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It's an interesting question: What does that mean? Maybe it's better to look at cryptocurrencies as financial securities, shares in an asset controlled by a pr

It's an interesting question: What does that mean? Maybe it's better to look at cryptocurrencies as financial securities, shares in an asset controlled by a private company (as has been said many times before). Could General Electric 'disable' the shares of a shareholder? What would that mean? The shareholder can't sell their shares, I suppose, but GE's equity would remain the same (not counting any market movement that would be caused by the sale). Imagine a monetary system where currency was profit to a private company. What will our once-proud industry think of next? Software to help landlords collude, take housing off the market, and jack up rents? Software that impersonates humans, as well as any form of truth? We are on a roll!

smeej 3y ago
The SEC is arguing that most cryptocurrencies, especially the ones that enable this level of control, are securities.
nostrademons 3y ago
Companies absolutely can "disable" trading by certain shareholders. This is what an IPO lock-up is, where insiders cannot sell their shares until 6-12 months after the conclusion of the IPO. It's also what a trading blackout is, where employees cannot trade shares between the end of the quarter and release of earnings. These are very common - almost everyone who works for a public company has encountered them. These cases are temporary, but I suspect there are also permanent trading bans that might be caused by legal action - if, for example, an employee is found guilty of a crime, or is under a wage garnishment order. Also, crypto has long had the phenomena of coins that get "locked" and can never be touched or transferred again, simply through holders that have died or lost the private key. For example, the original "Satoshi coins" - the roughly 1M Bitcoin (~$45B at today's prices, enough to make their holder the 27th richest person in the world) mined by Satoshi before Bitcoin became mainstream - have never been spent, and it's likely that their owner is dead. They simply drop out of circulation, and the price of all other Bitcoin rises to compensate.
- wolverine876 3y ago
  Good points about trading that's disabled. I just wonder what is the same and different about cryptocurrencies like Tether's. > They simply drop out of circulation, and the price of all other Bitcoin rises to compensate. Would that be different for Tether? Isn't Tether a 'private' blockchain that the company controls?
  - nostrademons 3y ago
    The difference with Tether is that its value is ostensibly pegged to the dollar, with each Tether being backed 1:1 with real dollar reserves. So its price doesn't float with supply & demand. Instead, for each Tether that is "locked", it's one less person who has a claim on Tether Ltd's bank reserves. It's debatable whether Tethers are actually backed by dollars 1:1; people have long suspected that Tether Ltd mints them out of thin air based simply on promises (i.e. fraud). And occasionally the price has dropped below $1 as suspicions grow and folks try to exit Tether. So it's good for the company to have Tether holder accounts locked, as it means they have fewer liabilities and less chance of a bank run.
engineer_22 3y ago
-> Software to help landlords collude, take housing off the market, and jack up rents? You're being facetious right? A suit last month alleges just that . https://arstechnica.com/tech-policy/2023/11/14-big-landlords-used-software-to-collude-on-rent-prices-dc-lawsuit-says/ https://arstechnica.com/tech-policy/2023/11/14-big-landlords...
- wolverine876 3y ago
  Yes, that's what I was referring to.
Jerrrry 3y ago
It's actually more equivalent to a stock reverse-split than locked up shares. When coins are lost, they stop circulating; that amount - of active, unique coins - is the M1 value, or the amount of circulating currency. Just like if you burn a key, or mint or destroy a trillion dollar coin thats in the Reserve, or disable shares, the value is derived from the scarcity of the resource. Technically the "uncirculated" money has value, but only as "capital", as it's generally a liquid asset or borrowed against collateral. Uncirculated currency and coins are generally just a very flat asset, just eroding by inflation.

smeej 3y ago

The SEC is arguing that most cryptocurrencies, especially the ones that enable this level of control, are securities.

nostrademons 3y ago

Companies absolutely can "disable" trading by certain shareholders. This is what an IPO lock-up is, where insiders cannot sell their shares until 6-12 months after the conclusion of the IPO. It's also what a trading blackout is, where employees cannot trade shares between the end of the quarter and release of earnings. These are very common - almost everyone who works for a public company has encountered them. These cases are temporary, but I suspect there are also permanent trading bans that might be caused by legal action - if, for example, an employee is found guilty of a crime, or is under a wage garnishment order. Also, crypto has long had the phenomena of coins that get "locked" and can never be touched or transferred again, simply through holders that have died or lost the private key. For example, the original "Satoshi coins" - the roughly 1M Bitcoin (~$45B at today's prices, enough to make their holder the 27th richest person in the world) mined by Satoshi before Bitcoin became mainstream - have never been spent, and it's likely that their owner is dead. They simply drop out of circulation, and the price of all other Bitcoin rises to compensate.

wolverine876 3y ago
Good points about trading that's disabled. I just wonder what is the same and different about cryptocurrencies like Tether's. > They simply drop out of circulation, and the price of all other Bitcoin rises to compensate. Would that be different for Tether? Isn't Tether a 'private' blockchain that the company controls?
- nostrademons 3y ago
  The difference with Tether is that its value is ostensibly pegged to the dollar, with each Tether being backed 1:1 with real dollar reserves. So its price doesn't float with supply & demand. Instead, for each Tether that is "locked", it's one less person who has a claim on Tether Ltd's bank reserves. It's debatable whether Tethers are actually backed by dollars 1:1; people have long suspected that Tether Ltd mints them out of thin air based simply on promises (i.e. fraud). And occasionally the price has dropped below $1 as suspicions grow and folks try to exit Tether. So it's good for the company to have Tether holder accounts locked, as it means they have fewer liabilities and less chance of a bank run.

engineer_22 3y ago

-> Software to help landlords collude, take housing off the market, and jack up rents? You're being facetious right? A suit last month alleges just that . https://arstechnica.com/tech-policy/2023/11/14-big-landlords-used-software-to-collude-on-rent-prices-dc-lawsuit-says/ https://arstechnica.com/tech-policy/2023/11/14-big-landlords...

wolverine876 3y ago
Yes, that's what I was referring to.

Jerrrry 3y ago

It's actually more equivalent to a stock reverse-split than locked up shares. When coins are lost, they stop circulating; that amount - of active, unique coins - is the M1 value, or the amount of circulating currency. Just like if you burn a key, or mint or destroy a trillion dollar coin thats in the Reserve, or disable shares, the value is derived from the scarcity of the resource. Technically the "uncirculated" money has value, but only as "capital", as it's generally a liquid asset or borrowed against collateral. Uncirculated currency and coins are generally just a very flat asset, just eroding by inflation.