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> As long as it's still helping people, we should keep building it. What if it's hurting more people than it's helping? Just seems like a handwavy way to igno

> As long as it's still helping people, we should keep building it. What if it's hurting more people than it's helping? Just seems like a handwavy way to ignore the scams, fraud and collateral damage. We're talking billions. If we want to spend capital to help people in other countries, there are better ways of doing so. I do not believe for one second that the people from rich countries spending money in this space are doing it to help poor people in other countries. It's great spin though.

EscapeFromNY 3y ago
If it's hurting more than it's helping, then we should probably get rid of it. But you'd need to bring some data proving as much. The attention grabbing headlines that linger in your memory are a biased sub-sample. For bitcoin specifically, a notable crypto skeptic Igor Makarov determined[1]: > illegal transactions, scams and gambling together make up less than 3% of volume To me, 3% is an acceptable level. It's a lower percentage than the black market in many countries even. The reasons people contribute to crypto projects are as diverse as the reasons people contribute to open source in general. Some people want to get rich overnight, others contribute as part of their day job so they can go home at 5pm, and others are genuinely altruistic, though you may not believe it. It's reductive to paint everyone with the same broad brush. [1]: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3942181 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3942181
- greatwave1 3y ago
  > illegal transactions, scams and gambling together make up less than 3% of volume > To me, 3% is an acceptable level. It's a lower percentage than the black market in many countries even. Yeah, but that's because the vast majority of volume comes from speculation and wash trading lmao. What do you think the ratio of speculation and illegal activity to legitimate use cases is? I'd be willing to be it's greater than 10:1, maybe even 100:1
  - EscapeFromNY 3y ago
    You don't have to bet, the data is in the paper I linked. 75% of bitcoin volume is speculation. Meanwhile in the traditional economy, 95% of global financial activity is speculation (see below). What level of speculation would you say is high enough to justify throwing away the remaining productive uses of an asset class? --- In 2019, forex volume was $6.6T per day[1], or $1716T per year. In 2019, global GDP was $87.3T[2]. That's less than 5% economically meaningful activity. [1]: 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... [2]: https://www.statista.com/statistics/268750/global-gross-domestic-product-gdp/ https://www.statista.com/statistics/268750/global-gross-dome...
    - lordfrito 3y ago
      I should not have said speculation, the article makes it clear that 70% plus of unregulated exchange trades are wash trades. Speculation (short selling etc) is a necessary part of a healthy financial system. Wash trades on the other hand are simply market manipulation. GDP / production is what it's all about. The dollar is powerful in part because of US GDP. The financial sector exists to help put capital to work and extract more P (and to do so more efficiently). The financial sector cannot exist on it's own without meaningful production of value underneath it. The crypto exchanges are different from forex in that forex facilitates people from other countries doing business with each other helping convert the value of one country's productive output into the value of the other countries productive output. Exchange rates rise and fall relative to GDP from the two countries. I don't think comparing crypto exchange trading to forex makes sense, as that the crypto currencies don't have a meaningful connection to any nations GDP. I think the point I'm trying to address here is that there is no P with cryptocurrencies. So the "crypto financial sector" seems more about price manipulation and gambling than it is helping facilitate trade between two economies.
