Meanwhile, no ones talking before how JPMOrgan Chase said crypto was fake, not money, would close accounts of people using it to wire money to Coinbase?
What's your point? JPMC isn't trading bitcoin, they are offering banking services to crypto exchanges. As long as the latter can demonstrate they are operating with appropriate regulations and risk management, it's just like providing banking services to any other company.
The question of "just because JPM are providing services to this exchange, does that guarantee that they won't take action against retail customers wiring money to that exchange" is legitimate.
Whose to say they won't 180 their decision and all known bitcoin accounts and affiliated companies are removed from their banking services, amounts seized, etc
Plus the whole message of centralization vs decentralized of crypto.
But yeah, "appropriate regulations and risk management" for whom, YOU the customer, or THEM the Bank?
JP Morgan is not your friend if you deal in Crypto. The market tide is swinging that they have to play to compete but they are overall 100% hostile.
JP Morgan is not your friend if you deal in Crypto.
Nobody is your friend if you deal in crypto. That's the whole point of crypto.
Or are we going to forget all the times that Coinbase and Bitfinex prevented customers from selling their coins as the value was falling, or when Tether promised an audit of their supposedly 1:1 USD-backed currency and then never did, or that time Mt Gox failed and took down several billion worth of coins with it, or that time Ethereum unilaterally changed the ledger because of the DAO scandal and wiped out $300 million of holdings?
The banks at least are governed by laws and regulated by governments. Many of the exchanges don't even bother to pay lip service to regulation.
Should have started with these points, which are reasonable.
>Whose to say they won't 180 their decision and all known bitcoin accounts and affiliated companies are removed from their banking services, amounts seized, etc
There are likely real risks here, and everyone wanting to go this route would be well advised to tread lightly and carefully to start...especially if they are doing something they aren't going to be willing to stand up in a court of law to defend. There are a bunch of 'know your customer' regulations that apply to banks that require them to do some amount of due diligence on why their customers are moving money. They cannot just say 'it's their money, not my problem'.
> Plus the whole message of centralization vs decentralized of crypto.
That's on the exchanges and the people that use this system.
> But yeah, "appropriate regulations and risk management" for whom, YOU the customer, or THEM the Bank?
Them, 100%, this should be no surprise. There are FDIC controls to protect customer assets up to a certain amount but that's it.
> JP Morgan is not your friend if you deal in Crypto. The market tide is swinging that they have to play to compete but they are overall 100% hostile.
None of these organizations are your friend, even the exchanges. The main conflict with incumbent banks is going to be specifically with bitcoin and other non-fiat currency. That won't go away any time soon. Blockchain and cryptocurrency (fiat-backed) on the other hand are potentially huge cost-saving measures and the banks are likely to adopt those much more quickly. Of course the concern will be that decentralized currencies like bitcoin will be relegated back to novelty class.
They usually do this when they suspect there's money laundering going on, usually due to drug dealing. which, you know, DOES happen on Bitcoin exchanges.
Of course. And it happens on an even larger scale in the legacy fiat banking system [0], but when caught, "offenders" continue conducting business as usual after they pay a small tribute.
So it's okay for a bank to do it, but not a person? It's okay for a bank to take advantage of fraction reserve and lend out and help a criminal org launder money?
Yes, this case they the bank, was caught, but not suddenly.
The percentage of cash that's used for criminal activity is much smaller than the percentage of BTC that is used for such.
I'm including darknet markets, ransomware, and outright exchange thefts in this.
~170 billion USD worth of BTC exists.
~9 billion USD worth of BTC has been stolen from various exchange hacks.
~140 million USD worth of BTC has been stolen through ransomware attacks.
... And as for commercial transactions:
Darknet markets make up ~40% of all non-theft, non-exchange related BTC commerce. [1]
Cash may rule the drug world in absolute numbers, but in relative numbers, the overwhelming majority of cash is used in the real economy. When nearly half the BTC that's used to transact is used for illegal purposes, it's pretty easy to see why banks aren't interested in touching it. Why risk losing your banking license, for collecting fees from such a tiny market segment?
I don't understand this 'past sins' accounting in the thread. It's not 'wolf of main street' for a reason. Sure there are the bean counters in banks, but they also hire people on the ragged edge of sanity in risk management, making giant bets on incomplete information and parlaying those into more bets before the grand settling comes around. It's like those old-school cartoons of someone running across a footbridge just fast enough to stay ahead of its collapse.
The idea that a few of them aren't going to break some laws is kind of laughable. The only problem is whether or not they are penalized.
What is accounting without a history to account for? It’s a part of their living history, similar to Quaker Oats having a history which includes participating in the Manhattan project. I guess I don’t understand why we’re discouraged from including history when we talk about living and breathing companies. Should it be saved for when the company no longer exists? How do we make them accountable when they are gone?
> Plus the whole message of centralization vs decentralized of crypto.
That ship has sailed a long time ago. Crypto is centralized. People have voted with their wallets, overwhelmingly for centralization. Possibly because the #1 demand for crypto comes from exchange speculators, who don't want to pay on-ledger transaction fees.
I'd suggest that JPM and other companies typically go through the 5 stages of loss when encountering a disruptive technology. Denial, bargaining, anger, depression, acceptance. I'd guess this stage is bargaining. Their past statements were denial.
More like, "and then you find yourself paying money to the establishment you were trying to overthrow" in this case. It's a big stretch to say that bitcoin has "won" (or is winning) in any big way against the big banks ATM.
> More like, "and then you find yourself paying money to the establishment you were trying to overthrow" in this case. It's a big stretch to say that bitcoin has "won" (or is winning) in any big way against the big banks ATM.
Agreed, this!
