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Watching crypto enthusiasts run into every problem that society already tackled with in the past when developing currency and its controls, and then coming up w

by lovich 1y ago

Watching crypto enthusiasts run into every problem that society already tackled with in the past when developing currency and its controls, and then coming up with solutions that look exactly the same as what dirty fiat currency uses, has been a source of much entertainment the past few years

voidspark 1y ago
This is an exchange problem, not a crypto problem. You don’t need an exchange to hold crypto.
- lovich 1y ago
  Yes, I think I’m familiar with the crypto enthusiasts defenses that all boil down to looking at a single aspect of their system in a vacuum and not realizing that if anyone wants to functionally use crypto as a currency and not as a speculative asset or tool in crime, then all these aspects actually have to work and work together
  - voidspark 1y ago
    I don't really care about crypto personally (volatile shitcoins) but I think that's a straw man argument. They all know it gets troublesome when it comes to dealing with fiat transactions. The hardcore crypto enthusiasts want to avoid fiat entirely.
    - sumeno 1y ago
      If only hardcore crypto enthusiasts who didn't want any fiat had cryptocurrency bitcoin would be worth a couple dollars a piece and 99% of other cryptocurrencies wouldn't exist. The vast vast majority of people who have crypto are doing it because they think they can get rich from it and that's why anytime it's talked about it's talked about in terms of fiat values
      - deleted 1y ago
        [deleted]
- brazzy 1y ago
  You need an exchange to do some core things that people want to use cryptocurrencies for. It may not be a crypto-as-a-theoretically/ideologically-pure-construct problem, but it absolutely is a crypto-as-a-real-world-asset problem.
- TheAmazingRace 1y ago
  But they need exchanges to get real money to flow in and out of cryptocurrency easily. Without it, cryptocurrency by itself would likely be worth far less than it is today.
  - voidspark 1y ago
    Yes that's true, but no need to hold your crypto there as a permanent storage. Once your fiat is exchanged to crypto, immediately transfer the crypto to your private wallet.
    - wmf 1y ago
      This just trades the unsolved exchange hacking problem for the unsolved lost/stolen keys problem.
      - int_19h 1y ago
        That problem is trivially solved by backups.
        wmf 1y ago
        Backups don't solve seed phrase phishing for example.
        deleted 1y ago
        [deleted]
        johnisgood 1y ago
        As opposed to the bank's ...? Or your other account's ..., what exactly, passwords? Phising is everywhere. How many times have you heard the elderly have their money stolen, both online and in real life? It happened to my grandma. The mailman is bringing her own pension as cash, and guess what, he has scammed my grandma for years! The food delivery guy who has been delivering lunch for my grandma, guess what he did? He scammed my grandma out of her money! We are talking about cash, right now, and no phising involved, just good old "lying".
thepasswordis 1y ago
Is there anything crypto does that paper currency doesn’t?
- SilasX 1y ago
  Yes, electronic transfer. Come on, if you’re going to copy someone else’s snark, pick a good one.
- reaperducer 1y ago
  Is there anything crypto does that paper currency doesn’t? Gets you the equivalent of mugged by people on the other side of the planet? At least with cash, it's a one-on-one involuntary transaction.
- codedokode 1y ago
  Paper currency can be devalued by the government by printing lot of paper (this has happened many times in our history). Cryptocurrency cannot.
- AStonesThrow 1y ago
  "Cryptocurrency" is a misnomer, because none of them are actual currencies. Cryptocurrencies are classified, for now, as securities. Currency is currency and cryptocurrency is not. So please do not attempt to compare apples to oranges here. https://en.wikipedia.org/wiki/Security_(finance) https://en.wikipedia.org/wiki/Security_(finance) If you wish to compare cryptosecurities to other securities, then do that, but don't try to act like it is some sort of future utopian currency.
  - arandomusername 1y ago
    Cryptocurrencies are not classified as securities. Bitcoin and Ethereum, the largest cryptocurrencies, were both declared as non securities by the SEC.
codedokode 1y ago
As I understand, the root of the problem is that Coinbase kept lot of sensitive information, including photos of IDs. If Coinbase was fully anonymous, and didn't require any KYC, the impact of the leak would be insignificant because it would be difficult to link user number 12345 with some real-world person. So if we want to constrain impact of such attacks, we must make companies keep less data and delete them faster. For example, instead of storing a photo of ID, store just a checkbox that the person showed their ID and it was valid. This applies not only to cryptocurrency, but to any company like Google, Uber, Amazon etc - if they didn't keep extra data, there would be little value in the leaks. So the blame is not at cryptocurrency, but on companies not wishing to delete the data and governments demanding them to collect the data not necessary for operation. It's the government and capitalists who create problems out of nowhere.
- PinkSheep 1y ago
  > store just a checkbox that the person showed their ID and it was valid. Doesn't work at scale. You get bribes, rogue employees, socially engineered employees. In the US, look up the articles about phone/SIM unlocks and SIM card copies. Russia has a problem with e-signatures, that most people have no idea about. It's possible to sell somebody's real estate with one of these. Loans granted just based on passport data. Neither politics nor media highlight these issues. Overall in this case your suggestion tries to handle the symptoms of the KYC requirement. Here's a more extreme treatment: let people change their full legal name at will. Gender's already kinda possible.
  - codedokode 1y ago
    In Russia one can change their name, although it is a lot of pain as you need to change it in all agreements (like bank agreement) and documents. So a better idea is simply not store customer names.
johnisgood 1y ago
As others have said, it has nothing to do with crypto, it is an exchange problem, and a government intervention problem.
- ClumsyPilot 1y ago
  Spherical cow in a vacuum
PinkSheep 1y ago
> every problem that society already tackled with in the past More KYC creates more problems while solving some others. Why didn't the same society despite KYC/AML tackle the problem pointed at in a previous comment? "Florida teens kidnap Las Vegas man, drive him to Arizona desert, steal $4M in cryptocurrency"[1] Why is there this crime? Without mandatory KYC laws, this particular attack would be near pointless. No name tied to account, bookkeeping doesn't archive wire transaction details for the past 10 years. Let businesses easily accept cryptocurrency (like... regular cash?), without a blade to their throat held by the government, and the need for such centralization points will greatly diminish. People get in trouble by p2p-exchanging money with unknown peers; in some instances this "trouble" has the unit of "years". It's in nobodies' interest to protect cryptocurrency payments as the alternative, other than the activists, and the big groups jumping in on it for the speculation purposes - something they had refined decades ago. There's CBDC is on the horizon. [1]: https://news.ycombinator.com/item?id=43999011 https://news.ycombinator.com/item?id=43999011
- lovich 1y ago
  Yea see the problem is that you are arguing under some implicit idea that you’ll just accept the results of the system. Every single crypto property I’ve talked to has ended up at a point where they believes that someone cheated them outside the bounds of the system and then look to authority figures to rectify the situation, like the government. If you are someone who actually believes that crypto transactions should be unmodifiable by any third party then what you said makes sense. I just don’t think that anyone telling me they believe that isn’t lying to themselves at best, and lying to everyone else at worst
  - PinkSheep 1y ago
    > unmodifiable by any third party then what you said makes sense. You are right, I do. The same reason I don't think the cryptocurrency is for everyone. And the reason I accept this, is because "traditional institutions" still can be "easily" gamed: enough cases of social engineering around to be considered a norm. Where law enforcement won't try enough or can't do enough to return the money transferred to a hostile account. Following this, if someone smart enough to avoid the banking scams, they are probably smart enough to manage their own wallet safely.