      - EscapeFromNY 3y ago
        Each of my links has examples of people exchanging goods and services in bitcoin for various reasons. Do you consider that productive economic activity (the "P")? If you don't: why is it productive when I buy a car using dollars, but not productive when I buy a car using bitcoin? If you do: why must a currency's worth be tied to one particular country's GDP? Why can't it instead be tied to the global production of everyone on earth, in any country, who has chosen to use that currency? I think it's actually a sign of strength when someone goes out of their way to adopt a global non-politcal currency, instead of succumbing to inertia and using the currency that was foisted on them by the geographical circumstances of their birth.
- lordfrito 3y ago
  > The attention grabbing headlines that linger in your memory are a biased sub-sample. Agreed, repeated media narratives lead to bias (myself included) which stands in the way of reasoned argument. Data is good. > illegal transactions, scams and gambling together make up less than 3% of volume I've read that over 70% of trade on the unregulated exchanges are wash trades / fake volume. [1] Huge huge red flag to me, may not be technically illegal, but evidence like this runs counter to the "helping the poor and unbanked" narrative. Market manipulation usually hurts more people than it helps. > It's reductive to paint everyone with the same broad brush. Fair enough. I still say there's a lot of smoke here, and a few clear major wildfires. Today's takeaway for me is that there are a lot more of people here that are heavily invested in crypto space than I guessed. People with money invested that need to see the space succeed. Makes it hard if not impossible to have a reasoned discussion here. It's probably fruitless to continue to talk about crypto here. [1] https://cepr.org/voxeu/columns/wash-trading-centralised-crypto-exchanges-need-transparency-and-accountability https://cepr.org/voxeu/columns/wash-trading-centralised-cryp...
lesuorac 3y ago
Keep in mind, ransomware predates cryptocurrencies they just used the existing financial system ...
omniglottal 3y ago
You're talking about billions of... dollars. Sounds to me like more scams exist because of fiat. Are you implying that scams don't exist with dollars, and it's the crypto alone which makes for fraud? Or is it that, if it's abused for corrupption and fraud, then it's hurting people so we should do away with it, like fiat?
- lordfrito 3y ago
  Of course scams exist with dollars. Scams exist wherever people hold things of value that others want. People want the USD. I'd argue that crypto is mainly a dollar/fiat scam, as getting their hands on fiat seems to be the point of it. "I'll trade you magic beans for those USD" isn't about the beans, its about the USD. People are free to trade BTC on the blockchain no matter what the US government says. It's anonymously cashing out to dollars that seems to be their main goal, and the source of all the ecosystem's trouble and reputation problems. It seem clear to me that almost all of the utility in the crypto space revolves around fraud and criminal behavior. There is little intrinsic "value" in a crypto token, it seems to be nothing more than an unit of account for a large extra-governmental online casino. It empowers and amplifies criminals who do more collective damage than the few "unbanked" that are helped. And so my argument is that because of the above, crypto is not The Future of Finance by a long shot. And my original point was that there are a surprising number of people here that still believe it is in spite of the evidence.
  - RestlessMind 3y ago
    > It seem clear to me that almost all of the utility in the crypto space revolves around fraud and criminal behavior. You are along the right path. Now take it one step further - what if "fraud and criminal behavior" is against despotic regimes like Taliban or Putin or dictators around the world? See my examples here: https://news.ycombinator.com/item?id=32406095 https://news.ycombinator.com/item?id=32406095