While positive on the face of things as it could keep Dorsey and the Winklevii content as they won't to keeping operating in obfuscated ways to conduct in the 'traditional banking system,' and lets them focus on more pertinent matters. It still doesn't solve what we were all after when we started this: we want to be unbanked by becoming the Bank ourselves.
Although I disagree with your retort: JP Morgan and Jamie can say and do whatever he wants, positive or negative; we ate his lunch a long time ago and he failed to realize how much more of it was taken since then. This doesn't seem more than a petty concession to prolong his relevance to me, they have filed more patents for 'blockchain tech' than any other corp in the US to date.
Take it form someone who on-boarded a significant amount of people into Bitcoin (that were not tech savvy at all) using Visa and MC channels only to have them taken away arbitrarily: this is not a solution, its a stall tactic. And a costly diversion at a time we should be innovating more than ever, cashless payments are the new norm now due to COVID.
We have a superior network/product, let us not be reduced to thinking or appealing to what 'traditional thinking or conventional wisdom' will yield, because if we do then we lost the vision we were after.
Not meaning to troll here, but I can't let these claims go. In what way is Bitcoin superior as a payment network to what we already have? Transaction costs are higher, the transaction throughput is (significantly) capped. Lightning Network was supposed to be the savior and has been "just around the corner" for as long as I can remember. There may be niche cases where censorship-resistance is worth the cost and complexity of using Bitcoin, but the vast majority of transactions do not need this.
Name one other Network, be it payment or otherise, that has had less downtime than Bitcoin's in the last 10 years. Just one.
TX costs have been less than they have for several years now; I personally just made a 3sat/byte tx and it cleared the mempool in less than a hour: I would have one lower but that was the least I could make it. And that was with a sub $1 tx I just wanted to play with to test what it was leading up the halvening. Try doing that with VISA or MC and not have to pay absurd fees for the 'privilege.'
1MB blocksize is a feature, not a bug. I won't explain why, but I'll answer any questions you may have about why that is, if you want.
LN already has use cases, but I agree it was sold as a panacea just 'around the corner,' but the truth is the mainnet network remains uncongested and operational. So it achieved its primary purpose, the rest will come in time and Lightening Labs got more funding from Dorsey so I'm confident progress remains as it has been: unannounced and to very little fanfare unless you work on it.
Lastly, let's not forget how you can literately move $Billions [1] for pennies with no middle men, or the need to have to be some high net-worth oligarch or Arab Shriek to get a bank to do so.
> ...but the vast majority of transactions do not need this.
It's almost like many of you want to be survailed with this kind of thinking, it almost makes me not want to blame the NSA for doing what they have.
I won't even attempt to change your mind about that, but let just say that good OPSEC is perhaps more valuable than it ever has been in our interconnected, digital Life and I only see it being more with time. Data has been the new currency for how long and you still can't see writing on the wall?
> Name one other Network, be it payment or otherise, that has had less downtime than Bitcoin's in the last 10 years
Is payment network downtime a real pain point of merchants? I can't remember being inconvenienced by a full payment network outage in the last decade. I've encountered issues where the connection between the merchant and payment service was unavailable, but paying with Bitcoin wouldn't alleviate those issues.
> It's almost like many of you want to be survailed with this kind of thinking, it almost makes me not want to blame the NSA for doing what they have.
Or, I think that the NSA are nearly as able to trace a US-based Bitcoin transaction if so motivated.
> Is payment network downtime a real pain point of merchants? I can't remember being inconvenienced by a full payment network outage in the last decade...
Very, and it shows you're not a merchant. Thus, not really my demographic so any argument I make will be seen as 'irrelevant' to you or anyone like you. Loss of business due to network failures, or outright denial of services, is a critical usecase for anyone dealing in high volume low margin transactions for goods and services. Especially for one based on e-commerce which is out-stripping brick and mortars these days in case you haven't noticed.
> Or, I think that the NSA are nearly as able to trace a US-based Bitcoin transaction if so motivated.
Blockhchain analytics has been a thing since at least 2013 during the first wave of DNM take downs, and only further substantiates my argument about having proper OPSEC.
> My debit and credit cards have worked flawlessly for my entire adult life. That’s what you’re competing against. The fees are still cheaper than handling cash for merchants.
I'm guessing you don't travel much? I've had my credit card account shut down while in Switzerland on my last days when I tried to buy an airline ticket and after several hours of trying to get a hold of them and explaining to them why my tourist Visa will likely expire before they can reactivate it, they shrugged their shoulders and basically said 'not my problem.' And had to wait for them to get back to me. Meanwhile, I literately had to ask the butcher (I was making dinner for my hosts) to hold on to my order as he was wrapping it up while I went back to go move some BTC around and come back with CHF in hand several hours later, it was rather embarrassing to say the least.
The fees are actually not cheaper for them, hence why places with low profit margins will always have an amount requirement to use Credit Card POS systems and even give discounts for cash purchases for depreciating things like gasoline: you ever wonder why they have 2 different prices? That's why, and its contrary to your argument.
> What happens if someone steals cryptocurrency from my wallet? What happens if someone hacks into my bank account and steals dollars?
The same thing that happens to cash stolen out your wallet: its gone for good. The thing is we have consumer level tech that make it nearly impossible for that to ever take place. The possibility exists, sure but the amount of effort to steal your $50 from a trezor or ledger (short of mugging you) is going to have limited appeal to any adversary.
> Cryptocurrencies don't even solve basic issues like this that actually matter. I can sign up for an Apple Card and use that immediately to seamlessly make payments (it's not the best card but just for illustration purposes) or buy services. I can't do that with any cryptocurrency.
