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We all started off enthused about cryptocurrency and then the Wolf of Wall Street types co-opted it and ruined it for everyone pulling off the most sophisticate

We all started off enthused about cryptocurrency and then the Wolf of Wall Street types co-opted it and ruined it for everyone pulling off the most sophisticated Ponzi schemes in history. The only use-case for it now is for the criminal underworld (who have to somehow convert to fiat privately using novel techniques, and that gets harder with regulation and sanctions and outright banning of tumbler systems).

optimalsolver 4y ago
The capitalism was going great until actual capitalists got involved!
- wpietri 4y ago
  Right? The whole history of capitalism can be written in terms of "well that's fucked up, how can we patch that hole?" I used to work for traders on the Chicago Mercantile Exchange, a privately held marketplace for commodities and derivatives. It was an extremely capitalist place, and over the years it had evolved extremely tight internal regulations. You just did not fuck with the exchange or with your clearing firm. If you did, could end up a grease spot on the pavement. All the extreme capitalists I worked with were fine with that. They wanted to keep on making lots of money, and strong regulation created something where people felt safe engaging. That meant high-volume, high-velocity money flows. They were all greedy, but long-term greedy. I feel bad for the sweet summer children who were like, "We'll invent a money with no regulation and it will be utopia!"
  - JohnFen 4y ago
    Exactly this. Greed has never been good, but the entire premise of the US form of capitalism is that greed is inevitable, so we should try our best to make it as close to a force for good as possible. Even if the greedy people don't care about that.
- sumtechguy 4y ago
  Was any actual capital involved? That looks like a speculation bubble.
- IndoorPatio 4y ago
  +1
rednerrus 4y ago
Criminal Underworld was its best value add. It should have been the selling point all along. The idea that it's a store of value, and argument I've heard my smartest friends make, is testament to the adage "Greed makes man blind and foolish, and makes him an easy prey for death."
- kurisufag 4y ago
  it was always the selling point for XMR.
- dragonwriter 4y ago
  > Criminal Underworld was its best value add. It should have been the selling point all along. Hasn’t it been? I mean, aren’t the other stories largely just the things you say in polite company because “we are engaging in the business deliberately to enable and profit from the criminal underworld” has…potentially adverse social consequences.
- red-iron-pine 4y ago
  It was the main selling point. The Silk Road was a thing long before we started seeing celebrities shill crypto ads on TV. That and moving cash out of China / Russia / Saudi. You can see changes in the price to BTC (and housing in Vancouver, etc.) every time big moves like that happen, such as MBS taking over in Saudi, and Xi's anti-corruption purges in China.
samstave 4y ago
>>"Wolf of Wall Street types" Not so ironic ; wolf of wall street was funded by the billions stolen from Malaysia's pension funds and they threw huge parties and orgies in Vegas and paid off massive amount of douche-bag celebrities, including DiCaprio (who himself was a victim of trafficking in hollwood as a kid) as well as a bunch of other actors.... The wolf of wallstreet is basically the Inception of fraud IRL.
deweller 4y ago
The illicit share of all cryptocurrency transaction volume in 2022 was 0.24%. https://blog.chainalysis.com/reports/2023-crypto-crime-report-introduction/ https://blog.chainalysis.com/reports/2023-crypto-crime-repor...
- rco8786 4y ago
  Sorry but how on earth is this data supposed to be reliable when the underlying transactions are explicitly anonymous
  - dopidopHN 4y ago
    They are pseudo-anonymous at best.
    - rco8786 4y ago
      On an individual basis maybe, but on a macro statistical scale there is no way you can classify transactions as illicit or not with any remote degree of accuracy.
      - JohnFen 4y ago
        Oh, what a good point. There are different kinds of anonymity, I think. There's anonymity of the identity of people, and anonymity of the nature of the transaction. Most cryptocurrency is bad at the former and good at the latter.
        rco8786 4y ago
        Like heck, tradfi banks can't even do this and they have oodles of regulations and KYC laws and fraud/money laundering prevention mechanisms.
      - dopidopHN 4y ago
        What about “normal” financial illegal trades? Like wash trade and layered trade ? Those are detectable by analyzing the order book of exchanges for instance. No identity is needed
rco8786 4y ago
> The only use-case for it now is for the criminal underworld Perhaps that was the only use case for it all along
strict9 4y ago
>The only use-case for it now is for the criminal underworld You must not have a need to send money to recipients in other countries. I tried every option I could find until giving up in frustration and sending crypto instead. Not denying the negative aspects but it's a privileged position to assert criminality is the only use case.
- wpietri 4y ago
  I'd be interested to hear about your specific use case that made crypto better. What were the alternatives? What were the total costs for what you did versus the alternatives? But I imagine your specifics are quite rare. We've had a long time for crypto get significant market share for retail money transfer and it hasn't happened yet.
- noodlesUK 4y ago
  I’m curious, what countries are you trying to send money between? I’ve only ever really transacted with big countries’ currencies (EUR, USD, GBP, etc.), and I’ve found that the ordinary banking systems (especially with fintech like Wise) serve me quite well for this use case. I’d love to hear more about the flipside of that.
  - dopidopHN 4y ago
    Yeah. I work in crypto custody and I use Wise to send money in France.
  - JohnFen 4y ago
    There are nations where transferring money into and out of them with the standard systems is extremely expensive and/or can open you up to political persecution. There are other nations where it's just not realistically possible for the ordinary person.
    - FabHK 4y ago
      Do you think that fact is due to a technical limitation of fiat? Amenable to a technical solution? Or, is it rather maybe because of rules and regulations (that are roundly ignored by crypto)?
bko 4y ago
