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It’s not going to just vanish because crypto has become the tool of choice for online scams and crime. Here’s just one recent example, a small Kansas bank that

by pavlov 3y ago

It’s not going to just vanish because crypto has become the tool of choice for online scams and crime. Here’s just one recent example, a small Kansas bank that collapsed entirely because its CEO got involved in a crypto scam: “The chief executive officer of Heartland Tri-State Bank asked if the client would lend him $12 million so he could get his money out of a cryptocurrency investment. He promised he’d pay him back 10 days later, offering $1 million in interest to make it worth his while.” https://www.bloomberg.com/news/articles/2023-09-27/crypto-scam-led-to-demise-of-heartland-tri-state-bank https://www.bloomberg.com/news/articles/2023-09-27/crypto-sc... Billions are being stolen annually using crypto. It’s the only use case with any traction. For the same reason, governments are increasingly cracking down on crypto. The conditions that created the 2011-2021 crypto booms were a combination of lack of regulation and zero interest rates, which made investors look for increasingly speculative investments. Those days aren’t coming back.

eftychis 3y ago
History of economics disagrees with the last -- hopeful I will assume -- statement. The world was and is full of scammers and fraudsters. Also respectfully I am not sure I get the zero interest rates arguments. There seems to be a subgroup of HN community that believes low interest rates (below some arbitrary threshold?) to be immoral. Maybe there is a Crime, scams and ponzi schemes correlation study over hundreds of years I am unaware of? Japan is keeping negative rates and they are not known for that, to give the country everyone knows counterexample. Besides that the main borrowers are countries themselves. And with US, Europe and China paths right now, amidst a global war tension, something will have to give long term to make ends meet. Usually it is currency devaluation and a fundamental systemic change.
- ethanbond 3y ago
  The zero interest rate comment has nothing to do with morality, it means that people were doing incredibly goofy, risky shit to get a return, which creates ripe ground for conmen and fraud.
  - astrange 3y ago
    ZIRP is somewhat overrated; the first dotcom bubble didn't have zero interest rates. But housing costs weren't as bad then as now, so maybe more room to mess up.
- pavlov 3y ago
  Zero interest rates will most likely return one day, but crypto will be heavily regulated by then. That’s what I meant — the combo isn’t coming back where crypto is an unregulated sink for ZIRP speculation money.
  - eftychis 3y ago
    Thank you for the clarification follow-up.
- thrawa8387336 3y ago
  Lookie the thing is as long as interest rates are down, wages might go up nominally but in actual material terms you end up poorer. Unless you already own substantial hard assets or have access to the low interest rate loans. At the end of the day what matters is how many barrels of oil/kWh your monthly income can directly or indirectly be exchanged for.
- olalonde 3y ago
  > There seems to be a subgroup of HN community that believes low interest rates (below some arbitrary threshold?) to be immoral. Ironically, this is a very popular belief in the Bitcoin community and often cited as the reason to adopt Bitcoin. I don't want to start a debate but essentially, the crux of the belief is that low interest rates are essentially a means of "printing money", which in turn dilutes the value of the currency and acts as a hidden tax on its holders. The idea being that Bitcoin having a fixed supply, isn't vulnerable to such debasement.
olalonde 3y ago
Drug dealers love U.S. bank notes, pedophiles hide behind Tor, tax evaders hide behind Delaware LLCs, scammers use prepaid SIM cards, bigots find a voice on 4Chan, and insurgents communicate through E2E encrypted messengers. The unfortunate reality is, any tool or platform offering a high degree of privacy will inevitably draw those with nefarious intentions.
tkz1312 3y ago
Stablecoins came close to moving as much value as visa in 2022 [1]. The use case for crypto has always been clear. There is a lot of demand for digital cash, some from people who operate outside of the law, but also from people who lack access to good banking and payments infrastructure (think activists, sex workers, citizens of nations with unreliable monetary systems). Now that the speculative mania finally seems to have died down, what remains is what actually provides real value: a robust, modern and reliable financial infrastructure that provides privacy and does not make arbitrary decisions about who has access. 1: https://cryptopotato.com/stablecoins-settled-as-much-value-as-visa-in-2022-analysis/ https://cryptopotato.com/stablecoins-settled-as-much-value-a...
- kkielhofner 3y ago
  Visa has at least 343 million cardholders worldwide. Of course trying to determine crypto "users" is essentially impossible but even the most bloated and inflated estimates (users unique per chain, address = user) put the number somewhere around 300 million. Personally I think it's more like 50-100 million by the time you factor in users on different chains, different wallets, etc. I've spent a lot of time analyzing chains to come to that number, it's not difficult. Nearly every crypto user participates on more than one chain and often uses at least two addresses (hot and cold wallet, for example). Sure enough, the quote is right there in the report: "over 25 million blockchain addresses held over $1 in stablecoins" 25 million addresses, which absolutely don't equal users. Even if they did, that's .05% of global internet users (5.2 billion). With the threshold for inclusion at $1... Of course you say "moving as much value" which doesn't necessarily correlate directly to users or their activity but I would venture to guess (if the report is accurate at all) that a substantial portion of that stablecoin "value" volume isn't anything resembling the economic activity of Visa where every swipe is in exchange for a good or service. At best settlement between exchanges but also wash trading and all kinds of weird hijinx that are basically just swapping tokens around with no other meaningful economic activity. Just look at chain analysis breakdowns on the latest crypto heist and watch them tumble it through stablecoins at least once (often many more). I guess that's "value" but I certainly wouldn't be touting it. The crypto narrative of helping the unbanked is essentially PR damage control spin to try to counter all of the obvious evils that crypto is directly involved in and often responsible for. This volume (if even accurate) has nothing to do with helping regular people, the oppressed, the unbanked, whatever.