That's a matter of opinion and not fact, given your access to the traditional Legacy system. And, sure you can, a merchant just has to accept cryptoccurency in the first place. I'll grant you they're limited numbers these days, but go ahead and buy something off newegg right now with BTC, it can be done.
Your argument is only valid when dealing with fiat facing transactions, but still that's not true because you can sign up for Square and you can get Visa credit card to load your Bitcoin to in real time once you have it, granted it will take time to verify as with any KYC/AML system but that has more to do with Visa/Fiat then Cryptocurrencies limitations.
> So far there are just too many inconveniences/risks for me to make it worthwhile.
Agreed. Trying to on-board the greatest benefactors of the Legacy system (affluent Westerners) is not a milestone we've been able to achieve yet, but that doesn't detract from the other billions on this planet, thus my arguments are valid anyway.
> Privacy issues aren't really solved en mass either, because companies like Coinbase authenticate you for tax purposes (i.e. the IRS and NSA have you).
First, I call it COiNbase for a reason, second exchanges aren't even really how this tech was supposed to be used in the first place. But I'll grant you due to convenience most will always favour it, and for good reason and that's why Fidelity got onboard when it did.
I'm not trying to even hint that I'm condoning this will evade taxes, and I will say I DISCOURAGE DOING SO (PAY YOUR TAXES!), fiat is way better for that anyway, what I'm saying is that it has valid usecases for those who have issues with the aforementioned problems it solves and have limited access to the Legacy system, which happens to be Billions of People.
I highly recommend people read up on the what is actually the 2nd largest economy in the World, its called SystemD [1]. I'd love to see a revised analysis, since 2020 was a milestone year, and so many have found themselves forced into this system due to COIVID pandemic for mere survival.
> Plus, if you pay with a credit card, you have (in the US, at least) net 30 terms and some form of cash back/reward that comes out of the merchant fees. You could argue that this is a broken, monopoly-entrenching system and I wouldn't disagree with you, but it's the reality of the status quo you're competing with.
You're telling me you'd rather keep everything in place because you get ~1% in cash back, and has a system that monitors, tracks and then sells all of your data to some 3rd party rather than have your money backed by a pseudonymous, limited and an ever appreciating currency then its clear what I'm up against is really you, not the obvious monopoly-entrenching system.
I always said Bitcoin won't hit mainstream adoption based on a monetary value alone, it will only truly achieve that when its entirely indiscernible and just as 'convenient' than the current system, and hopefully it can be iterated to have all the features I mentioned thus far built in by default: much like the Internet most people would never find value in researching, and then deploying SSL despite how much information they divulge on the Internet. The same applies to Money.
Edit: I just had to respond to this as it was too good:
> Bitcoin routinely has >10 minute downtime, it just calls them "confirmation intervals".
Sure, if your assumption is based on thinking PoW and the whole security thing is a downtime thing, too. Think if it more like compiling code or rendering video, that's far more accurate and relevant comparison.
What happens if someone steals cryptocurrency from my wallet?
What happens if someone hacks into my bank account and steals dollars?
Cryptocurrencies don't even solve basic issues like this that actually matter. I can sign up for an Apple Card and use that immediately to seamlessly make payments (it's not the best card but just for illustration purposes) or buy services. I can't do that with any cryptocurrency.
So far there are just too many inconveniences/risks for me to make it worthwhile.
> Name one other Network, be it payment or otherise, that has had less downtime than Bitcoin's in the last 10 years. Just one.
??? All of them? I've never not been able to spend dollars. I've never had an issue where "all payments are down" on a network at a store or website, and if so it would have also affected any sort of cryptocurrency transaction.
> 1MB blocksize is a feature, not a bug. I won't explain why
I think this is one of the inherent issues. Why should it even need to be explained? If people don't just get it from the start, you're already at a disadvantage.
Not to mention, governments will always require cryptocurrency to be pegged to dollar amounts for tax purposes, so it doesn't really solve the main issue I have with fiat currency is that the government can screw up the currency and devalue my wealth accumulation.
Privacy issues aren't really solved en mass either, because companies like Coinbase authenticate you for tax purposes (i.e. the IRS and NSA have you).
> Name one other Network, be it payment or otherise, that has had less downtime than Bitcoin's in the last 10 years. Just one.
This is a goalpost nobody cares about. I've never had a credit or debit card declined because of network downtime, and neither has anyone I know.
> TX costs have been less than they have for several years now;
And still orders of magnitude greater than credit/debit cards.
> I personally just made a 3sat/byte tx and it cleared the mempool in less than a hour:
> And that was with a sub $1 tx I just wanted to play with to test what it was leading up the halvening.
Yes, let me get on buying coffee, and waiting 'less than an hour' for my transaction to clear.
> Lastly, let's not forget how you can literately move $Billions [1] for pennies with no middle men
If I needed a billion dollars moved, the banking fees I'd be paying would be a lot lower than what you'd imagine they'd be. In fact, if I needed a billion dollars moved, banks would be falling over backwards to get my business, because moving money is easy, and they can make more money from providing other services to me.
For the case where I need thousands of dollars moved, exchange rate uncertainty risk vastly exceeds whatever fees I'd be paying.
My debit and credit cards have worked flawlessly for my entire adult life. That’s what you’re competing against. The fees are still cheaper than handling cash for merchants.
Plus, if you pay with a credit card, you have (in the US, at least) net 30 terms and some form of cash back/reward that comes out of the merchant fees. You could argue that this is a broken, monopoly-entrenching system and I wouldn't disagree with you, but it's the reality of the status quo you're competing with.
If all the people holding bitcoins become multi-millionaires in real terms over 20 years I'm sure they'll manage to cope with the philosophical loss somehow.
