FTX

[plodder]

They need a stock exchange, crypto is potentially independent.

You don't need an exchange to trade stocks. Private trades happen all the time.

Bit cumbersome to use privately traded stocks as a currency though, no? You're being a bit too stubborn here, you're not making the point you think you are.

[dyqik]

What problem does that solve, and what problems does it introduce?

Note that you do not need crypto to cut out the central banks. You can just use stocks, commodities, precious metals, etc. as currency. Or issue non-crypto specie. You could use beanie babies if you want.

They need a stock exchange, crypto is potentially independent.

It introduces lots of problems, and solves things you may not think are problems. Bypassing banks is seen as a potential solution to the problem of the established financial elites who spin our money for their gain. I'm not a huge proponent of crypto so I'm not here to argue strongly for it, other than to say there is an argument to be made and it might be interesting to have it instead of a stonewall pig headed refusal to engage.

It doesn't bypass banks because distributed ledgers are dreadful at what they do. So on the whole you have to trade on an exchange, which is effectively a bank.

Which is why this thread is nominally about FTX, and not plodder's vendetta against a stable paycheck.

[dyqik]

They need a stock exchange, crypto is potentially independent.

You don't need an exchange to trade stocks. Private trades happen all the time.

Bit cumbersome to use privately traded stocks as a currency though, no? You're being a bit too stubborn here, you're not making the point you think you are.

The clumsiness is also a feature of non-exchange crypto, which is part of my point.

The main point is that you need government backing and guarantees for currency exchanges to work quickly and reliably. And that crypto cannot keep up with all the transactions that the modern world needs without exchanges and banks, and a day to day fiat currency.

[dyqik]

FTX existed because crypto can't even keep up with day to day investment speculation of a few stocks in a niche market. It just doesn't scale to use as a currency.

[plodder]

You don't need an exchange to trade stocks. Private trades happen all the time.

Bit cumbersome to use privately traded stocks as a currency though, no? You're being a bit too stubborn here, you're not making the point you think you are.

The clumsiness is also a feature of non-exchange crypto, which is part of my point.

The main point is that you need government backing and guarantees for currency exchanges to work quickly and reliably. And that crypto cannot keep up with all the transactions that the modern world needs without exchanges and banks, and a day to day fiat currency.

Neither do banks. I’ve just sold a van, I chucked in a bike rack to sweeten the deal. I would have been happy to accept a mixture of used banknotes and BACS. That’s three currencies right there, in one transaction. No reason why crypto couldn’t have been one of them and no need to have one type take over from all the others.

[plodder]

FTX existed because crypto can't even keep up with day to day investment speculation of a few stocks in a niche market. It just doesn't scale to use as a currency.

They will have said the same about the whole faff of minting coins or printing banknotes, a point I made earlier.

[nekomatic]

Well, traditional high finance doesn’t exactly have clean hands. It’s just they don’t have to crash helicopters, they can do things like have a gulf war or whatever.

What was the role of central banks and government regulation of money in either Gulf War? I am engaging here, I genuinely want to understand this.

[dyqik]

FTX existed because crypto can't even keep up with day to day investment speculation of a few stocks in a niche market. It just doesn't scale to use as a currency.

They will have said the same about the whole faff of minting coins or printing banknotes, a point I made earlier.

Bearer notes were largely introduced to because of the transaction, transport and security costs and hence lack of scalability of bullion currency. Printing notes was easier than ensuring trustworthy bullion coins. Bearer notes did introduce a significant improvement on the transport costs and fraud costs over bullion currency, which is heavy, can be fenced for the value by weight of the material, and needs an assayer to assure honesty.

We don't use bearer notes much anymore, instead relying on government regulated and guaranteed electronic banking for most transactions, as that reduces transaction, transport and security costs even further. This wasn't really viable at scale until electronic technology and public key cryptography caught on.

