The Future Of Money

[veni vidi vici]

Probably The gold standard was never what backed up the dollar. That's a bit of a libertarian fairy tale and I say that as someone who is a little 'L' libertarian.

Oddly enough, what backs up the global currency is the naval power of the issuing government - its the ability to 'project force'. That's been true since the Spanish Armada, through the western Europeans, and now the American Hegemony.

Excellent summary!
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This is what backs up the dollar.


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[Olsonist]

One of my filters is to not listen to those who are barely conversant as they babble nonsense.

People wonder what purpose it serves. How about: it's an option in the search for something to trust more than US politicians' "full faith and credit" that they occasionally talk about defaulting on.

I'm barely conversant in trusting politicians but one of my filters is that anyone who does trust them (hi most everyone) is a bozo.

Yeah, that's it! It's an option in the search for something to trust more than US politicians "full faith and credit" that they occasionally talk about defaulting on. Yeah, that's the ticket!

Tom, it was always a Ponzi game, from day zero when Satoshi pre-mined 1.1M BTC before starting the game.

 

[MR.CLEAN]

The Duopoly is one party.

what's 'the Duopoly' and why is it capitalized?

 

[Olsonist]

2nd largest donor to TeamD, huh?

The Duopoly is one party.

Saved for posterity.

 

[Pertinacious Tom]

what's 'the Duopoly' and why is it capitalized?

One for one from here on out.

Meaning, you answer one of my questions before I answer yet another of yours. Start in the drug war looting thread.

 

[BeSafe]

This was the fairest distribution he could have come up with given what he was building/timing/audience. It’s intellectually dishonest to compare Satoshi’s early mining of Bitcoin at a loss, with premining of an ICO with a positive market value (or expected positive market value).

 

[Pertinacious Tom]

It’s intellectually dishonest to compare Satoshi’s early mining of Bitcoin at a loss, with premining of an ICO with a positive market value (or expected positive market value).

Yeah, it's Olsonish to do that, but you gotta do whatever to support the Team!

 

[Pertinacious Tom]

I've seen the future of money and everyone will be much smarter if we just regulate!

 

[Raz'r]

I've seen the future of money and everyone will be much smarter if we just regulate!

Bank runs are bank runs. There is a reason banks are regulated. You want to act as a depository, promise risk free income? Hmmm, there is a name for those institutions.

 

[Pertinacious Tom]

Tornado Tainted Ether would be a good name for a rock band.

...
By the end of 2021, according to the industry tracking service Chainalysis, global adoption of crypto had "grown by over 2300% since Q3 2019 and over 881% in the last year." Institutional investors in 2021 traded $1.14 trillion worth of cryptocurrencies on the leading exchange Coinbase alone. Digital currency commercials so dominated the 2022 Super Bowl that advertising insiders dubbed it the "Crypto Bowl." And while the market capitalization of the crypto space plummeted to $957 billion as of early October 2022, down from a $2.8 trillion high in November 2021, that's still nearly triple the value at the start of October 2020.


The industry has grown too big for governments to ignore. In August 2022, the U.S. Treasury Department's Office of Foreign Asset Control (OFAC) made it a crime for any American to receive or send money using digital addresses associated with Tornado Cash, a crypto "tumbling" service that pools both source-identifiable and fully anonymous cryptocurrency together in order to make it harder to forensically trace ownership of particular virtual currency from sender to eventual recipient. Tornado Cash, the government claimed, had illegally laundered more than $7 billion, some of it stolen.


In response, pranksters began sending tiny bits of the digital currency ether to many prominent figures via Tornado Cash addresses, to hit home the absurdity of treating the mere interaction with a service as a crime. (The U.S. Treasury did trouble itself to say it would not go after mere recipients of Tornado-tainted ether.)

This wasn't the first time OFAC had made interacting with such a tumbler illegal for Americans, but Tornado Cash's distinct nature raises unique questions about the government's claimed power over increasingly sophisticated crypto markets and the sometimes autonomous software that such markets have come to use.

While some tumblers are essentially custodial entities with actual human beings controlling the exchange of digital currency tokens, Tornado Cash uses "smart contracts," a form of self-executing code. This kind of decentralized finance (DeFi) usually involves ethereum (the second-largest cryptocurrency per market capitalization), which was designed to enable the development of decentralized apps on top of a blockchain. Some of the addresses that OFAC sanctioned were code, untethered to individual people.

Because of this architecture, explain Jerry Brito and Peter Van Valkenburgh in an August 2022 paper for the crypto-focused think tank Coin Center, the people who created the "Tornado Cash Entity" have "zero control over the [Tornado Cash] Application today" and "can't choose whether the Tornado Cash Application engages in mixing or not, and…can't choose which 'customers' to take and which to reject." This implies that there is no actual individual who should be legitimately punishable for whatever specific crimes the app might be thought to have facilitated.

Potential First Amendment implications arise from the difference between a human provider and a blockchain-enabled piece of software. If OFAC can bar citizens from using "an ever expanding list of specific open source protocols and applications that are 'blocked,'" Brito and Van Valkenburgh ask, "then isn't that a restriction on the publication of speech?"

"Merely blocking one application is not the intent," the Coin Center authors argue. "The intent is to send a message that any example of this software is to be avoided…to chill speech such that Americans not only avoid interacting with these specific contract addresses, but avoid interacting with any protocol that is substantially similar to the code in those addresses. It's a ban not just on a specific application, but on a class of technology."

This interpretation is supported by an unnamed Treasury official, who told the Financial Times in August 2022 that the department "believe this action will send a really critical message to the private sector about the risks associated with mixers writ large" and that the crackdown was "designed to inhibit Tornado Cash or any sort of reconstituted versions of it to continue to operate." In September 2022, Coinbase bankrolled a legal challenge to the Tornado Cash ban.
...