There is still plenty of evidence that bitcoin is a bad long term investment; but if it turns out to be a once-in-a-generation style success then it seems to be on the right path. The idea of it being digital gold isn't as far fetched as it was in 2016.
Take the Madoff scam that fell apart back in '08. Everyone believed they were making money from 1999 up until it turned out in 08 they had none. And that was in an environment that was considered well regulated.
Financial scams and collapses frequently go 3-5 years looking like a gravy train of wealth creation. And those are actual scams with people lying. Let alone a new phenomenon like Bitcoin where there is a plausibility to the whole thing. That is enough evidence that Bitcoin might just be a fad.
In terms of Bitcoin's actual fundamentals if you want an argument to mull over:
1) There is a slight incentive against new buyers to entering the market - they are pretending that someone who bought Bitcoin for $500 did useful work which is trivially not true. The more the Bitcoin price rises the more true that is.
2) The brand name "Bitcoin" is meaningless long term - look at how the meaning of words shift when it is convenient. Traders don't care about dictionary definitions.
At some point mining ceases and people don't trade enough to sustain the mining network. At that point, the miners all switch to some new ByteCoin. With a powerful hashing network providing a cheap alternative crypto and with incentives against new entrants into the market people stop accepting Bitcoin. The value collapses.
The basic argument is there is no technical difference between Bitcoin and any other crypto. At some point, the miners stop making money and leave; then Bitcoin gets outcompeted. The value retained by crypto tends towards the marginal cost to create new crypto which is 0. This stands in contrast to the argument that the only cryptocurrency that matters is Bitcoin - which I don't think holds true long term. I can see why sellers of Bitcoin would believe that but I don't see why the buyers will cooperate. Cryptocurrencies are completely fungible from a buyer perspective - they can't actually distinguish between them unless the words matter. Or one has a massive hashing network behind it.
Compare to gold - doesn't matter what word is used; gold is still gold. I can go to almost any major civilisation, not speak a word, but wave some gold around and they will recognise it. Words don't matter.
>If all the people holding bitcoins become multi-millionaires in real terms over 20 years I'm sure they'll manage to cope with the philosophical loss somehow.
Given when you entered, some did. Many spent it trying to build what we have today. The former may have given into your reasoning, the latter however did very little to change their behaviour and only their attention-seeking acts changed: look at Amir for example.
> There is still plenty of evidence that bitcoin is a bad long term investment...
Based on what, 2017's absurdly inflated ATH and the ICO scams that made no sense to anyone who actually understood this tech and instead cashed out only to buy back in? Yeah, perhaps to those not capable of seeing any of that it might be a bad position...
> The idea of it being digital gold isn't as far fetched as it was in 2016.
Gold is a relic and an arbitrary thing that has no significance when Money is not only fiat but digital, and can now be programmed to be be defacto finite. I was a PM guy before I got into BTC, and I can tell you right now had I the good sense to trust my gut to trade my metal for BTC back then I'd be in a much loftier position in Life, and yet... no regrets as it taught me many valuable lessons and have me greater insight into Life than people 2-3 times my age.
Specifically, that arguments about 'intrinsic worth' be it by Austrian economists (or there opponents) are really just rehashed fallacies and ideas only relevant to the clergy of Salamanca (who the Austrian's stole their ideas from) and their concepts of 16th Century thinking and Market dynamics.
The 21st Century requires far more nuanced thinking, tools and I just hope we have Fiat to carry us until we become multi-planetary. Modern Capitalism, which is to say State-corporate controlled, is doing away with many myths, and revealing some basic truths; not least of which that Money has and will always be an abstraction.
It's just so damn scary when you understand the implications of that statement and all that it entails when trust is lost in such a system.
Like other metals gold has intrinsic value and can be used in actual, physical things beyond just being shiny or representing an arbitrary unit of exchange.
For example, gold is non-corrosive and a good conductor.
I'm well aware of its limited use-cases. Its also a good heat insulator. I saw a prototype chassis get built with gold leaf being placed around the firewall and the tranny tunnel. While useful, in a very limited usecase kind of way, it still seemed rather absurd to have that material being used could be seen as anything more than commodity.
It's like saying Carbon Fibre should also be a currency as it has equally limited usecases.
But none of that really changes the fact that 'intrinsic worth' is just a convenient word/argument people throw around to dismiss something they don't like or understand, failing to see that fiat has lost any of its intrinsic worth for over an entire generation (starting with the USD in 1913) and has brought about a level of prosperity never seen before in the World.
It's a trade off I'd make in a heart beat if I knew for certain that the generations to follow would have a quality and standard of Life comparable to Nobels if I were a poor peasant in 1912.
Whatever paradigm metal backed currencies had utility in has been lost and while many may opine for its return, I'm glad it happened. I don't think you could truly fund a successful Space Program or something like the Internet without (at least initial) massive fiat deficit spending; and that is something most deluded 'libertarians' find unnecessary.
Though that same property is what is supposed to be the vanguard to prevent war, yet one needs to only look back in Imperial European and Asian History (especially feudal Japan) to see just how wrong that really is.
That's an extremely silly and nonsensical argument.
Intrinsic worth means that an item has inherent, non-economic usefulness, i.e., you could use it even in the absence of trade of that item.
Gold has because it can be used to protect items from corrosion, to conduct electricity, etc., and these uses don't depend on it being traded.
Carbon fibre similarly has intrinsic uses, because you can do things with it even in the absence of trading it, like making cloth, parts, or vessels.
Fiat currency does not have intrinsic value. It's sole value is that it is accepted by a government agency for debts owed by the government, and/or that it is the legally recognized method of non-barter exchanges of value.
Cryptocurrency has no function apart for its role in trade, which is why--like fiat currency--it has no intrinsic value. Without trade, it's useless. It's sole proposition for having value is that the other people might want it.