by pavlov 3y ago

eftychis 3y ago

History of economics disagrees with the last -- hopeful I will assume -- statement. The world was and is full of scammers and fraudsters. Also respectfully I am not sure I get the zero interest rates arguments. There seems to be a subgroup of HN community that believes low interest rates (below some arbitrary threshold?) to be immoral. Maybe there is a Crime, scams and ponzi schemes correlation study over hundreds of years I am unaware of? Japan is keeping negative rates and they are not known for that, to give the country everyone knows counterexample. Besides that the main borrowers are countries themselves. And with US, Europe and China paths right now, amidst a global war tension, something will have to give long term to make ends meet. Usually it is currency devaluation and a fundamental systemic change.

ethanbond 3y ago
The zero interest rate comment has nothing to do with morality, it means that people were doing incredibly goofy, risky shit to get a return, which creates ripe ground for conmen and fraud.
- astrange 3y ago
  ZIRP is somewhat overrated; the first dotcom bubble didn't have zero interest rates. But housing costs weren't as bad then as now, so maybe more room to mess up.
pavlov 3y ago
Zero interest rates will most likely return one day, but crypto will be heavily regulated by then. That’s what I meant — the combo isn’t coming back where crypto is an unregulated sink for ZIRP speculation money.
- eftychis 3y ago
  Thank you for the clarification follow-up.
thrawa8387336 3y ago
Lookie the thing is as long as interest rates are down, wages might go up nominally but in actual material terms you end up poorer. Unless you already own substantial hard assets or have access to the low interest rate loans. At the end of the day what matters is how many barrels of oil/kWh your monthly income can directly or indirectly be exchanged for.
olalonde 3y ago
> There seems to be a subgroup of HN community that believes low interest rates (below some arbitrary threshold?) to be immoral. Ironically, this is a very popular belief in the Bitcoin community and often cited as the reason to adopt Bitcoin. I don't want to start a debate but essentially, the crux of the belief is that low interest rates are essentially a means of "printing money", which in turn dilutes the value of the currency and acts as a hidden tax on its holders. The idea being that Bitcoin having a fixed supply, isn't vulnerable to such debasement.

olalonde 3y ago

Drug dealers love U.S. bank notes, pedophiles hide behind Tor, tax evaders hide behind Delaware LLCs, scammers use prepaid SIM cards, bigots find a voice on 4Chan, and insurgents communicate through E2E encrypted messengers. The unfortunate reality is, any tool or platform offering a high degree of privacy will inevitably draw those with nefarious intentions.

tkz1312 3y ago

Stablecoins came close to moving as much value as visa in 2022 [1]. The use case for crypto has always been clear. There is a lot of demand for digital cash, some from people who operate outside of the law, but also from people who lack access to good banking and payments infrastructure (think activists, sex workers, citizens of nations with unreliable monetary systems). Now that the speculative mania finally seems to have died down, what remains is what actually provides real value: a robust, modern and reliable financial infrastructure that provides privacy and does not make arbitrary decisions about who has access. 1: https://cryptopotato.com/stablecoins-settled-as-much-value-as-visa-in-2022-analysis/ https://cryptopotato.com/stablecoins-settled-as-much-value-a...

kkielhofner 3y ago
Visa has at least 343 million cardholders worldwide. Of course trying to determine crypto "users" is essentially impossible but even the most bloated and inflated estimates (users unique per chain, address = user) put the number somewhere around 300 million. Personally I think it's more like 50-100 million by the time you factor in users on different chains, different wallets, etc. I've spent a lot of time analyzing chains to come to that number, it's not difficult. Nearly every crypto user participates on more than one chain and often uses at least two addresses (hot and cold wallet, for example). Sure enough, the quote is right there in the report: "over 25 million blockchain addresses held over $1 in stablecoins" 25 million addresses, which absolutely don't equal users. Even if they did, that's .05% of global internet users (5.2 billion). With the threshold for inclusion at $1... Of course you say "moving as much value" which doesn't necessarily correlate directly to users or their activity but I would venture to guess (if the report is accurate at all) that a substantial portion of that stablecoin "value" volume isn't anything resembling the economic activity of Visa where every swipe is in exchange for a good or service. At best settlement between exchanges but also wash trading and all kinds of weird hijinx that are basically just swapping tokens around with no other meaningful economic activity. Just look at chain analysis breakdowns on the latest crypto heist and watch them tumble it through stablecoins at least once (often many more). I guess that's "value" but I certainly wouldn't be touting it. The crypto narrative of helping the unbanked is essentially PR damage control spin to try to counter all of the obvious evils that crypto is directly involved in and often responsible for. This volume (if even accurate) has nothing to do with helping regular people, the oppressed, the unbanked, whatever.