Comment by gloryless
4 years ago
It's pathetic that regulators haven't stopped this nonsense. These scams don't even last 6 months anymore, it's a joke
4 years ago
It's pathetic that regulators haven't stopped this nonsense. These scams don't even last 6 months anymore, it's a joke
It's pathetic that the U.S. Federal Reserve and Treasury allowed anyone but the U.S. Government to mint a coin 'tethered' to USD, and named anything remotely similar. It's bizarre and a complete reversal from prior practice.
IMO letting crypto die by itself is the best way to prove it sucks.
If any blockchain was forbidden, there would be a huge PR stress and infinite arguments about their viabilities.
Just let morons fail.
Yep. Too many regulators have been on the trail of Tether and its ilk for too long for any of what's about to come to take them by surprise. Crypto being strangled in the crib by regulators makes them look like exactly the villains all the crypto advocates portray them as. Crypto being detonated by a huge number of blatant Ponzi schemes, on the other hand, is nothing but upside for the regulators.
Tether may also have been allowed to proceed as a sort of test bed for the CBDCs which seem to be on the agenda. Now the narrative can be "the public has already demonstrated strong demand for USD-type cryptocurrencies, we just need to supply an official version."
Plenty of countries have currencies which have a fixed exchange with USD, including my own (1 KYD = 1.2 USD).
It just takes a shit-tonne of capital, and it helps to have a functioning internal economy and flexibility to be able to defend against malicious agents.
I suspect there are other legal issues with creating an alternative currency in the us though, which is why these aren't currencies but securities. Which is still fine! A tethered coin is conceptually _similar_ to a 0-yield bond.
Presenting it as being "safe" without it actually being so is the problem here.
It’s trivial to mint tokens that are on a fixed rate to USD - assuming you are ready to keep the full amount of USD locked up somewhere.
Disaster strikes when someone sees the mountain of money and thinks ”If we invest this money, we get to keep the gains”
1 reply →
As long as someone pays for cryptocurrency somewhere in the world, you will be able to algorithmically mint a coin tethered to USD or any other asset, and there is absolutely nothing the US Government or anyone else can do to stop it. The Pandora's Box is open.
That’s … what banks and credit card companies do all the time. The only true dollars are physical cash and accounts at the Federal reserve. Everything else is a derivative pegged to those.
You mean like Disney Dollars?
Only if they were called USDD.
Let's be clear: YC needs to quit financing ponzi scams. Or better yet, be punished for it.
Yawn, brand new account, take this virtue signaling back to reddit and give me a break: YC can invest in whatever they want to, it's their money. Stablecoin farming may not be sustainable, but it's not a Ponzi scheme, unless you have no idea how a Ponzi actually works.
The thing is that a Stablecoin is either stable, and provides no returns, or it's volatile, and provides 15% returns. You can't have a stablegain that continually goes up in price, that's not stable then!
Stablegains, by their own admission, only invested in stablecoins: https://stablegains.zendesk.com/hc/en-us/articles/4402687671...
> We do not engage in speculation on the prices of volatile cryptocurrencies like Bitcoin or Ether. We only offer deposits in stablecoins whose value is pegged to one dollar.
> Regardless if crypto markets are soaring or crashing, the value of assets under our management remains stable.
This is hypocritical on its face. You can't have any returns if the assets are stable!
Sure, YC can do whatever they want with its money, but we can all be very disappointed and sad that VC funds are engaging with any of this. YC has been slowly been losing their image for years now, along with the other VC firms, and this just cements it for me.
1 reply →
farming is literally a ponzi
https://m.youtube.com/watch?v=C6nAxiym9oc
The shorter the term the harder I would imagine it to be for regulators to act.
Governments tend to do things at their own pace.
> It's pathetic that regulators haven't stopped this nonsense.
As a result of the ICO scams in 2017 for example the infamous Ethereum DAO hack, perhaps that is why at least in the US, the SEC banned unregistered ICOs [0]; more countries to follow.