I guess you're technically in the criminal underworld if you want to hold a currency not approved by your state or you want to send money to a family member in [bad country] https://www.reuters.com/article/argentina-dollars/argentina-bans-buying-dollars-as-a-way-to-save-idUSL2E8I60BF20120706 https://www.reuters.com/article/argentina-dollars/argentina-...
leppr 4y ago
The "Wolf of Wall Street" types and various "crypto-bros" didn't "ruin it for everyone". They tarnished the connotation of the word "cryptocurrency", and wasted a lot of people of a lot of money. But their work has been mostly orthogonal to the real work on decentralized networks being done. > The only use-case for it now is for the criminal underworld This conclusion doesn't follow, neither logically nor empirically. [1] The exact opposite actually happened: we went from the vast majority of the volume being a darknet market, to most volume being saving/speculation and non-criminal e-commerce settlements. [1]: https://twitter.com/malekanoms/status/1626583628099784705 https://twitter.com/malekanoms/status/1626583628099784705
- arcticbull 4y ago
  It's been 14 years, billions in investment and roughly speaking zero non-criminal usage and no real-world killer use cases. That's just fact. Time to move on.
  - leppr 4y ago
    If anything, crypto at least seems to indirectly put food on your table, articbull. I would find it hard to believe you don't get any compensation from religiously covering every HN comment sections about crypto with misinformation. Surely your motives can't simply be the fear of being out of a job if bigtech fades into irrelevance. AI would logically be a way bigger threat to your occupation. Here are some stats for any passerby who might be convinced to think crypto really has ~zero non-criminal usage [1]. Surely calling 5-25% of many countries' populations criminals (including the US), should be relegated to a fringe extremist view. [1] https://triple-a.io/crypto-ownership-data/ https://triple-a.io/crypto-ownership-data/
    - smoldesu 4y ago
      If talking shit about cryptocurrency is a more reliable job than supporting it, I'd argue its time to move on. There was never a hope for Bitcoin replacing or even competing with regulated currencies. It had its fun in the sun, but now it (and just about every altcoin) will bleed their values from the layman's wallet while opportunists and whales exploit an already-broken economy. Depending on who you ask (or what chain you trade on) we're already there.
partiallypro 4y ago
I think there are use cases in countries that have currency collapses, but that doesn't happen at a high enough rate for it to be commercially viable. At this point it's pure speculation.
- WeylandYutani 4y ago
  Ofcourse but those have happened for ages. That's were the US dollar and euro come in. You do import/export business in Turkey with foreign currencies and foreign banks not worthless lira.
  - partiallypro 4y ago
    That can certainly help, but embargoes have prevented some countries that have experienced collapse to get their hands on more stable currencies like Euros or Dollars. For private citizens with no access to international forex markets, crypto can be valuable in such scenarios. Again, it happens so sporadically that it's not worthy of big money investment (certainly is no reason for Bitcoin to be worth $1M or whatever some people forecast)...but does show there is -some- use.
MPSimmons 4y ago
>We all started off enthused about cryptocurrency That's hilariously false.
- ChainOfFools 4y ago
  This reminds me of that other strategically amnesiac assertion popular with crypto apologists, that in the 90's "everybody" thought the internet was just a passing fad.
EFreethought 4y ago
> We all started off enthused about cryptocurrency Speak for yourself. Some of us saw right away it wasn't a solution looking for a problem, it was a scam looking for a mark.
pessimizer 4y ago
> The only use-case for it now is for the criminal underworld At least that added validity to the currency; but over time it's become increasingly less useful for any of the criminal underground other than middleweight tax dodgers, embezzlers, and people trying to beat embargoes or currency controls. My suspicion is that these generally elite crimes (by volume, not by incident count) are tolerable to elite decisionmakers, and the network enables covert transfer of funds to "freedom fighter" groups, informants, and politicians - so the US covert community can hide their activities within the swarm. They surely have the tools and funds to track and unmask everything going on in the network in real time, and if they see something they're truly bothered by, they can use a parallel construction to go after it. Bitcoin becomes Tor. edit: Back in the day you had to fill a plane with cash and fly it to the Contras. Hell, you had to fill a plane with drugs, fly the drugs to where you could sell them for cash, then fly the cash back. The CIA were very early victims of the cashless society.
suslik 4y ago
I know at least two use cases where crypto really shines: 1) fast international transfers, including to countries not fully connected to an international bank system, 2) receiving and sending secure donations that are not susceptible to credit card leaks and censorship and avoid the PayPal / Patreon tax, which is substantial. I use it for both, and it is great.
IndoorPatio 4y ago
1. Plenty of people have never been "enthused" and were always skeptical. 2. There was nothing sophisticated about crypto Ponzi schemes. It was always trivially obvious that if X money is used to purchase or prop-up crypto then X is all that is ever coming back out.
dragonwriter 4y ago
> We all started off enthused about cryptocurrency and then the Wolf of Wall Street types co-opted it and ruined it for everyone pulling off the most sophisticated Ponzi schemes in history. I mean, plenty of people were pointing out that trying to rewind finance to the era of privately-issued money without controls would lead to a recurrence of all the problems that that has historically produced and is the reason why that’s no longer a norm, while the entusiasts were just chanting “zero-trust” and “outside of government control”. We weren’t all enthused, or surprised with “the Wolf of Wall Street types”. (And I doubt very much the pioneers in the field were historically ignorant enough to not know exactly what they were creating.)
drewcoo 4y ago
Well there's been no real porn use for crypto, so the tech had no hope of really catching on like the VCR or the World Wide Web did.