Bearer notes like banknotes and coins do have relatively low transaction costs, which places them one up on crypto. They do have relatively high security and transport costs though. Whether crypto improves on those is an open question. That it could improve on the current electronic banking is extremely unlikely, as crypto transactions are inherently more costly than electronic banking transactions, for no real added security.

[plodder]

Well, traditional high finance doesn’t exactly have clean hands. It’s just they don’t have to crash helicopters, they can do things like have a gulf war or whatever.

What was the role of central banks and government regulation of money in either Gulf War? I am engaging here, I genuinely want to understand this.

The argument would be that it's an indirect link, something along the lines that the elites maintain their position by (amongst other things) chiseling away at the rest of us through a financial system that directly enriches them and maintains their position. With this guaranteed, they then act like a..eholes with absolute impunity. So by undermining the financial system (i.e. established banks etc) we also undermine the shriveled evil bastards that pull the strings and make us pay for their greed. So it ought to help with things like invasions to control oil fields that result in privatisation of whole economies to the c.nts whose idea it was.

I find it hard not to be at least slightly sympathetic to this point of view.

[Opti]

Interesting, but obviously very biased , ECB blog post today.

[lpm]

The weirdest bit is how you say stuff like "the established financial elites who spin our money for their gain" and "the elites chisel away at the rest of us through a financial system that directly enriches them and maintains their position. With this guaranteed, they then act like a..eholes with absolute impunity".

Which perfectly fits the crypto elites and the financial system they've rigged to directly enrich themselves.

I'm not sure how much more obvious it can be, what with crypto billionaires dying in private helicopter crashes and falling out of penthouse windows.

[plodder]

The weirdest bit is how you say stuff like "the established financial elites who spin our money for their gain" and "the elites chisel away at the rest of us through a financial system that directly enriches them and maintains their position. With this guaranteed, they then act like a..eholes with absolute impunity".

Which perfectly fits the crypto elites and the financial system they've rigged to directly enrich themselves.

I'm not sure how much more obvious it can be, what with crypto billionaires dying in private helicopter crashes and falling out of penthouse windows.

Your point being what, lpm? That the people who manage the financial systems use it to enrich themselves? You're now agreeing with me?

[lpm]

Of course I agree with that. The playing field is obviously tilted in their favour.

But you don't agree that the worst capitalist scum out there are using crypto to enrich themselves at the expense of the masses.

[plodder]

Of course I agree with that. The playing field is obviously tilted in their favour.

But you don't agree that the worst capitalist scum out there are using crypto to enrich themselves at the expense of the masses.

They're not the worst by a long way. They're just operating in front of the curtain, because they haven't taken over the curtain yet. The key concept you appear to be missing is that in theory crypto doesn't need anyone to control it. That may be a dreadful idea but it may also help shrug off the worst of the grasping bastards.

[lpm]

It's very fact that it doesn't have anyone to control it that hands over dominance to the worst of the grasping bastards. Organised crime, thieves, neo-nazis, money launderers.

In human societies whenever there's no control and no regulation it's the bullies and spivs who thrive.

[plodder]

It's very fact that it doesn't have anyone to control it that hands over dominance to the worst of the grasping bastards. Organised crime, thieves, neo-nazis, money launderers.

In human societies whenever there's no control and no regulation it's the bullies and spivs who thrive.

Excepting, or course, those blessed thugs right at the top of the tree.

[Gfamily]

I think this thread can go to the pit. It's no use here any more.

[nekomatic]

What was the role of central banks and government regulation of money in either Gulf War? I am engaging here, I genuinely want to understand this.