> Gold is a relic and an arbitrary thing that has no significance when Money is not only fiat but digital, and can now be programmed to be be defacto finite.
I feel compelled to point out gold has been outperforming Bitcoin for 2 years now and has been a performant investment to buy in to at basically any point in the last 15 years except 2012.
> I feel compelled to point out gold has been outperforming Bitcoin for 2 years now and has been a performant investment to buy in to at basically any point in the last 15 years except 2012.
It what sense, because it's spot price remains at $1200, if you're talking about day-day roi then that's cherry picking at its finest as very few people who actually hold physical trade it.
The paper markets are, much like anything Wallstreet, a machination so far detached from the real thing its hardly relevant.
But, sure, lets assume the paper market has outperformed Bitcoin; lets see your numbers to validate that?
The spot price hasn't been anywhere near $1,200 for more than a year. 15 years ago the spot price was around $400.
Gold went from ~$400 in 2005 to ~1,300 in 2019. That is about 3x.
S&P 500 went from ~1,100 in '05 to ~3,000 in 2019. Also about 3x.
Gold is doing fine. And turned out to be a much better bet than stocks after including 2020 :D.
And if you want to put a bitcoin price chart side by side a gold price chart over the last 2 years it sorta speaks for itself. Gold went up. Bitcoin went all over the shop, averaging flat. If you want to call 2 years cherry picking be my guest, but it hasn't been a performer recently. It isn't a point of contention that Bitcoin is up infinitely from 2005.
>Don’t ask me to short it. It could be at $20,000 before this happens, but it will eventually blow up,” he said. “Honestly, I am just shocked that anyone can’t see it for what it is
$20,000 before it crashes? Sounds like he was right tbh
Only if you take "blow up" to mean "it will go to 20k and then back down to several k per", which I'm pretty sure was not what he meant. He meant it'd go to zero (or pennies).
Silvergate Bank deserves a lot of credit here for being an early backer of crypto. It's really the work of banks like theirs that have dragged the bigger banks forward.
That’s the entry point from whence you divine that ‘crypto’ has failed at becoming a payment system (as it was originally envisioned to be) and has instead become a mere asset class for speculation.
The cop-out snide answer is “anybody who lives outside the US and doesn’t use dollars as their main currency”.
The answer that actually addresses the central question, however, would follow the lines of “if a scrip does not have institutions that use it natively across the board to address all functions of a currency, but rather depends on gateway institutions, then it isn’t a currency”. (A ‘scrip’ is a kind of quasi-money token system such as “Disney Dollars” at Disney’s amusement parks, vouchers used in company towns, and so forth.)
The moment you try to move any substantial amount outside of the traditional system you're basically under suspicion of terrorism or breaching trade sanctions.
This might seem like hyperbole but it's true.
And by substantial I mean a months pay for the average software engineer.
Only the extremists believe that crypto will take over all financial transactions ever.
Instead, most reasonable crypto supporters believe that crypto will be helpful for certain usecases, while the existing financial system will be useful for different usecases, and they will both survive together.
These extremist arguments would be like if people were to argue, back in the day, that PayPal was going to get rid of all banks.
That obviously didn't happen, but few people would say that PayPal has "failed". It is definitely still useful for many things.
The whole either/or is a false dichotomy for another reason as well: Established actors in financial services will adopt Bitcoin as demand exists for it.
At somepoint someone is going to need to buy/sell bitcoin for $/€/£, when that happens you need to have some interface to the non-digital world. That requires banking services.
Places to store the money, the ability to receive the money, and the ability to send the money.
This is a big deal for the crypto industry. If you've ever transacted between your bank and a Bitcoin exchange you may have seen the boutique banks they've been dealing with labelled on your transactions. It's been hard for these companies to get a big name-brand bank onboard. This really helps lubricate the money-go-round.
So much for ‘crypto’ becoming an payment system independent of the “fiat currency”-based fractional reserve financial system all the crypto-goldbugs rail against on a regular basis.
This just shows that ‘crypto’ has failed at its stated aim of becoming a payment system and has instead devolved into being an asset class for speculation — a volatile one at that because it’s totally devoid of fundamentals.
Certainly as a payments system, Bitcoin looks to be failing/has-failed/will-fail. But there is another possible future other than being a fake-internet-money "asset class for speculation... devoid of fundamentals": a long-term return to something akin to gold-backed aka bitcoin-backed fiat currency.
Personally, I don't think deeper integration with traditional fiat currency/banking systems is a sign of failure; rather, it's the first step towards this possible future (which of course, is highly unlikely still, but 20 years ago it was 0% likely, 10 years ago it was 0.00000000001 likely, and now, who knows maybe 0.0001 likely?).
Of course, this too, is all speculation. It's hard to predict the future.
I generally welcome this but I feel bad for the boutique banks that were providing this service: now they've taken all the risk and proved it's profitable, JPM etc will swoop in and take the business.
They might even offer Exchange services on their own. They'll be easily able to migrate Gemini/Coinbase customers to their exchange then - I don't assume Gemini/Coinbase have added contract clauses in order to avoid this.
JPM will offer them 0.5% lower fees. They can do that because they have lower fixed costs. If you're an exchange, 0.5% increases your profit margin by 10%. Hard to say no to that.
This might be due to a rise in use of tracing services such as Chainalysis and Elliptic. Exchanges want to employ them to comply with AML but on the development side, the community is actively working to neuter the efficacy of those services.
Once that happens, banking access might be withdrawn once again.
I’ve said it before, Bitcoin is one of the least anonymous currencies ever devised. A permanent, public transaction log of every trade a wallet has ever made does not make anonymity easy.