optimalsolver 4y ago

The capitalism was going great until actual capitalists got involved!

wpietri 4y ago
Right? The whole history of capitalism can be written in terms of "well that's fucked up, how can we patch that hole?" I used to work for traders on the Chicago Mercantile Exchange, a privately held marketplace for commodities and derivatives. It was an extremely capitalist place, and over the years it had evolved extremely tight internal regulations. You just did not fuck with the exchange or with your clearing firm. If you did, could end up a grease spot on the pavement. All the extreme capitalists I worked with were fine with that. They wanted to keep on making lots of money, and strong regulation created something where people felt safe engaging. That meant high-volume, high-velocity money flows. They were all greedy, but long-term greedy. I feel bad for the sweet summer children who were like, "We'll invent a money with no regulation and it will be utopia!"
- JohnFen 4y ago
  Exactly this. Greed has never been good, but the entire premise of the US form of capitalism is that greed is inevitable, so we should try our best to make it as close to a force for good as possible. Even if the greedy people don't care about that.
sumtechguy 4y ago
Was any actual capital involved? That looks like a speculation bubble.
IndoorPatio 4y ago
+1

rednerrus 4y ago

Criminal Underworld was its best value add. It should have been the selling point all along. The idea that it's a store of value, and argument I've heard my smartest friends make, is testament to the adage "Greed makes man blind and foolish, and makes him an easy prey for death."

kurisufag 4y ago
it was always the selling point for XMR.
dragonwriter 4y ago
> Criminal Underworld was its best value add. It should have been the selling point all along. Hasn’t it been? I mean, aren’t the other stories largely just the things you say in polite company because “we are engaging in the business deliberately to enable and profit from the criminal underworld” has…potentially adverse social consequences.
red-iron-pine 4y ago
It was the main selling point. The Silk Road was a thing long before we started seeing celebrities shill crypto ads on TV. That and moving cash out of China / Russia / Saudi. You can see changes in the price to BTC (and housing in Vancouver, etc.) every time big moves like that happen, such as MBS taking over in Saudi, and Xi's anti-corruption purges in China.

