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"Crypto mathematically prevents fraud" Uh what? How could it do that. Fraud isn't even a technical layer issue. It's an identity issue and identity is pretty m

"Crypto mathematically prevents fraud" Uh what? How could it do that. Fraud isn't even a technical layer issue. It's an identity issue and identity is pretty much entirely abstracted out of the crypto ecosystem. So, if you think about it that way, it's actually impossible for crypto to "mathematically prevent fraud". That you even said something so ridiculous without any reflection speaks to your intuitions in this space.

andirk 4y ago
If you are the one with a password aka private key to an address that holds the coins on whatever reputable chain, then you are the sole owner of said coins. It's that simple. Things get complicated, ironically for the sake of being less complicated, when there is a centralized authority in the middle who holds control of those addresses and their respective private keys. I use centralized exchanges plenty, and I am also aware that it defeats a large portion of the whole trustless money thing. Therefore, I also keep crypto offline in cold storage. Those addresses and the coins involved will go with me to the grave or until someone threatens me with a hammer.
dysarray 4y ago
People really think "cryptocurrencies are based on code" means no fraud can happen with them. The decentralized nature of most cryptocurrencies makes it difficult for a single entity to manipulate the market or falsify transactions, but it does not completely eliminate the possibility of fraud. In addition, the anonymity of many cryptocurrencies can make it difficult to trace the source of fraudulent activity, which can make it harder to prevent or prosecute.
- PaulHoule 4y ago
  And you don’t have the culture of controls that exist at real financial institutions. Often you hear a story of some firm like Amaranth or M.F. Global that blew up and what you always find is that the basic controls that prevent an organization from taking on disasterous positions are not in place. It’s a simple truth that an investment fund that is getting more deposits from withdrawals can vaporize the money and not have any problems until people ask for the money back. That is why financial institutions need strict controls.
  - siftrics 4y ago
    ...or we could just mathematically prevent the investment funds from stealing the funds.
    - freejazz 4y ago
      You apparently can't even comprehend the difference between theft and fraud.
      - siftrics 4y ago
        The fraud that occurred is SBF said users retain the title to their deposits and, quote, "we do not invest user deposits, not even in bonds" and yet he _did_ take user deposits. He defrauded them by taking their funds. This is also known as theft. This type of fraud, which also counts as theft, is not possible with self-custodied funds.
        freejazz 4y ago
        Theft and fraud aren't the same thing. Obviously, one can commit theft by the means of fraud. Fraud is a personal representation and trust relationship, and cannot be solved by a mathematical equation. A DEX might preclude the need for trust relationships in order to prevent the circumstances that make fraud possible, but it doesn't solve for fraud and, as FTX proved, crypto itself (using the commonly understood term, as opposed to the one you invented where the only things that are crypto are DEX) doesn't solve for fraud.
        siftrics 4y ago
