The Future Of Money

veni vidi vici

Omne quod audimus est opinio, non res. Omnia videm
5,909
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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

Disgusting Liberal Elitist
30,042
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New Oak City
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!

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

 

BeSafe

Super Anarchist
8,121
1,363


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

Importunate Member
62,906
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Punta Gorda FL
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?
 

Steam Flyer

Sophisticated Yet Humble
45,586
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Eastern NC
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

Super Anarchist
63,141
5,852
De Nile
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

Importunate Member
62,906
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Punta Gorda FL
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?
 


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