So I guess code-generated addresses, much like corporations, are people too?

 

[Raz'r]

To the OP, money is money. Blockchain-based tokens are many thing, but not money.

 

[Steam Flyer]

To the OP, money is money. Blockchain-based tokens are many thing, but not money.

Disagree. It's money if people accept it as money in payment for goods/services. But it's not very good money. Turns out that being TOTALLY UNREGULATED (yay libertarianisticalism!) is actually a bug not a feature.

 

[Raz'r]

Disagree. It's money if people accept it as money in payment for goods/services. But it's not very good money. Turns out that being TOTALLY UNREGULATED (yay libertarianisticalism!) is actually a bug not a feature.

Nope, barter does not equate to money. Blockchain is barter at best. As to regulation, hammering institutions like FTX for fraud is a good start.

 

[Pertinacious Tom]

Is crypto about to go extinct?

...
On one of American television’s biggest nights, with 99 million viewers, the Super Bowl broadcast was punctuated by a series of cryptocurrency advertisements. Social media buzzed with talk of how digital tokens had come of age as they grabbed primetime slots previously dominated by mainstream giants like Coca-Cola and General Motors.

One of the advertisements that night had comedian Larry David playing a Luddite dismissing humankind’s biggest inventions – from the wheel to Edison’s lightbulb to, the commercial suggests, the FTX cryptocurrency exchange. Told that the platform is a “safe and easy way to get into crypto”, David’s character says: “Ehhh, I don’t think so – and I’m never wrong about this stuff.”

That advertisement hasn’t aged well.
...

Some experts, like Allen at American University, believe that crypto has little to meaningfully offer to the financial world in the future. “When you peel away the rhetoric, there really isn’t anything there that you can’t do using traditional finance instruments,” she said.

Others remain convinced that crypto, with its potential to enable peer-to-peer, decentralised financial exchanges, represents a transformational technology. “The technology is here to stay, even if a number of the initial projects in the crypto space are falling,” MIT’s Catalini said.

He described the moment as similar to the dot-com bubble that burst in the late 1990s when many early online firms went bust. Those – like Amazon – that survived or came up later are among “the internet giants of today”, he said.

Still, until the dust settles and reliable regulations come in, Leung at the University of Washington said it’s best to be cautious. “You don’t want to make decisions based on Super Bowl commercials,” he said. “This isn’t a game.”

Even if they hire Larry David?

 

[Voyageur]

This 'Cryptoqueen' scammed investors out of $4 billion, the FBI says. Then she boarded a plane and disappeared | CNN Business

Ruja Ignatova launched her cryptocurrency OneCoin with bold statements like, "In two years, nobody will speak about bitcoin anymore." Investors around the world flooded her with cash, but as OneCoin collapsed under criminal investigations, she boarded a flight to Greece and vanished.

www.cnn.com

 

[Pertinacious Tom]

Operation Choke Point 2.0 Is Underway, And Crypto Is In Its Crosshairs

...
practically speaking, labeling crypto-facing banks “high risk” has four direct effects: it gives them a higher premium with the FDIC, they face a lower cap rate with the Fed (which inhibits their ability to overdraw), they face restrictions on other business activities, and management risks a poor examination score with their regulatory supervisors, which inhibits their ability to do M&A. So while some analysts like Wilson Sonsini’s Jess Cheng have pointed out, somewhat optimistically, that banks are not explicitly barred from providing crypto custody or onboarding crypto clients, they still stand to get labeled high risk — and face serious business hurdles as a result.

Some might be sympathetic to regulators’ attempts to insulate the banking system from the vicissitudes of the crypto space. But thus far, crypto’s various disasters haven’t produced any meaningful contagion. The industry had a full-blown credit crisis in 2022, with virtually every major lender going bankrupt, but the damage was contained. The worst fallout in the banking space was suffered by Silvergate, which suffered an $8b drawdown, but survived. No onshore, fiat-backed stablecoin suffered any meaningful adverse effects, despite the massive crypto selloff in 2021 and 2022. They functioned as intended. And no contagion spilled into traditional finance via mass selling of Treasuries, something officials have historically felt might be a key transmission channel.

As Biden enters the second half of his term, his crackdown on crypto banking has deflated hopes for a regulatory rapprochement in the US.
...

Nice little bank you got there. Be a shame if something happened to it...

 

[Olsonist]

This 'Cryptoqueen' scammed investors out of $4 billion, the FBI says. Then she boarded a plane and disappeared | CNN Business

Ruja Ignatova launched her cryptocurrency OneCoin with bold statements like, "In two years, nobody will speak about bitcoin anymore." Investors around the world flooded her with cash, but as OneCoin collapsed under criminal investigations, she boarded a flight to Greece and vanished.

www.cnn.com

Nice little bank you had there. 'Twas a shame something happened to it...

 

[Steam Flyer]

This 'Cryptoqueen' scammed investors out of $4 billion, the FBI says. Then she boarded a plane and disappeared | CNN Business ​

Ruja Ignatova launched her cryptocurrency OneCoin with bold statements like, "In two years, nobody will speak about bitcoin anymore." Investors around the world flooded her with cash, but as OneCoin collapsed under criminal investigations, she boarded a flight to Greece and vanished.

www.cnn.com

Nice little bank you had there. 'Twas a shame something happened to it...

So, where are the Libertarians applauding the lack of government oversight?

 

[MR.CLEAN]

another george santos-in-drag lookalike

 

[Olsonist]

Proud Boys leaders were crypto nutheads. Who'd a thunk?

Girlfriend of Proud Boys leader pleaded fifth about plan to occupy government buildings

Prosecutors’ unsuccessful effort to glean information from Erika Flores stands in contrast to the Jan. 6 select committee.

www.politico.com