They have done 'something' about it, but it is not going to 'completely' stop otherwise they would have 'totally' banned all of them, including even registering an ICO with the SEC.
I won't be surprised to see stable-coin regulations this year with only a few of them still surviving.
[0] https://www.whitecase.com/publications/alert/regulation-init...
nowadays they don’t even do ICOs
find a VC who’d buy coins at low prices and then dump into public by placing on Coinbase/Binance
spend that VC cash on marketing
All crypto is a scam and it's so simple to see, it's astonishing anyone fell for this.
Look.
Imagine an otherwise empty room with a table and a few chairs. A couple people come in with some money in their pockets and cards. They play a few round of a card game, some lose, some win. When they leave, the room as it was before so it is crystal clear the sum of their money couldn't change. Some won, some lost but overall the change is zero. This still doesn't change if, for convenience, during the game, they use plastic chips to count wins and losses and at the end they exchange it for money.
But if someone takes a small cut every time the plastic chips move then that person is guaranteed to win and everyone else together is guaranteed to lose. Now, a game where, without knowing anything about the game you can tell ahead of the time which group wins and which one loses is not a game, it's a scam.
Indeed, one of the best moves for players is not to play the game but to sell their chips -- and praise the game to increase the chance of a greater fool buying in. Those will sit on a greater loss than you did which might not materialize yet but it's certainly in the system.
So, any crypto"currency" with transaction fees is a scam. Those who collect transaction fees are guaranteed to win and the rest are guaranteed to lose.
And no, stocks aren't like this because they produce dividend. And no, gold is not like this either because there are uses of gold which transform your gold into higher value products than raw gold (integrated circuits, jewelry) which sell for real money. Neither can happen with crypto"currencies", there the only interfacing with real money is exchange.
> Imagine an otherwise empty room with a table and a few chairs. A couple people come in with some money in their pockets and cards. They play a few round of a card game, some lose, some win. When they leave, the room as it was before so it is crystal clear the sum of their money couldn't change. Some won, some lost but overall the change is zero. This still doesn't change if, for convenience, during the game, they use plastic chips to count wins and losses and at the end they exchange it for money.
Does this not describe CC fees/taxes/online marketplaces/etc? Or is your argument all those are scams as well?
I agree crypto projects are generally a scam but I fully disagree the reason for that is transaction fees (which I assume is what you're alluding to here as the "small cut").
>Does this not describe CC fees/taxes/online marketplaces/etc?
No, because CCs exchange dollars and the dollars themselves are not worthless (or, rather are given worth via a nuclear arsenal).
The coins themselves are worthless, but accrue "fees" in fiat (ex. when you exchange USD for UST).
3 replies →
If you don’t think there is fundamental value in permissionless, uncensorable, peer-to-peer online money transfer that is not controlled by any government or any single entity at all then nothing anyone can say will be able to convince you otherwise.
Notice how what I just described does not match the vast majority of these “crypto” projects. That is because they are not crypto. They do not adhere to the ethos of crypto. They are scams. It’s very simple really. If there’s a company behind it, if there’s an ICO, if there’s a single identifiable leader which can be attacked by governments to bring the project down, then it is a scam.
Unfortunately some time in the mid-2010’s the scammers and grifters of traditional finance moved in and started playing all the same games that got regulated out of existence in the legacy markets. They will likely get regulated out of existence again in the crypto world and people like you will gloat about how it’s the end for crypto. But the real crypto projects, Bitcoin, Monero, etc. will keep chugging along and there is absolutely nothing that can stop them.
It's not money transfer. It's crypto"currency" transfer. See my comment on this thread elsewhere https://news.ycombinator.com/item?id=31462909
My imaginary investcoin [1] is not a scam though. It is backed by stocks and its value comes from the growth of stock market and from being usable as a decentralized mean of payment.
[1] https://news.ycombinator.com/item?id=31463825
Only about 8% of the gold demand is from technology. The rest is used a speculation and for luxury goods which are only valuable because you expect someone to pay an equal amount of money or more than you did.
