But I trust the faith and credit of the US government a lot more than the faith and credit of Tether.
  - danans 4y ago
    You excluded the first part of that paragraph: > We show that the vast majority of Bitcoin transactions between real entities are for trading and speculative purposes. Starting from 2015, 75% of the real bitcoin volume has been linked to exchanges or exchange-like entities such as on-line wallets, OTC desks, and large institutional traders. So 75% of the transactions are just speculative trading, not transactions for goods or services, which is what is being discussed. Taking the paper's numbers at face value, as a percentage of non-speculative transactions, illicit transactions are 12%, which is quite high. There are also papers which quantify the amount of illegal activity as high as 46% [1] in 2018. Illicit activity is still probably the most durable use non-investment use-case for Bitcoin, and realistically will be the most enduring use case going forward. 1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3102645 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3102645
    - rsj_hn 4y ago
      In some sense, yes the ultimate purpose of a bearer currency in the era of government controlled custodial currencies is having a currency that the government can't seize from you or put prior restraint on you spending. Thus by definition, the main use case is "illicit". But remember that "illicit" also includes sending donations to protestors in Canada when the government froze their bank accounts, or sending payments to dissident organizations that have been blacklisted and denied banking services, etc. We can also say that the primary use case of signal is "illicit" communication -- that is, attempts to skirt eavesdropping by various government security organizations, and this is why Signal received funding from the U.S. government - it was a device to assist in coordinating anti-government protests in nations the US wanted to oppose. For the same reason, the U.S. Navy created and funded Tor. So this is a two way street -- the ability to send payments and securely communicate even if your government doesn't want you to do that is great when they are used to support dissidents in nations you oppose, but not so great when they are used for similar purposes at home, or when they are used for organized crime. Just because a technology's primary use case is "Illicit" doesn't mean it's not a valuable or useful technology.
    - throwup 4y ago
      Illegal transactions are also 11-12% of the USA's economy.[1] In 2019, forex volume was $6.6T per day [2], or $1716T per year. Meanwhile global GDP was only $87.5T [3]. In other words, almost 95% of global currency volume is speculation. Why would anyone use currencies that are mainly used for speculation? Both the traditional and crypto economies are reflections of human behavior, but because crypto is more transparent, you can see it for yourself. And a lot of people don't like what they see. But it's not a new problem nor unique to new currencies or technologies. [1]: https://www.investopedia.com/articles/markets/032916/how-big-underground-economy-america.asp https://www.investopedia.com/articles/markets/032916/how-big... [2]: https://www.financemagnates.com/institutional-forex/execution/bis-survey-daily-fx-volumes-jump-30-to-6-6-trillion-in-2019/ https://www.financemagnates.com/institutional-forex/executio... [3]: https://www.statista.com/statistics/268750/global-gross-domestic-product-gdp/ https://www.statista.com/statistics/268750/global-gross-dome...
- aww_dang 4y ago
  Use of the US dollar is compulsory. Thankfully, cryptocurrencies cannot make the same claim. https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law
- TacticalCoder 4y ago
  3% to 5% of the world's GDP is linked to criminal activities [1]. Cryptocurrencies are a drop in the bucket here. It doesn't even register. [1] And it's highly likely the CIA is still, in 2022, deeply tied in drug trafficking and drug money laundering.

Yes but it's used by far for more legitimate stuff. I would argue crypto outside of investing is not. Also I don't want to ban crypto. I want to crack down on these exchanges which encouraged everyone to gamble on crypto and lost a ton of people money.

aww_dang 4y ago
The market is cracking down on these exchanges by bankrupting them. I'd prefer a privately run auditing and voluntary accreditation model.

danans 4y ago

> The US dollar is used for shady stuff all over the world, but we’re not trying to ban it. That is because it is overwhelmingly used for standard non-shady stuff, like trading legal goods and services. Crypto can't make a similar claim.

