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Why do so many of the comments here and journalists assert that crypto and exchanges are the same thing? Doesn't keeping coin in an exchange (as opposed to in

Why do so many of the comments here and journalists assert that crypto and exchanges are the same thing? Doesn't keeping coin in an exchange (as opposed to in a wallet, locally) sort of violate the ideology of crypto? Wasn't this shit invented to circumvent the banks? I don't get it, using something meant to circumvent the banks, just to invest it in a less regulated form of a bank Isn't to say I have a problem with crypto, but the one camp of people who shill these exchanges and the other that is saying crypto = exchanges = ponzi scheme are both wrong

Nursie 3y ago
Without the exchanges, buying and selling for 'real' currency would be next to impossible. Without access to 'real' money, the get rich quick crowd (and probably a lot of the scam crowd, and probably a lot of the dark market crowd) move on. With them gone... there's probably not very much left of a cryptocurrency user base.
- testacct22 3y ago
  Seems like there's two ways of looking at exchanges: using it to buy/sell, then immediately transferring to a personal wallet. Or using it as some kind of investment. I'm criticizing the latter Wrt to the get rich quick crowd, things were fine before they showed up. They should go somewhere
  - somenameforme 3y ago
    10 years ago I used to hold the concept of 'accredited investor' in disdain. It's largely just creating a giant paywall (or at least wealthwall) preventing lower income individuals from accessing some of the most potentially lucrative ventures. But yeah, the past ten years of seeing people decide to go buy BTC on news of "BTC reaches record high! It's going to to the Moon!" and then decide to go sell it on news of "BTC is crashing! This is the end!", and then [loudly] complain about losing money, or even that it's all a scam, has really made me change my mind and, in part, my worldview.
  - Nursie 3y ago
    > I'm criticizing the latter I think if you remove the latter there won't be many people left playing with cryptocurrency. Which would be fine from my perspective (a lot fewer people being ripped off in what appears to basically be a huge unregulated casino). And it sounds like from yours too.
fisherjeff 3y ago
I think the thing is that a ton of people are using crypto as speculative investments and an exchange facilitates that, especially once it layers leverage and derivatives on top.
lolinder 3y ago
I can't find the original source, but a while ago I read a really compelling article (linked from here) which explained why centralization is inevitable. I think it's relevant here, because if centralization is inevitable then it's reasonable to treat crypto as interchangeable with the exchanges. Essentially, the thesis was that a decentralized protocol can never evolve and adapt as quickly as a centralized platform, because the protocol has to reach consensus with all stakeholders before it can change. This leaves a gap between user expectations and the protocol's capabilities, which platforms are happy to fill. They extend the protocol with bespoke and proprietary features, these features draw users, and users come to depend on these extensions. Thus, lock in. You can see this with email and Gmail, with the web and Facebook et al. NFTs had OpenSea, and crypto in general has the exchanges. You can't separate crypto from the exchanges because the existence of crypto necessarily implies exchanges.
- Xunxi 3y ago
  https://moxie.org/2022/01/07/web3-first-impressions.html https://moxie.org/2022/01/07/web3-first-impressions.html
  - lolinder 3y ago
    Yes! That's the one!
  - testacct22 3y ago
    > This might suggest that decentralization itself is not actually of immediate practical or pressing importance to the majority of people downstream, that the only amount of decentralization people want is the minimum amount required for something to exist Seems to me like building a centralized system on top of a decentralized one, similar to my earlier example of building a bank on top of something designed to circumvent the bank General rule seems to be greed v laziness -> centralization
- testacct22 3y ago
  What about BitTorrent?
downWidOutaFite 3y ago
It's because bitcoin's p2p user interface is awful or nonexistant.
- somenameforme 3y ago
  The Bitcoin p2p interface is quite excellent. Literally all you need to do is download a wallet, the overwhelming majority of which are open source, and then generate an ID which is also done with the press of a button. And that's it. Give that ID to somebody and they can send money to you which will momentarily show up in your account. Vice versa, for sending to somebody else. In a world where people were using nothing but some sort of a peer-to-peer currency this system would be unbelievably amazing. The reason exchanges exist is because fiat currencies still exist, and so there's a lot of demand for exchanging between peer-to-peer currencies and fiat currencies.
dragonwriter 3y ago
> Why do so many of the comments here and journalists assert that crypto and exchanges are the same thing? Exchanges are what make crpyto usable, to the extent it is. > Doesn’t keeping coin in an exchange (as opposed to in a wallet, locally) sort of violate the ideology of crypto? Maybe, so what? “Exchanges as a venue for, um, exchange” and “keeping coin in an exchange” aren’t the same thing (except to the extent that exchanges make it difficult to move coin off the exchange, which AFAIK usually isn’t an issue for crypto so much as it is sometimes is for fiat.) > Wasn’t this shit invented to circumvent the banks? That’s been part of the marketing, sure, and not just banks but the financial services industry more generally. But, as it turns out, you need a lot of those services for anything money-like to be usable, especially when its not the primary currency of the economy you are trying to operate in. A lot of the marketing of cryptocurrency is…not particularly realistic. (Of course, a lot of it is done by the people running the crypto-community versions of financial services, so…)
timcavel 3y ago
[dead]