“Gold has two major shortcomings in that it is neither of much use nor productive. While gold does have some industrial and decorative purpose, the demand for these purposes is limited and unable to absorb the amount of new gold being mined. And if you own an ounce of gold for eternity, you still end up owning an ounce.” - Buffet
https://www.statista.com/statistics/299609/gold-demand-by-in...
Sounds like you're describing the Visa/Mastercard duopoly that charges high interchange fees to merchants so they can bankroll their own rewards programs.
But what about crypto completely revolutionizing transactions, decentralizing the economy and providing a stable universally accessible data exchange medium? What about tracking the food you buy on the blockchain? What about web3? What about muh NFT monkeys?
What about flying cars and hoverboards? I’m sure those have been pitched to the public too. Making a claim does not make a truth.
Some cryptos do have real-world benefits - https://investmentu.com/santos-crypto/
Crypto is a tool.
Is it often used for scam? Yes. But so is email.
Just like stocks can fall 99% in a day. It stock s cam? No.
The problem is that users dive into it without understanding the risks. Also, there should be (and will be) more regulations around it.
But it is as far from the scam as it gets.
You’re right, it’s not always a scam. Sometimes it’s just useless.
> The problem is that users dive into it without understanding the risks. Also, there should be (and will be) more regulations around it.
Correct. Only a few cryptocurrency projects will survive and the several meme cryptocurrencies or non-compliant coins will wither away.
This is why some companies waited for regulatory clarity to enter back into the cryptocurrency markets. This is what the absolutist crypto-skeptics or absolutist crypto-maximalists won't tell you.
If I buy a share of a company, I own it. Buy enough of it, I can control it. Same can not be said for crypto. If I buy a token of BTC it guarantees me no voting rights, no shareholder rights, no FDIC insurance, no insurance whatsoever. When comparing investment instruments, crypto is the worst of all of them, including timeshares.
2 replies →
> All crypto is a scam and it's so simple to see, it's astonishing anyone fell for this.
No, it is not.
Please try to set aside your hatred for all things crypto and understand that there is actual legitimate value in many of the crypto projects, and that the core proposition, that of decentralized peer to peer value transfer, is a legitimate and useful use case.
> decentralized peer to peer value transfer, is a legitimate and useful use case.
I would contest even this. People don't want to transfer "value" they want to transfer money, now to use, say, Bitcoin to transfer money you need to do the following steps:
1. Buy Bitcoin. Let's presume you are already set up with an exchange for this so all you need to do is transfer your money some way to the exchange.
2. Transfer Bitcoin and pay the transaction fee.
3. The receiver wants money. So let's again presume -- despite this is a much shakier presumption -- they are already set up with an exchange then they need to exchange Bitcoin to real money and transfer their money from the exchange to their bank account. I am not mentioning here if they tarry then the exchange rate in #1 and #3 differs -- that could be automated although as far as I am aware there's no service which currently does it.
Turns out the challenge is not #2 but the bank transfers in #1 and #3: integrating with every national banking system in the world. Wise (nee Transferwise) shows this can be done without Bitcoin, creating transparency and predictable fees.
This does not mention the criminal aspects of Bitcoin, I am focusing just on the transfer aspect.
1 reply →
There's no transfer of "value". There's a transfer of a ledger entry saying wallet 0xBA11C0CS has 1 unit of fantasy money. That ledger entry only has value to other people playing the fantasy money game.
Unless someone with vast capital assets is willing to accept units of fantasy money in trade for those assets, it has no real value besides hucksters finding Greater Fools.
Worse than cryptocurrency being fantasy money, it literally wastes an Argentina worth of power (and growing) every year. I doubt the entire global financial industry, including all mainframes, office buildings, corporate jets, and commuting workers uses even one Argentina with of power in a year. And the global financial industry is doing billions upon billions of transactions for trillions upon trillions of dollars.