by lovich 1y ago

voidspark 1y ago

This is an exchange problem, not a crypto problem. You don’t need an exchange to hold crypto.

lovich 1y ago
Yes, I think I’m familiar with the crypto enthusiasts defenses that all boil down to looking at a single aspect of their system in a vacuum and not realizing that if anyone wants to functionally use crypto as a currency and not as a speculative asset or tool in crime, then all these aspects actually have to work and work together
- voidspark 1y ago
  I don't really care about crypto personally (volatile shitcoins) but I think that's a straw man argument. They all know it gets troublesome when it comes to dealing with fiat transactions. The hardcore crypto enthusiasts want to avoid fiat entirely.
  - sumeno 1y ago
    If only hardcore crypto enthusiasts who didn't want any fiat had cryptocurrency bitcoin would be worth a couple dollars a piece and 99% of other cryptocurrencies wouldn't exist. The vast vast majority of people who have crypto are doing it because they think they can get rich from it and that's why anytime it's talked about it's talked about in terms of fiat values
    - deleted 1y ago
      [deleted]
brazzy 1y ago
You need an exchange to do some core things that people want to use cryptocurrencies for. It may not be a crypto-as-a-theoretically/ideologically-pure-construct problem, but it absolutely is a crypto-as-a-real-world-asset problem.
TheAmazingRace 1y ago
But they need exchanges to get real money to flow in and out of cryptocurrency easily. Without it, cryptocurrency by itself would likely be worth far less than it is today.
- voidspark 1y ago
  Yes that's true, but no need to hold your crypto there as a permanent storage. Once your fiat is exchanged to crypto, immediately transfer the crypto to your private wallet.
  - wmf 1y ago
    This just trades the unsolved exchange hacking problem for the unsolved lost/stolen keys problem.
    - int_19h 1y ago
      That problem is trivially solved by backups.
      - wmf 1y ago
        Backups don't solve seed phrase phishing for example.
        deleted 1y ago
        [deleted]
        johnisgood 1y ago
        As opposed to the bank's ...? Or your other account's ..., what exactly, passwords? Phising is everywhere. How many times have you heard the elderly have their money stolen, both online and in real life? It happened to my grandma. The mailman is bringing her own pension as cash, and guess what, he has scammed my grandma for years! The food delivery guy who has been delivering lunch for my grandma, guess what he did? He scammed my grandma out of her money! We are talking about cash, right now, and no phising involved, just good old "lying".

thepasswordis 1y ago

Is there anything crypto does that paper currency doesn’t?