EscapeFromNY 3y ago

If it's hurting more than it's helping, then we should probably get rid of it. But you'd need to bring some data proving as much. The attention grabbing headlines that linger in your memory are a biased sub-sample. For bitcoin specifically, a notable crypto skeptic Igor Makarov determined[1]: > illegal transactions, scams and gambling together make up less than 3% of volume To me, 3% is an acceptable level. It's a lower percentage than the black market in many countries even. The reasons people contribute to crypto projects are as diverse as the reasons people contribute to open source in general. Some people want to get rich overnight, others contribute as part of their day job so they can go home at 5pm, and others are genuinely altruistic, though you may not believe it. It's reductive to paint everyone with the same broad brush. [1]: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3942181 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3942181

greatwave1 3y ago
> illegal transactions, scams and gambling together make up less than 3% of volume > To me, 3% is an acceptable level. It's a lower percentage than the black market in many countries even. Yeah, but that's because the vast majority of volume comes from speculation and wash trading lmao. What do you think the ratio of speculation and illegal activity to legitimate use cases is? I'd be willing to be it's greater than 10:1, maybe even 100:1
- EscapeFromNY 3y ago
  You don't have to bet, the data is in the paper I linked. 75% of bitcoin volume is speculation. Meanwhile in the traditional economy, 95% of global financial activity is speculation (see below). What level of speculation would you say is high enough to justify throwing away the remaining productive uses of an asset class? --- In 2019, forex volume was $6.6T per day[1], or $1716T per year. In 2019, global GDP was $87.3T[2]. That's less than 5% economically meaningful activity. [1]: 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... [2]: https://www.statista.com/statistics/268750/global-gross-domestic-product-gdp/ https://www.statista.com/statistics/268750/global-gross-dome...
  - lordfrito 3y ago
    I should not have said speculation, the article makes it clear that 70% plus of unregulated exchange trades are wash trades. Speculation (short selling etc) is a necessary part of a healthy financial system. Wash trades on the other hand are simply market manipulation. GDP / production is what it's all about. The dollar is powerful in part because of US GDP. The financial sector exists to help put capital to work and extract more P (and to do so more efficiently). The financial sector cannot exist on it's own without meaningful production of value underneath it. The crypto exchanges are different from forex in that forex facilitates people from other countries doing business with each other helping convert the value of one country's productive output into the value of the other countries productive output. Exchange rates rise and fall relative to GDP from the two countries. I don't think comparing crypto exchange trading to forex makes sense, as that the crypto currencies don't have a meaningful connection to any nations GDP. I think the point I'm trying to address here is that there is no P with cryptocurrencies. So the "crypto financial sector" seems more about price manipulation and gambling than it is helping facilitate trade between two economies.
    - EscapeFromNY 3y ago
      Each of my links has examples of people exchanging goods and services in bitcoin for various reasons. Do you consider that productive economic activity (the "P")? If you don't: why is it productive when I buy a car using dollars, but not productive when I buy a car using bitcoin? If you do: why must a currency's worth be tied to one particular country's GDP? Why can't it instead be tied to the global production of everyone on earth, in any country, who has chosen to use that currency? I think it's actually a sign of strength when someone goes out of their way to adopt a global non-politcal currency, instead of succumbing to inertia and using the currency that was foisted on them by the geographical circumstances of their birth.
lordfrito 3y ago
> The attention grabbing headlines that linger in your memory are a biased sub-sample. Agreed, repeated media narratives lead to bias (myself included) which stands in the way of reasoned argument. Data is good. > illegal transactions, scams and gambling together make up less than 3% of volume I've read that over 70% of trade on the unregulated exchanges are wash trades / fake volume. [1] Huge huge red flag to me, may not be technically illegal, but evidence like this runs counter to the "helping the poor and unbanked" narrative. Market manipulation usually hurts more people than it helps. > It's reductive to paint everyone with the same broad brush. Fair enough. I still say there's a lot of smoke here, and a few clear major wildfires. Today's takeaway for me is that there are a lot more of people here that are heavily invested in crypto space than I guessed. People with money invested that need to see the space succeed. Makes it hard if not impossible to have a reasoned discussion here. It's probably fruitless to continue to talk about crypto here. [1] https://cepr.org/voxeu/columns/wash-trading-centralised-crypto-exchanges-need-transparency-and-accountability https://cepr.org/voxeu/columns/wash-trading-centralised-cryp...

lesuorac 3y ago

Keep in mind, ransomware predates cryptocurrencies they just used the existing financial system ...

omniglottal 3y ago

You're talking about billions of... dollars. Sounds to me like more scams exist because of fiat. Are you implying that scams don't exist with dollars, and it's the crypto alone which makes for fraud? Or is it that, if it's abused for corrupption and fraud, then it's hurting people so we should do away with it, like fiat?

lordfrito 3y ago
Of course scams exist with dollars. Scams exist wherever people hold things of value that others want. People want the USD. I'd argue that crypto is mainly a dollar/fiat scam, as getting their hands on fiat seems to be the point of it. "I'll trade you magic beans for those USD" isn't about the beans, its about the USD. People are free to trade BTC on the blockchain no matter what the US government says. It's anonymously cashing out to dollars that seems to be their main goal, and the source of all the ecosystem's trouble and reputation problems. It seem clear to me that almost all of the utility in the crypto space revolves around fraud and criminal behavior. There is little intrinsic "value" in a crypto token, it seems to be nothing more than an unit of account for a large extra-governmental online casino. It empowers and amplifies criminals who do more collective damage than the few "unbanked" that are helped. And so my argument is that because of the above, crypto is not The Future of Finance by a long shot. And my original point was that there are a surprising number of people here that still believe it is in spite of the evidence.
- RestlessMind 3y ago
  > It seem clear to me that almost all of the utility in the crypto space revolves around fraud and criminal behavior. You are along the right path. Now take it one step further - what if "fraud and criminal behavior" is against despotic regimes like Taliban or Putin or dictators around the world? See my examples here: https://news.ycombinator.com/item?id=32406095 https://news.ycombinator.com/item?id=32406095