Nursie 3y ago

Without the exchanges, buying and selling for 'real' currency would be next to impossible. Without access to 'real' money, the get rich quick crowd (and probably a lot of the scam crowd, and probably a lot of the dark market crowd) move on. With them gone... there's probably not very much left of a cryptocurrency user base.

testacct22 3y ago
Seems like there's two ways of looking at exchanges: using it to buy/sell, then immediately transferring to a personal wallet. Or using it as some kind of investment. I'm criticizing the latter Wrt to the get rich quick crowd, things were fine before they showed up. They should go somewhere
- somenameforme 3y ago
  10 years ago I used to hold the concept of 'accredited investor' in disdain. It's largely just creating a giant paywall (or at least wealthwall) preventing lower income individuals from accessing some of the most potentially lucrative ventures. But yeah, the past ten years of seeing people decide to go buy BTC on news of "BTC reaches record high! It's going to to the Moon!" and then decide to go sell it on news of "BTC is crashing! This is the end!", and then [loudly] complain about losing money, or even that it's all a scam, has really made me change my mind and, in part, my worldview.
- Nursie 3y ago
  > I'm criticizing the latter I think if you remove the latter there won't be many people left playing with cryptocurrency. Which would be fine from my perspective (a lot fewer people being ripped off in what appears to basically be a huge unregulated casino). And it sounds like from yours too.

fisherjeff 3y ago

I think the thing is that a ton of people are using crypto as speculative investments and an exchange facilitates that, especially once it layers leverage and derivatives on top.

lolinder 3y ago

I can't find the original source, but a while ago I read a really compelling article (linked from here) which explained why centralization is inevitable. I think it's relevant here, because if centralization is inevitable then it's reasonable to treat crypto as interchangeable with the exchanges. Essentially, the thesis was that a decentralized protocol can never evolve and adapt as quickly as a centralized platform, because the protocol has to reach consensus with all stakeholders before it can change. This leaves a gap between user expectations and the protocol's capabilities, which platforms are happy to fill. They extend the protocol with bespoke and proprietary features, these features draw users, and users come to depend on these extensions. Thus, lock in. You can see this with email and Gmail, with the web and Facebook et al. NFTs had OpenSea, and crypto in general has the exchanges. You can't separate crypto from the exchanges because the existence of crypto necessarily implies exchanges.

Xunxi 3y ago
https://moxie.org/2022/01/07/web3-first-impressions.html https://moxie.org/2022/01/07/web3-first-impressions.html
- lolinder 3y ago
  Yes! That's the one!
- testacct22 3y ago
  > This might suggest that decentralization itself is not actually of immediate practical or pressing importance to the majority of people downstream, that the only amount of decentralization people want is the minimum amount required for something to exist Seems to me like building a centralized system on top of a decentralized one, similar to my earlier example of building a bank on top of something designed to circumvent the bank General rule seems to be greed v laziness -> centralization
testacct22 3y ago
What about BitTorrent?

downWidOutaFite 3y ago

It's because bitcoin's p2p user interface is awful or nonexistant.

somenameforme 3y ago
The Bitcoin p2p interface is quite excellent. Literally all you need to do is download a wallet, the overwhelming majority of which are open source, and then generate an ID which is also done with the press of a button. And that's it. Give that ID to somebody and they can send money to you which will momentarily show up in your account. Vice versa, for sending to somebody else. In a world where people were using nothing but some sort of a peer-to-peer currency this system would be unbelievably amazing. The reason exchanges exist is because fiat currencies still exist, and so there's a lot of demand for exchanging between peer-to-peer currencies and fiat currencies.

dragonwriter 3y ago

> Why do so many of the comments here and journalists assert that crypto and exchanges are the same thing? Exchanges are what make crpyto usable, to the extent it is. > Doesn’t keeping coin in an exchange (as opposed to in a wallet, locally) sort of violate the ideology of crypto? Maybe, so what? “Exchanges as a venue for, um, exchange” and “keeping coin in an exchange” aren’t the same thing (except to the extent that exchanges make it difficult to move coin off the exchange, which AFAIK usually isn’t an issue for crypto so much as it is sometimes is for fiat.) > Wasn’t this shit invented to circumvent the banks? That’s been part of the marketing, sure, and not just banks but the financial services industry more generally. But, as it turns out, you need a lot of those services for anything money-like to be usable, especially when its not the primary currency of the economy you are trying to operate in. A lot of the marketing of cryptocurrency is…not particularly realistic. (Of course, a lot of it is done by the people running the crypto-community versions of financial services, so…)

timcavel 3y ago

[dead]