Sure, there are some techniques you can use (mixers, for example), but if any of your techniques are defeated in the future your entire transaction history will be unmasked forever, which is bad.
True, but if you know what you're doing it's not that hard to reclaim anonymity with BTC. I'm mostly referring to mixing services here but of course there's more to it than that. Bit complicated but still not hard.
My bank was much more polite, they asked me what I was doing because they had seen a bunch of people transferring to the same offshore account(mtgox). Had to explain what Bitcoin was but then they were fine with it.
I mean, only if you view BTC as a full scale replacement to fiat currency, which currently it just isn’t and cannot be in the near term. For wider adoption BTC needs easy and reputable interoperability with fiat, which big banks can provide.
Clearly this is a CIA plot. I know people who work in JPMorgan and they have shown me APIs specifically designed to detect deep web bitcoin purchases. Let's just say that there's no such thing as privacy anymore.
I've long believed that bitcoin started as a CIA black budget program. I know it's out there, but they are one of the few organizations with the development skills and opsec skills to put out an anonymous application. The motivation makes a lot of sense too.
The dubbed successor to Nakamoto visited the CIA. [1] Speculated about in the article, my theory has always been that it was an interview of sorts.
Anyway, just a conspiracy. Take it with a large grain of salt.
Agree that it is an enticing and certainly plausible theory, but it doesn't seem to line up with the actual events of Gavin visiting the CIA and Satoshi disappearing right after that, even if you grant them n-dimensional chess plot mastery, unless Gavin was either a mole all along, or inexplicably turned into one.
Edit: I won't delete this, as I think it's an interesting discussion, but I immediately realized they could have just been playing Gavin all along. And his scene with CSW certainly highlighted his gullibility. Hmmm...
> but it doesn't seem to line up with the actual events of Gavin visiting the CIA
Just so it's clear I was deeply hurt with the loss of Gavin in our Community, and it shows why Power should never be trusted with Humans, given it's propensity to corrupt--who the hell would call him Chief Scientist of an open-source project, besides the Foundation?! However well meaning a person may be or seem.
With that said, I think his visit to the CIA was a co-opt which is why he teamed up with Hearn (ex-google) to try and make a play for Bitcoin XT/Classic forks. He had become the face of Bitcoin after Satoshi, and was US based, so it makes sense the CIA wanted to meet with him.
What was unexpected was Gavin's actions afterwards, Cypherpunks (espeically the Crypto-Anarchist type that were the norm in Bitcoin back then) aren't traditionally afraid to go to Prison for thier convictions: as we've seen since Zimmerman and PgP. Hal was the person that embodied Bitcoin the most, but given his health it makes sense why he took a backseat to it all and let the children take the spotlight.
CSW was a farce, giving Gavin an immediate exit from the Community by then; subsequently, it cost him his entire reputation and his standing.
@NullC: what do you have to say about any of this if you're reading this?
Gavin's endorsement of CSW really is one of the strangest things in Bitcoin's history. Barely Sociable's Satoshi reveal touches on it a bit. I also think it is pretty telling that Greg hasn't publicly commented (that I'm aware of) on the video despite still refuting CSW nonsense on an extremely regular basis. As someone with a ton of respect for Greg, I too would love to hear his thoughts.
Hmh? The video is high production value barely disguised nonsense, through and through. Most of the content is uncritically rehashing the same thoroughly discredited talking points that Roger Ver has been paying astroturfers to repost for years (the weird allegations about Theymos, for example).
For click-bait and harassment purposes they stuck some nonsense about Adam Back at the very end of it-- using arguments that were thoroughly debunked such as the use of two spaces after periods when they were applied to other people.
Lots of people in Bitcoin have destroyed or otherwise declined to share any private communications with Satoshi, myself included. Personally I think lowly of people who've shared such communications.
I posted crapping on this video within minutes of watching it, two days ago.
As far as Gavin goes-- His (substantially unwithdrawn) endorsement of Wright just made clear to the public what a lot of other people had known about him for quite some time. When Gavin's endorsement of Wright came out the shocking part was less that he'd do something like that, the shocking part was that he apparently thought he'd get away with it.
Get away with what though? Do you believe Gavin was a willing dupe using the CSW narrative to push bigger blocks? Honestly before watching the video it was something I hadn't even considered. I was certain Gavin was simply naive. Thanks for taking the time to reply.
Wilfully indifferent to the truth because Wright's position matched perfectly with what he'd been pushing for is a possibility between outright complicit and completely naive.
Wright was transparently, painfully, fake to every (other) technical expert. He can't make it 5 minutes talking about Bitcoin without inserting some claim which is obviously false or outright nonsense. Considering his chosen vocation (satoshi impersonator) he's been extremely uninformed about Bitcoin's technical history... worse, he tends to try to employ "bet you didn't know" 'zingers' based on reading some public summary which are just incorrect (because he misunderood the source or the source was wrong-- wright isn't very literate in code).
For a person who is technically proficient in Bitcoin to fall for him it isn't sufficient for them to have just been tricked by him, they also have to be blind to more red flags than a communist military parade. :)
I always thought that Gavin had some kind of bizarre ideological or personality change. He had seemed like a wise, smart and good guy for a long time. Was that not so? As an outside observer, I'm genuinely curious.
I guess the thing to understand is that Gavin was (is?) a literal politician-- though only one at the small scale of his town government. He was extremely generous with the glad-handing. It was the norm for him to agree kindly with you in public and to your face while chasing a conflicting agenda in private.
It made for a reliably good initial impression but often lead to a bad relationship in the long term. Over time, you'd learn to recognize the coded language "Ok." meant "I disagree profoundly and I'm going gonna screw over this plan behind your back." and dread dealing with it.