throwup 4y ago
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3942181 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3942181 > For example, illegal transactions, scams and gambling together make up less than 3% of volume.
- sokoloff 4y ago
  What constitutes a "scam" in the that paper? That paper treats all USDT (Tether) transactions as "not scam". I think that remains to be proven and I don't think it's anywhere near certain.
  - hellotomyrars 4y ago
    Tether is arguably itself a scam based on their incredibly creative account and likely outright lies about the backing of Tether.
    - aww_dang 4y ago
      Turtles all the way down. The US central bank backs the US dollar with "The full faith and credit of the US government" https://www.federalreserve.gov/faqs/currency_12770.htm https://www.federalreserve.gov/faqs/currency_12770.htm
      - hellotomyrars 4y ago
        Sure, totally. But I trust the faith and credit of the US government a lot more than the faith and credit of Tether.
- danans 4y ago
  You excluded the first part of that paragraph: > We show that the vast majority of Bitcoin transactions between real entities are for trading and speculative purposes. Starting from 2015, 75% of the real bitcoin volume has been linked to exchanges or exchange-like entities such as on-line wallets, OTC desks, and large institutional traders. So 75% of the transactions are just speculative trading, not transactions for goods or services, which is what is being discussed. Taking the paper's numbers at face value, as a percentage of non-speculative transactions, illicit transactions are 12%, which is quite high. There are also papers which quantify the amount of illegal activity as high as 46% [1] in 2018. Illicit activity is still probably the most durable use non-investment use-case for Bitcoin, and realistically will be the most enduring use case going forward. 1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3102645 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3102645
  - rsj_hn 4y ago
    In some sense, yes the ultimate purpose of a bearer currency in the era of government controlled custodial currencies is having a currency that the government can't seize from you or put prior restraint on you spending. Thus by definition, the main use case is "illicit". But remember that "illicit" also includes sending donations to protestors in Canada when the government froze their bank accounts, or sending payments to dissident organizations that have been blacklisted and denied banking services, etc. We can also say that the primary use case of signal is "illicit" communication -- that is, attempts to skirt eavesdropping by various government security organizations, and this is why Signal received funding from the U.S. government - it was a device to assist in coordinating anti-government protests in nations the US wanted to oppose. For the same reason, the U.S. Navy created and funded Tor. So this is a two way street -- the ability to send payments and securely communicate even if your government doesn't want you to do that is great when they are used to support dissidents in nations you oppose, but not so great when they are used for similar purposes at home, or when they are used for organized crime. Just because a technology's primary use case is "Illicit" doesn't mean it's not a valuable or useful technology.
  - throwup 4y ago
    Illegal transactions are also 11-12% of the USA's economy.[1] In 2019, forex volume was $6.6T per day [2], or $1716T per year. Meanwhile global GDP was only $87.5T [3]. In other words, almost 95% of global currency volume is speculation. Why would anyone use currencies that are mainly used for speculation? Both the traditional and crypto economies are reflections of human behavior, but because crypto is more transparent, you can see it for yourself. And a lot of people don't like what they see. But it's not a new problem nor unique to new currencies or technologies. [1]: https://www.investopedia.com/articles/markets/032916/how-big-underground-economy-america.asp https://www.investopedia.com/articles/markets/032916/how-big... [2]: https://www.financemagnates.com/institutional-forex/execution/bis-survey-daily-fx-volumes-jump-30-to-6-6-trillion-in-2019/ https://www.financemagnates.com/institutional-forex/executio... [3]: https://www.statista.com/statistics/268750/global-gross-domestic-product-gdp/ https://www.statista.com/statistics/268750/global-gross-dome...
aww_dang 4y ago
Use of the US dollar is compulsory. Thankfully, cryptocurrencies cannot make the same claim. https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law
TacticalCoder 4y ago
3% to 5% of the world's GDP is linked to criminal activities [1]. Cryptocurrencies are a drop in the bucket here. It doesn't even register. [1] And it's highly likely the CIA is still, in 2022, deeply tied in drug trafficking and drug money laundering.