samstave 4y ago

>>"Wolf of Wall Street types" Not so ironic ; wolf of wall street was funded by the billions stolen from Malaysia's pension funds and they threw huge parties and orgies in Vegas and paid off massive amount of douche-bag celebrities, including DiCaprio (who himself was a victim of trafficking in hollwood as a kid) as well as a bunch of other actors.... The wolf of wallstreet is basically the Inception of fraud IRL.

deweller 4y ago

The illicit share of all cryptocurrency transaction volume in 2022 was 0.24%. https://blog.chainalysis.com/reports/2023-crypto-crime-report-introduction/ https://blog.chainalysis.com/reports/2023-crypto-crime-repor...

rco8786 4y ago
Sorry but how on earth is this data supposed to be reliable when the underlying transactions are explicitly anonymous
- dopidopHN 4y ago
  They are pseudo-anonymous at best.
  - rco8786 4y ago
    On an individual basis maybe, but on a macro statistical scale there is no way you can classify transactions as illicit or not with any remote degree of accuracy.
    - JohnFen 4y ago
      Oh, what a good point. There are different kinds of anonymity, I think. There's anonymity of the identity of people, and anonymity of the nature of the transaction. Most cryptocurrency is bad at the former and good at the latter.
      - rco8786 4y ago
        Like heck, tradfi banks can't even do this and they have oodles of regulations and KYC laws and fraud/money laundering prevention mechanisms.
    - dopidopHN 4y ago
      What about “normal” financial illegal trades? Like wash trade and layered trade ? Those are detectable by analyzing the order book of exchanges for instance. No identity is needed

rco8786 4y ago

> The only use-case for it now is for the criminal underworld Perhaps that was the only use case for it all along

strict9 4y ago

>The only use-case for it now is for the criminal underworld You must not have a need to send money to recipients in other countries. I tried every option I could find until giving up in frustration and sending crypto instead. Not denying the negative aspects but it's a privileged position to assert criminality is the only use case.

wpietri 4y ago
I'd be interested to hear about your specific use case that made crypto better. What were the alternatives? What were the total costs for what you did versus the alternatives? But I imagine your specifics are quite rare. We've had a long time for crypto get significant market share for retail money transfer and it hasn't happened yet.
noodlesUK 4y ago
I’m curious, what countries are you trying to send money between? I’ve only ever really transacted with big countries’ currencies (EUR, USD, GBP, etc.), and I’ve found that the ordinary banking systems (especially with fintech like Wise) serve me quite well for this use case. I’d love to hear more about the flipside of that.
- dopidopHN 4y ago
  Yeah. I work in crypto custody and I use Wise to send money in France.
- JohnFen 4y ago
  There are nations where transferring money into and out of them with the standard systems is extremely expensive and/or can open you up to political persecution. There are other nations where it's just not realistically possible for the ordinary person.
  - FabHK 4y ago
    Do you think that fact is due to a technical limitation of fiat? Amenable to a technical solution? Or, is it rather maybe because of rules and regulations (that are roundly ignored by crypto)?

bko 4y ago

I guess you're technically in the criminal underworld if you want to hold a currency not approved by your state or you want to send money to a family member in [bad country] https://www.reuters.com/article/argentina-dollars/argentina-bans-buying-dollars-as-a-way-to-save-idUSL2E8I60BF20120706 https://www.reuters.com/article/argentina-dollars/argentina-...

leppr 4y ago

The "Wolf of Wall Street" types and various "crypto-bros" didn't "ruin it for everyone". They tarnished the connotation of the word "cryptocurrency", and wasted a lot of people of a lot of money. But their work has been mostly orthogonal to the real work on decentralized networks being done. > The only use-case for it now is for the criminal underworld This conclusion doesn't follow, neither logically nor empirically. [1] The exact opposite actually happened: we went from the vast majority of the volume being a darknet market, to most volume being saving/speculation and non-criminal e-commerce settlements. [1]: https://twitter.com/malekanoms/status/1626583628099784705 https://twitter.com/malekanoms/status/1626583628099784705