SilasX 1y ago
Yes, electronic transfer. Come on, if you’re going to copy someone else’s snark, pick a good one.
reaperducer 1y ago
Is there anything crypto does that paper currency doesn’t? Gets you the equivalent of mugged by people on the other side of the planet? At least with cash, it's a one-on-one involuntary transaction.
codedokode 1y ago
Paper currency can be devalued by the government by printing lot of paper (this has happened many times in our history). Cryptocurrency cannot.
AStonesThrow 1y ago
"Cryptocurrency" is a misnomer, because none of them are actual currencies. Cryptocurrencies are classified, for now, as securities. Currency is currency and cryptocurrency is not. So please do not attempt to compare apples to oranges here. https://en.wikipedia.org/wiki/Security_(finance) https://en.wikipedia.org/wiki/Security_(finance) If you wish to compare cryptosecurities to other securities, then do that, but don't try to act like it is some sort of future utopian currency.
- arandomusername 1y ago
  Cryptocurrencies are not classified as securities. Bitcoin and Ethereum, the largest cryptocurrencies, were both declared as non securities by the SEC.

codedokode 1y ago

As I understand, the root of the problem is that Coinbase kept lot of sensitive information, including photos of IDs. If Coinbase was fully anonymous, and didn't require any KYC, the impact of the leak would be insignificant because it would be difficult to link user number 12345 with some real-world person. So if we want to constrain impact of such attacks, we must make companies keep less data and delete them faster. For example, instead of storing a photo of ID, store just a checkbox that the person showed their ID and it was valid. This applies not only to cryptocurrency, but to any company like Google, Uber, Amazon etc - if they didn't keep extra data, there would be little value in the leaks. So the blame is not at cryptocurrency, but on companies not wishing to delete the data and governments demanding them to collect the data not necessary for operation. It's the government and capitalists who create problems out of nowhere.

PinkSheep 1y ago
> store just a checkbox that the person showed their ID and it was valid. Doesn't work at scale. You get bribes, rogue employees, socially engineered employees. In the US, look up the articles about phone/SIM unlocks and SIM card copies. Russia has a problem with e-signatures, that most people have no idea about. It's possible to sell somebody's real estate with one of these. Loans granted just based on passport data. Neither politics nor media highlight these issues. Overall in this case your suggestion tries to handle the symptoms of the KYC requirement. Here's a more extreme treatment: let people change their full legal name at will. Gender's already kinda possible.
- codedokode 1y ago
  In Russia one can change their name, although it is a lot of pain as you need to change it in all agreements (like bank agreement) and documents. So a better idea is simply not store customer names.

johnisgood 1y ago

As others have said, it has nothing to do with crypto, it is an exchange problem, and a government intervention problem.

ClumsyPilot 1y ago
Spherical cow in a vacuum

PinkSheep 1y ago

> every problem that society already tackled with in the past More KYC creates more problems while solving some others. Why didn't the same society despite KYC/AML tackle the problem pointed at in a previous comment? "Florida teens kidnap Las Vegas man, drive him to Arizona desert, steal $4M in cryptocurrency"[1] Why is there this crime? Without mandatory KYC laws, this particular attack would be near pointless. No name tied to account, bookkeeping doesn't archive wire transaction details for the past 10 years. Let businesses easily accept cryptocurrency (like... regular cash?), without a blade to their throat held by the government, and the need for such centralization points will greatly diminish. People get in trouble by p2p-exchanging money with unknown peers; in some instances this "trouble" has the unit of "years". It's in nobodies' interest to protect cryptocurrency payments as the alternative, other than the activists, and the big groups jumping in on it for the speculation purposes - something they had refined decades ago. There's CBDC is on the horizon. [1]: https://news.ycombinator.com/item?id=43999011 https://news.ycombinator.com/item?id=43999011

lovich 1y ago
Yea see the problem is that you are arguing under some implicit idea that you’ll just accept the results of the system. Every single crypto property I’ve talked to has ended up at a point where they believes that someone cheated them outside the bounds of the system and then look to authority figures to rectify the situation, like the government. If you are someone who actually believes that crypto transactions should be unmodifiable by any third party then what you said makes sense. I just don’t think that anyone telling me they believe that isn’t lying to themselves at best, and lying to everyone else at worst
- PinkSheep 1y ago
  > unmodifiable by any third party then what you said makes sense. You are right, I do. The same reason I don't think the cryptocurrency is for everyone. And the reason I accept this, is because "traditional institutions" still can be "easily" gamed: enough cases of social engineering around to be considered a norm. Where law enforcement won't try enough or can't do enough to return the money transferred to a hostile account. Following this, if someone smart enough to avoid the banking scams, they are probably smart enough to manage their own wallet safely.