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I thought that was the whole point: unregulated (or at least extremely minimally regulated, preferably in a jurisdiction that has a looooong history of looking

by kjs3 4y ago

I thought that was the whole point: unregulated (or at least extremely minimally regulated, preferably in a jurisdiction that has a looooong history of looking the other way and in a perfect world with no extradition treaties), decentralized, anonymous financial systems. It doesn't surprise me in the least that these clowns were running across the high wire without a net using other peoples money. The fascinating part to me is that anyone didn't think this was the inevitable outcome. But then I spent an hour this morning with some banking industry blockchain folks spinning this as "well obviously this debacle is great because it finally will shake out the bad actors and leave just us good-guys taking crusty old banking into the glorious crypto future". Just like they've said about every debacle since Mt Gox.

anticrisis 4y ago
The whole circus is a mass delusion. I would really like to see some academic studies on the phenomenon.
- belter 4y ago
  I give you the studies: “In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.” ― Friedrich Nietzsche
- jeffskiling 4y ago
  Gustave Le Bon's The Crowd is pretty comic when things like this happen. Can find things straight out of the headlines but from 1895.
CuriousCosmic 4y ago
There's a weird split in the space in that regard. There's a lot of right-libertarian-esque "no gods or kings, only man" ethos in the cryptocurrency space but there's also been a lot of work trying to build the guard rails that are common to society into the systems. People like to joke that cryptocurrency is just right-libertarians speedrunning financial legislation history but the reality is more that a lot of the tools that governments use to make finance "safe" don't have well established parallels that work on a decentralised platform. A lot of that "speedrunning" is the people who are actually building things trying to figure out how to still have reasonable safety and stability without relying on a single government or power to enforce policy. Things like privacy preserving transactions/communication and decentralised consensus are useful and valuable features but it's taken years for game theorists and cryptographers to work out schemes that are even close to being sustainable at scale without compromising on priorities. Doubly so to build those tools for stability that are essential for a well functioning society such as the capacity for KYC, tax, and regulatory compliance without compromising on the above priorities. So in a sense that argument that "this is good because it shakes out the bad actors before they can do too much more damage" is accurate but not in the sense that it allows the "good guys" to continue in their glorious libertarian fantasy. Rather it's a good thing because it minimizes the potential damage that can be done until researchers and engineers can develop the technology to a degree that the average person could actually use it. It's a race against a regulatory clock and when it strikes midnight, unless there is a working example of a "good" and "safe" cryptocurrency, regulators will absolutely go for the throat. Unless the tech is sufficiently mature, they will divide the space into one that is illegal & only used by criminals and another which throws any semblance of decentralisation or privacy preservation out the window. This take is unfortunately fairly US- and Euro-centric but the reality is that those two sets of governments and regulatory bodies will be the ones to decide what form digital currency/digital assets take going forward.
- kjs3 4y ago
  I didn't say this was a right-libertarian thing, so I don't want anyone to think that was my bias here. I think it's clear that there are hucksters of all stripes jumping on this bandwagon. That said, I think this is as insightful a summation of the situation I see in crypto as I've read recently. It's a race against a regulatory clock and when it strikes midnight... I may steal this gem. :-)
DennisP 4y ago
There was nothing decentralized about FTX. It was just a centralized exchange in the Bahamas that happened to trade crypto around. The whole point of defi is to build systems where nobody can do what FTX did. Uniswap for example doesn't even have admin functions. Nobody can move your funds on Uniswap besides you.

by kjs3 4y ago

anticrisis 4y ago

The whole circus is a mass delusion. I would really like to see some academic studies on the phenomenon.

belter 4y ago
I give you the studies: “In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.” ― Friedrich Nietzsche
jeffskiling 4y ago
Gustave Le Bon's The Crowd is pretty comic when things like this happen. Can find things straight out of the headlines but from 1895.

CuriousCosmic 4y ago

There's a weird split in the space in that regard. There's a lot of right-libertarian-esque "no gods or kings, only man" ethos in the cryptocurrency space but there's also been a lot of work trying to build the guard rails that are common to society into the systems. People like to joke that cryptocurrency is just right-libertarians speedrunning financial legislation history but the reality is more that a lot of the tools that governments use to make finance "safe" don't have well established parallels that work on a decentralised platform. A lot of that "speedrunning" is the people who are actually building things trying to figure out how to still have reasonable safety and stability without relying on a single government or power to enforce policy. Things like privacy preserving transactions/communication and decentralised consensus are useful and valuable features but it's taken years for game theorists and cryptographers to work out schemes that are even close to being sustainable at scale without compromising on priorities. Doubly so to build those tools for stability that are essential for a well functioning society such as the capacity for KYC, tax, and regulatory compliance without compromising on the above priorities. So in a sense that argument that "this is good because it shakes out the bad actors before they can do too much more damage" is accurate but not in the sense that it allows the "good guys" to continue in their glorious libertarian fantasy. Rather it's a good thing because it minimizes the potential damage that can be done until researchers and engineers can develop the technology to a degree that the average person could actually use it. It's a race against a regulatory clock and when it strikes midnight, unless there is a working example of a "good" and "safe" cryptocurrency, regulators will absolutely go for the throat. Unless the tech is sufficiently mature, they will divide the space into one that is illegal & only used by criminals and another which throws any semblance of decentralisation or privacy preservation out the window. This take is unfortunately fairly US- and Euro-centric but the reality is that those two sets of governments and regulatory bodies will be the ones to decide what form digital currency/digital assets take going forward.

kjs3 4y ago
I didn't say this was a right-libertarian thing, so I don't want anyone to think that was my bias here. I think it's clear that there are hucksters of all stripes jumping on this bandwagon. That said, I think this is as insightful a summation of the situation I see in crypto as I've read recently. It's a race against a regulatory clock and when it strikes midnight... I may steal this gem. :-)

DennisP 4y ago

There was nothing decentralized about FTX. It was just a centralized exchange in the Bahamas that happened to trade crypto around. The whole point of defi is to build systems where nobody can do what FTX did. Uniswap for example doesn't even have admin functions. Nobody can move your funds on Uniswap besides you.