arcticbull 4y ago
It's been 14 years, billions in investment and roughly speaking zero non-criminal usage and no real-world killer use cases. That's just fact. Time to move on.
- leppr 4y ago
  If anything, crypto at least seems to indirectly put food on your table, articbull. I would find it hard to believe you don't get any compensation from religiously covering every HN comment sections about crypto with misinformation. Surely your motives can't simply be the fear of being out of a job if bigtech fades into irrelevance. AI would logically be a way bigger threat to your occupation. Here are some stats for any passerby who might be convinced to think crypto really has ~zero non-criminal usage [1]. Surely calling 5-25% of many countries' populations criminals (including the US), should be relegated to a fringe extremist view. [1] https://triple-a.io/crypto-ownership-data/ https://triple-a.io/crypto-ownership-data/
  - smoldesu 4y ago
    If talking shit about cryptocurrency is a more reliable job than supporting it, I'd argue its time to move on. There was never a hope for Bitcoin replacing or even competing with regulated currencies. It had its fun in the sun, but now it (and just about every altcoin) will bleed their values from the layman's wallet while opportunists and whales exploit an already-broken economy. Depending on who you ask (or what chain you trade on) we're already there.

partiallypro 4y ago

I think there are use cases in countries that have currency collapses, but that doesn't happen at a high enough rate for it to be commercially viable. At this point it's pure speculation.

WeylandYutani 4y ago
Ofcourse but those have happened for ages. That's were the US dollar and euro come in. You do import/export business in Turkey with foreign currencies and foreign banks not worthless lira.
- partiallypro 4y ago
  That can certainly help, but embargoes have prevented some countries that have experienced collapse to get their hands on more stable currencies like Euros or Dollars. For private citizens with no access to international forex markets, crypto can be valuable in such scenarios. Again, it happens so sporadically that it's not worthy of big money investment (certainly is no reason for Bitcoin to be worth $1M or whatever some people forecast)...but does show there is -some- use.

MPSimmons 4y ago

>We all started off enthused about cryptocurrency That's hilariously false.

ChainOfFools 4y ago
This reminds me of that other strategically amnesiac assertion popular with crypto apologists, that in the 90's "everybody" thought the internet was just a passing fad.

EFreethought 4y ago

> We all started off enthused about cryptocurrency Speak for yourself. Some of us saw right away it wasn't a solution looking for a problem, it was a scam looking for a mark.

pessimizer 4y ago

> The only use-case for it now is for the criminal underworld At least that added validity to the currency; but over time it's become increasingly less useful for any of the criminal underground other than middleweight tax dodgers, embezzlers, and people trying to beat embargoes or currency controls. My suspicion is that these generally elite crimes (by volume, not by incident count) are tolerable to elite decisionmakers, and the network enables covert transfer of funds to "freedom fighter" groups, informants, and politicians - so the US covert community can hide their activities within the swarm. They surely have the tools and funds to track and unmask everything going on in the network in real time, and if they see something they're truly bothered by, they can use a parallel construction to go after it. Bitcoin becomes Tor. edit: Back in the day you had to fill a plane with cash and fly it to the Contras. Hell, you had to fill a plane with drugs, fly the drugs to where you could sell them for cash, then fly the cash back. The CIA were very early victims of the cashless society.

suslik 4y ago

I know at least two use cases where crypto really shines: 1) fast international transfers, including to countries not fully connected to an international bank system, 2) receiving and sending secure donations that are not susceptible to credit card leaks and censorship and avoid the PayPal / Patreon tax, which is substantial. I use it for both, and it is great.

IndoorPatio 4y ago

1. Plenty of people have never been "enthused" and were always skeptical. 2. There was nothing sophisticated about crypto Ponzi schemes. It was always trivially obvious that if X money is used to purchase or prop-up crypto then X is all that is ever coming back out.

dragonwriter 4y ago

> We all started off enthused about cryptocurrency and then the Wolf of Wall Street types co-opted it and ruined it for everyone pulling off the most sophisticated Ponzi schemes in history. I mean, plenty of people were pointing out that trying to rewind finance to the era of privately-issued money without controls would lead to a recurrence of all the problems that that has historically produced and is the reason why that’s no longer a norm, while the entusiasts were just chanting “zero-trust” and “outside of government control”. We weren’t all enthused, or surprised with “the Wolf of Wall Street types”. (And I doubt very much the pioneers in the field were historically ignorant enough to not know exactly what they were creating.)

drewcoo 4y ago

Well there's been no real porn use for crypto, so the tech had no hope of really catching on like the VCR or the World Wide Web did.