        > Theft and fraud aren't the same thing. I never said they were. > A DEX might preclude the need for trust relationships in order to prevent the circumstances that make fraud possible So you agree? You just admitted that DEXs would have prevented SBF from committing this fraud. That's what I'm trying to convince you of. Those who do not distinguish self-custodied funds from non-self-custodied funds, like you refuse to do, will continue to be defrauded and stolen from.
- ditonal 4y ago
  No, people think that if self-custody your private keys carefully, nobody can steal your coins. If you participate in actual DeFi where you keep your keys and participate via smart contracts, nobody can steal your coins. All of this was true and is true. What happened is that corporations adopted the language of cryptocurrency to mean something totally different to trick consumers, like calling FTX a DeFi platform. You want a villain, it ain’t the maxis who kept repeating “not your keys, not your coin”. It’s VCs like a16z, sequoias, and paradigm who lended credibility to centralized exchanges that defrauded people who ignored the cryptocurrency advocates. The FTX story only strengthens the facts and narratives the cryptocurrency advocates have been saying. The real fraud is happening in venture capital which is rotten to the core. And by the way, bitcoin is down this year but not nearly as much as VC darlings like Carvana and Affirm. VC is the scam. VC is the engine of pump and dumps in both TradFi and crypto centralized exchanges. The real voices of cryptocurrency have been vindicated.
  - freejazz 4y ago
    >"No, people think that if self-custody your private keys carefully, nobody can steal your coins." Yeah, people think that. But what does that have to do with FTX. Yeah, if you never sent money to FTX, they couldn't take it. What insight!
    - siftrics 4y ago
      It has to do with FTX because people are taking the FTX situation and using it to blame crypto. SBF stole users' deposits. Fact. SBF could not have done this had FTX been a self-custody DEX. Fact. Crypto's sole purpose is to prevent the theft that occurred. Fact. The theft happened because crypto was not used. The theft happened because users did not self-custody (which they could have, as is demonstrated by the billions of dollars custodied in numerous DEXs today). Fact.
      - freejazz 4y ago
        The fact that this happened in the crypto space is prima facie evidence that "Crypto's sole purpose is to prevent the theft that occurred. Fact." is wrong. Full stop.
siftrics 4y ago
It's the whole point. Only the person with the private key can move the funds. If this was on-chain, SBF would not have had their private keys and mathematically could not have moved their funds without their consent.
- freejazz 4y ago
  Did people not send their crypto to SBF via on-chain transactions? Oh? They did?
  - siftrics 4y ago
    Exactly: they did not control the private keys, so they were able to be defrauded. There are DEXs which you can deposit funds and retain full custody.
    - freejazz 4y ago
      So what? FTX was a crypto company in the crypto economy, trading crypto products. this is some sort of no true scottsman crypto bullshit. the crypto economy clearly exists well beyond DEX's and its also pretty clear that the vast majority of the money is on CEX's so what's your point??
      - siftrics 4y ago
        You're conflating off-chain traditional finance (rife with fraud and theft) with on-chain programs. We have never once seen someone successfully steal users' funds without access to their private keys. That's the entire point of crypto. Crypto never claimed to prevent fiat fraud. Crypto never claimed to prevent human custodians from absconding with funds.
        freejazz 4y ago
        Nah, I'm not arbitrarily deciding that CEX's "aren't crypto". It's a fallacy. No true crypto. No point in responding further to this approach.