So, for example, he'd disagree with something the development community was working on but instead of confronting it directly, he'd go to companies as a representative of the development community and advocate for his position (without disclosing that he alone held that position) but then come back and tell us that it was something the company was demanding. He even went as far as to recommend obscure altcoin developers to companies looking to employ a bitcoin devloper full-time, presumably to protect those relationships and maintain that leverage.
So essentially sticking himself in the middle of things and presenting himself as speaking for people he didn't speak for. This proxying went swimmingly when there was broad-spread agreement and rapidly turned into a mess when there wasn't.
As time goes on we continue to slowly learn more. For example, recently I learned that people were given highly edited copies of email chains between the active Bitcoin devs that eliminated most of the disagreement's with Gavin's positions, and falsely made it look like other people agreed with him in discussions where, in fact, no one agreed. It'll probably never be possible to tell if distortions like that were intentional or just a result of a profound tunnel vision that came from fundamentally not respecting other people's positions.
What you see as a change in ideology or personality I think was a combination of reaching a point where the web of appeasement couldn't be maintained anymore, where people who previously provided sound advice behind the scenes no longer cared to offer their council because they'd been alienated, and the stress and desperation as the plan he'd invested so much in was falling apart.
There were flashes of that long before, even extremely public ones like the infamous "Luke-jr is a toxic person" post that arose because luke steadfastly wouldn't support Gavin's position on what was mostly technical minutia. (Admittedly, Luke can be pig-headed and annoyingly impervious to political winds but that post was entirely inappropriate).
“Compared to privacy coins Wasabi is just a temporary hack. I think without Confidential Transactions, as the transaction fees grow, privacy will be priced out of Bitcoin's main chain.”
In the specific context of coinjoin confidential transactions has the benefit of at most halving the amount of transactions needed to get privacy by eliminating the need to match values. I think that comment is overstating the limitations there.
its 'private' and 'anonymous' as long as no one can trace back the transactions to your wallet, hence the need for bitcoin mixers for 'unsafe' purchases
Solo-mining a block is basically impossible these days. Also I would assume all remaining Bitcoin mixers are honeypots. You can get some degree of privacy in Bitcoin with coinjoin but it is slow, cumbersome, has high fees and is not a proper solution for decentralised cash. There is also the possibility of ending up with tainted Bitcoins.
I also disagree that you only need privacy for “unsafe” transactions. Everyone has a right to privacy in their day to day life.
I know someone who bought a few hundred bucks worth of bitcoin a couple years ago out of curiosity, trying to maintain anonymity the whole time. He was able to set up an account on an exchange through TOR with no personal info, but in order to transfer cash his only real option was to deposit it into the bitcoin seller's account at a bank he'd never been to before (where he was still, of course, on security cameras).
His conclusion was that the only reason people aren't being prosecuted across the board for dark web purchases is because it benefits the authorities to let them think they can get away with smaller transactions so they'll be tempted to make larger ones.
> His conclusion was that the only reason people aren't being prosecuted across the board for dark web purchases is because it benefits the authorities to let them think they can get away with smaller transactions so they'll be tempted to make larger ones.
Possible, but that negates the fact this tech can and should be mainly be used P2P. There are still options for good OPSEC outside if you're willing to step away from your keyboard.
It most certainly won't be cheap, or convenient (most times) that much is clear, but its totally do-able even now to remain entirely untied to your tx.
> It most certainly won’t be cheap, or convenient (most times) that much is clear, but its totally do-able even now to remain entirely united to your tx.
If I needed to get you $10,000 and remain entirely untied to the transaction, how would you suggest I proceed?
> If I needed to get you $10,000 and remain entirely untied to the transaction, how would you suggest I proceed?
What's the saying: Buy my book?
No, but seriously, after this whole COVID thing and how certain Industries are still denied banking and financial services, yet equally deemed 'essential' has made me re-visit the idea of re-launching my fintech startup with a vetted and specialized Team.
Perhaps one can track those who pushed bitcoin early on: those who were connected to founders of Silicon Valley properties we all know and love. The name suggests Japan and Hawaii are obvious nexuses to investigate. Punahou grads, Japanese connected CIA folks perhaps?
Exchanges all adhere to KYC, so this is relatively low risk for established financial institutions who are already familiar with commonly accepted methods of money laundering. https://en.wikipedia.org/wiki/Know_your_customer
Tinfoiled among us could see the limited incursion of federal oversight into this venture as a natural progression from the existing system by which corporations and dynastic elites funnel wealth into traditional Cayman/Geneva strongboxes which have a tedious habit of being exposed to the press, to a system of truly untraceable laundering.
Combine this with the 2020 creation of Privacy ICAO Addresses in ADS-B transponders and it becomes clear that the cloistered elite really do not want you so much as thinking of them.
The elites will always be able to secretly transfer money around with the help of the government. What they do not want is for average people like you and me to be able to do the same.
I would rather banks not spy for the government, and to be able to fly my own airplane without broadcasting my position in a government directory. If that means empowering rich people, so be it - they are gonna get empowered either way.
This is fine if you want to sit on some Bitcoin as an investment, like literally have bitcoin sitting in your Coinbase wallet, but I’m not sure how great it is for anything else.
You still can’t really buy bitcoin quickly on Coinbase and transfer it to a online poker site for example (directly, without raising possible issues). Now add JPMorgan into the mix.
One of the early hope for Bitcoin was that Bitcoins would be 100% "fungible", as in : one coin is exactly like another.
Unfortunately, because the Bitcoin blockchain is fully transparent (all transactions can be seen by everyone) that assumption has turned to be largely incorrect: where you coin comes from matters a great deal, and if it came from a suspicions source, it is "tainted".