The argument would be that it's an indirect link, something along the lines that the elites maintain their position by (amongst other things) chiseling away at the rest of us through a financial system that directly enriches them and maintains their position. With this guaranteed, they then act like a..eholes with absolute impunity. So by undermining the financial system (i.e. established banks etc) we also undermine the shriveled evil bastards that pull the strings and make us pay for their greed. So it ought to help with things like invasions to control oil fields

That's not an argument though, that's a few broadly stated generalisations connected by hand-waving. Rich people are powerful; powerful people get rich. That's not in dispute. There are many rich and powerful people other than bankers though - I thought the popular explanation of the Gulf war(s) is that they were fought to protect the interests of oil companies and defence contractors, not bankers. Can you go into some detail on any of these ways in which we're 'chiselled away at'? The two obvious ones to me would be interest payments on overinflated house values, and taxpayer bailouts for banks that failed because their nominal assets turned out not to be worth what they said they were. Both of those look to me like problems of under-regulation of money and finance, not over-regulation. Or will crypto enable people to buy houses and businesses to raise capital and offset risk and all that jazz in some way that doesn't need banks or equivalent parties? If so, how?

[IvanV]

Can you go into some detail on any of these ways in which we're 'chiselled away at'? The two obvious ones to me would be interest payments on overinflated house values, and taxpayer bailouts for banks that failed because their nominal assets turned out not to be worth what they said they were. Both of those look to me like problems of under-regulation of money and finance, not over-regulation. Or will crypto enable people to buy houses and businesses to raise capital and offset risk and all that jazz in some way that doesn't need banks or equivalent parties? If so, how?

The economic history of the last 3000 years shows that increased financial and business freedom has always been associated with increasing inequality. Though, of course, if one starts from a largely subsistence society, where life is nasty brutish and short, that inevitably has low levels of inequality, else the unequal would die, then it is very difficult to have any kind of growth away from that unpleasant situation without some inevitable increase in inequality.

The relatively few episodes in history where economic growth has happened alongside reducing inequality - mainly some periods in mid-20th century - it has been mediated by strong state measures to manage that growth and redistribute. Otherwise, inequality has mostly been reduced only by and/or in the aftermath of events one wouldn't recommend, as they have involved rates of death that make the current war in Ukraine look mild.

[bjn]

The ECB calling out Bitcoin as b.llsh.t.

https://www.ecb.europa.eu/press/blog/da ... 19.en.html

[lpm]

Opti already posted that. It says what nearly all of us have been saying on this thread.

[bjn]

Sorry. I obviously wasn’t paying enough attention. I blame my tooth ache.

[bolo]

Sorry. I obviously wasn’t paying enough attention. I blame my tooth ache.

No worries. Some of the posts in this thread would give anyone a tooth ache.

[Bird on a Fire]

To be fair, Opti is always ninja'ing people with blogposts from the European Central Bank.

[Millennie Al]

It's very fact that it doesn't have anyone to control it that hands over dominance to the worst of the grasping bastards. Organised crime, thieves, neo-nazis, money launderers.

In human societies whenever there's no control and no regulation it's the bullies and spivs who thrive.

That's the same kind of reasoning that supports Plato's philosopher kings. But in reality we have seen many rulers who were dictators ruling extremely harshly for their own benefit. The need for strong central leadership is an illusion. This is why we now have somewhat democratic rule in many places - distributing the control as widely as possible.

Cryptocurrencies are not intended as an alternatve to banks. They are intended as alternative currencies. Like democracy, they seek to remove central control and rely only on control which can be spread widely.

Existing currencies have various drawbacks. Gold, silver, gemstones etc are free from a central issuer and fairly compact, but they are difficult to transport securely, hard to evaluate when presented by a non-trusted source, and too easily found in a search. Banknotes and coins are more convenient in being of known value, a bit easier to transport, but also easy to find and susceptible to being undermined by their issuer. Crypto is intended to be like gold in having no issuer who can steal value by making more, like banknotes by being easy to verify, and also being easy to hide and thereby being hard to seize.

Many people see little or no problem with strong central control, which I can only assume is due to living an insulated, privileged life. Have a look at https://en.wikipedia.org/wiki/Corruptio ... ions_Index and see how much of the world is green (perceived as less corupt) compared to how much is red (perceived as more corrupt).

Of course, merely attempting to solve a problem is not the same thing as an actual solution. The evidence of experience with existing cryptocurrencies does not suggest that they are very successful in what they are attempting.