andirk 4y ago

If you are the one with a password aka private key to an address that holds the coins on whatever reputable chain, then you are the sole owner of said coins. It's that simple. Things get complicated, ironically for the sake of being less complicated, when there is a centralized authority in the middle who holds control of those addresses and their respective private keys. I use centralized exchanges plenty, and I am also aware that it defeats a large portion of the whole trustless money thing. Therefore, I also keep crypto offline in cold storage. Those addresses and the coins involved will go with me to the grave or until someone threatens me with a hammer.

dysarray 4y ago

People really think "cryptocurrencies are based on code" means no fraud can happen with them. The decentralized nature of most cryptocurrencies makes it difficult for a single entity to manipulate the market or falsify transactions, but it does not completely eliminate the possibility of fraud. In addition, the anonymity of many cryptocurrencies can make it difficult to trace the source of fraudulent activity, which can make it harder to prevent or prosecute.

PaulHoule 4y ago
And you don’t have the culture of controls that exist at real financial institutions. Often you hear a story of some firm like Amaranth or M.F. Global that blew up and what you always find is that the basic controls that prevent an organization from taking on disasterous positions are not in place. It’s a simple truth that an investment fund that is getting more deposits from withdrawals can vaporize the money and not have any problems until people ask for the money back. That is why financial institutions need strict controls.
- siftrics 4y ago
  ...or we could just mathematically prevent the investment funds from stealing the funds.
  - freejazz 4y ago
    You apparently can't even comprehend the difference between theft and fraud.
    - siftrics 4y ago
      The fraud that occurred is SBF said users retain the title to their deposits and, quote, "we do not invest user deposits, not even in bonds" and yet he _did_ take user deposits. He defrauded them by taking their funds. This is also known as theft. This type of fraud, which also counts as theft, is not possible with self-custodied funds.
      - freejazz 4y ago
        Theft and fraud aren't the same thing. Obviously, one can commit theft by the means of fraud. Fraud is a personal representation and trust relationship, and cannot be solved by a mathematical equation. A DEX might preclude the need for trust relationships in order to prevent the circumstances that make fraud possible, but it doesn't solve for fraud and, as FTX proved, crypto itself (using the commonly understood term, as opposed to the one you invented where the only things that are crypto are DEX) doesn't solve for fraud.
        siftrics 4y ago
        > Theft and fraud aren't the same thing. I never said they were. > A DEX might preclude the need for trust relationships in order to prevent the circumstances that make fraud possible So you agree? You just admitted that DEXs would have prevented SBF from committing this fraud. That's what I'm trying to convince you of. Those who do not distinguish self-custodied funds from non-self-custodied funds, like you refuse to do, will continue to be defrauded and stolen from.
ditonal 4y ago
No, people think that if self-custody your private keys carefully, nobody can steal your coins. If you participate in actual DeFi where you keep your keys and participate via smart contracts, nobody can steal your coins. All of this was true and is true. What happened is that corporations adopted the language of cryptocurrency to mean something totally different to trick consumers, like calling FTX a DeFi platform. You want a villain, it ain’t the maxis who kept repeating “not your keys, not your coin”. It’s VCs like a16z, sequoias, and paradigm who lended credibility to centralized exchanges that defrauded people who ignored the cryptocurrency advocates. The FTX story only strengthens the facts and narratives the cryptocurrency advocates have been saying. The real fraud is happening in venture capital which is rotten to the core. And by the way, bitcoin is down this year but not nearly as much as VC darlings like Carvana and Affirm. VC is the scam. VC is the engine of pump and dumps in both TradFi and crypto centralized exchanges. The real voices of cryptocurrency have been vindicated.
- freejazz 4y ago
  >"No, people think that if self-custody your private keys carefully, nobody can steal your coins." Yeah, people think that. But what does that have to do with FTX. Yeah, if you never sent money to FTX, they couldn't take it. What insight!
  - siftrics 4y ago
    It has to do with FTX because people are taking the FTX situation and using it to blame crypto. SBF stole users' deposits. Fact. SBF could not have done this had FTX been a self-custody DEX. Fact. Crypto's sole purpose is to prevent the theft that occurred. Fact. The theft happened because crypto was not used. The theft happened because users did not self-custody (which they could have, as is demonstrated by the billions of dollars custodied in numerous DEXs today). Fact.
    - freejazz 4y ago
      The fact that this happened in the crypto space is prima facie evidence that "Crypto's sole purpose is to prevent the theft that occurred. Fact." is wrong. Full stop.

siftrics 4y ago

It's the whole point. Only the person with the private key can move the funds. If this was on-chain, SBF would not have had their private keys and mathematically could not have moved their funds without their consent.

freejazz 4y ago
Did people not send their crypto to SBF via on-chain transactions? Oh? They did?
- siftrics 4y ago
  Exactly: they did not control the private keys, so they were able to be defrauded. There are DEXs which you can deposit funds and retain full custody.
  - freejazz 4y ago
    So what? FTX was a crypto company in the crypto economy, trading crypto products. this is some sort of no true scottsman crypto bullshit. the crypto economy clearly exists well beyond DEX's and its also pretty clear that the vast majority of the money is on CEX's so what's your point??
    - siftrics 4y ago
      You're conflating off-chain traditional finance (rife with fraud and theft) with on-chain programs. We have never once seen someone successfully steal users' funds without access to their private keys. That's the entire point of crypto. Crypto never claimed to prevent fiat fraud. Crypto never claimed to prevent human custodians from absconding with funds.
      - freejazz 4y ago
        Nah, I'm not arbitrarily deciding that CEX's "aren't crypto". It's a fallacy. No true crypto. No point in responding further to this approach.