There are numerous effort to fix this gaping flaw (Monero, ZCash, the various mimblewible based coins, and even some efforts in that direction on the Bitcoin chain like coinjoin), but tracking where from an where to money flows on the Bitcoin chain is still very easy today.
Coinbase is taking full advantage of that to rub the regulator the right way.
> transfer it to a online poker site for example (directly, without raising possible issues)
If we think of Bitcoin as an electronic cash equivalent, isn't this a bit like worrying that you can't get away with making a withdrawal at the counter followed by a purchase from your drug dealer on the sidewalk out front?
What's far more concerning is the (even remote) possibility that any of the tracing services achieves technological success.
Sure, but I guess my point is if you are not using Bitcoin to circumvent soft laws (online poker) or investing, every other use case just doesn’t make sense. You’re converting cash to coin and then back to cash, and it’s all tracked like a bank statement. What’s the general use case of that?
I thought we were supposed to not have a central authority approving transactions?
If you are holding significant Bitcoin over a long period I don't think it's recommended to have it sitting in an exchange wallet. Most of the top tier exchanges have very good security these days but there is an extra risk as opposed to holding it on a paper or hardware wallet.
> If you are holding significant Bitcoin over a long period I don't think it's recommended to have it sitting in an exchange wallet
You are correct (not your keys, not your bitcoins), but the vast majority of Bitcoin purchasers these days are physically incapable of doing anything else given how complicated it is to properly manage your own private keys.
Yes you could definitely make the argument that holding your own bitcoin wallet is less safe than having it on an exchange for 99% of users. I'd even count myself in that group.
> So how can CB find out if you're using it on poker?
The poker site can generate independent addresses A1, A2, A3, ... to receive deposits. But then they also need to handle withdrawals. A withdrawal transaction might for example consume the amount in A1 plus part of the amount on A2, sending the leftover change to another new address. Now A1 and A2 have been observed to be under the control of the same entity.
All addresses of the poker site can be linked together like this, by tracing the "taint" from a single known address. The poker site can try to split their addresses into subsets that are isolated from each other (selerate "wallets"), but then a blockchain analyst can simply keep doing deposits/withdrawals to find them all.
This might be true for a service with a basic setup of providing the same address for deposits. If they did it the right way, they would provide a unique address each time. Such a list of addresses is only known to the key holder unless they were to share it.
https://github.com/bitcoin/bips/blob/master/bip-0032.mediawi...
Do they e.g. stop you from transferring it to a new wallet, and then to a forbidden address? or rather, how many edges does the money have to traverse before it's no longer under their monitoring?
Trivial to evade: Just transfer to your own wallet (e.g. Electrum) then back to yourself (from Electrum to Electrum again), and then to the poker site. They won't be able to prove that the intermediary (second Electrum address) was you.
The example you give to try and evade coinbase checks is trivial to track, and the big US exchanges use chain analytics tech. to do this.
Just try it, and you'll see what happens to your account.
To do what you suggest is of course possible, but requires far more "exertion" than what you suggest and certainly more than the average user is technically capable of.
Can you explain how a Bitcoin blockchain analysis company can track this?
For example, I transfer to an Electrum address from Coinbase. Then I make a transaction that has a single input spending that address, and two outputs, both with newly derived addresses that belong to me (unknown at that point to the chainalysis). Then I make a third transaction with one one input, spending one of those two new addresses that belong to me, and one output with the address of the poker site. How does Chainalysis know that the new address that was spent by the input of that last (third) transaction to the poker site was mine (at least till I spend the second output from the second transaction)? What am I missing?
From what I know, chain analytics uses various heuristics and it's inherently probabilistic: the more hops, the less certainty
But they can't assume it's under your control indefinitely. If I buy some Bitcoin, and use it to pay for something online, the seller could sell it to someone else who uses it on a poker site. Am I responsible for their use?
Are blockchain analysis companies able to detect what you are describing? Yes. Is it possible that exchanges say we ignore everything after n amount of hops? Also yes. It depends on what exchanges specify.
Let the hop wars begin then..., I know it's easier for wallet makers to add more hops to anonymizing tech than for chainalysis to deanonymize the transactions....when 90+% of the wallets do this by default, that company will probably have to shut down.
No, that’s not what my comment intended to say. While some exchanges say they will ignore everything after a few hops, blockchain analysis companies can track them fine. Moving Bitcoins between wallet is not anonymity and does not give you plausible deniability against law enforcement.
>Moving Bitcoins between wallet is not anonymity and does not give you plausible deniability against law enforcement.
Moving fractions of bitcoin between 100+ wallets using something like coinjoin absolutely gives you plausable deniability and anonymity, how would anyone know what % is still in your custody?
With enough people doing this, eventually all bitcoin will be tainted. At that point will exchanges start to refuse 100% of all bitcoin being deposited?
I think its more likely chainalysis goes bankrupt.
Maybe things have changed, but I recall Coinbase catching poker site transfers.
Most people usually pull it out of Coinbase to another wallet and transfer from there to avoid any issues.
But you sure as hell aren’t going to be able to transfer poker money into Coinbase and then dump it into your Chase account. At least I don’t think you can.
doesn't this sort of financial restrictions kinda destroy the purpose of using bitcoins? Are they doing this to comply with regulations? Or is it a malicious chilling effect banks implement but still be seen as allowing for bitcoins?
https://www.ccn.com/crypto-startup-jp-morgan-chase-closed-ou...
https://www.cnbc.com/2018/02/02/jpmorgan-chase-bank-of-ameri...
https://www.theguardian.com/technology/2017/sep/13/bitcoin-f...
And countless more if you modify your Google search w/ anything previous to 12/31/19.