Comment by zer0x4d
4 months ago
I'm a huge crypto believer but I can admit that we don't have a serious system if a person can just transfer over $1.5B from a well known crypto cold wallet to different accounts with nothing flagging it and no way to reverse it.
In the face of the never-ending list of these kinds of events, the laughably impossible task of average nontechnical individuals protecting their own assets (and the consequence of total financial ruin when they fail to do so), the overwhelming number of and size of scams, rug pulls, fraud, outright Ponzi schemes, and on and on and on… what exactly is left to keep anyone a “huge believer”?
Put differently, it’s been seventeen years of constant and escalating mayhem. What would finally be enough to shake your faith?
> what exactly is left to keep anyone a “huge believer”?
I don't really engage in the ponzibucks part and don't touch exchanges except to on and off-ramp, and use crypto to pay for things like hosting, seedboxes, or other services I might not necessarily want my debit card directly attached to.
I like sending vendors $100 and spending $0.00005 in transaction fees and knowing that they'll get $100 (or $99 with some 3rd party integration like Coinbase Commerce) versus spending $100, of which Stripe gets $5 of and the vendor only sees ~$95 if I don't feel like I need the protections of a card, which is frequent but not all the time.
Crypto fits a niche in my life well, despite the wider crypto world having dumb controversies. Just like my HSBC bank account fits a niche well, despite HSBC's wikipedia page being ~50% controversy section by word count.
Your transfer fees are a bit off.
Coinbase is 10,200x more than you stated ($0.51 to send $100) BUT that’s only if I send directly on Coinbase. Coinbase Commerce takes 1% so it would actually be 20,000x more than you listed.
Stripe is 64% of what you stated ($3.20), and that’s with no processing fee discounts like you can get with higher volume.
Now, obviously, $3.20 > $1 but it’s not apples to apples. You can claw back your money with a card for one. there are many cases where I would prefer to pay the extra $2.20.
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> What would finally be enough to shake your faith?
Permanent and major market crashes is the only thing I can think of .
After the last crash a lot of fraud and incompetence got out because they couldn’t stay solvent, stuff like Celsius or FTX etc got exposed only because of the crash we had in 21/22.
It will take a few crashes, like that, until then scams or incompetence like this incident will not make people loose their money.
Few crashes, then most believers will loose their savings then the faith will shatter not until then.
Most people are after all investing in crypto because it goes up and not because they believe in decentralized currencies. As long as they hear how someone is making money on crypto they will keep believing no matter how many meme coins pull the rug, or exchanges fail or pig butchering or myriad of other scams come to light
> what exactly is left to keep anyone a “huge believer”?
Bias. I expect believers to have earned a profit or still hold significant quantities of crypto assets.
But in their favor, trust in any currency is the foundation of its value. States create it by collecting taxes and paying employees. Crypto currencies generally lack that heavy weight central authority, so they kind of have to believe to the point where they get burned.
> What would finally be enough to shake your faith?
Crypto scams run by top government officials? Oh, wait...
and the existence of financial scams isn't the same for fiat because...?
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Maybe when it stops escalating and getting bigger and bigger and continually growing over time?
Movement of funds from one sovereign nation's jurisdiction to another is important when one jurisdiction is in crisis or restricting capital flows.
They've seen other people make loads of money (or maybe made a load themselves) and are still in the game hoping to make loads more.
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My faith would shake when scams, rugs, fraud, and ponzis completely stop outside of crypto.
The "oh but there's crime in fiat" argument holds no water.
Sure, HSBC facilitated money laundering and drug trafficking in Mexico. And when it came out, the fiat response was a huge outcry and putting a stop to it.
The crypto response is to say "screw the laws, let's go all in with money laundering and drug trafficking".
It's like noticing that kitchen knives are occasionally used for murder, and then concluding that it's a good idea to sell machine guns at every corner.
Fiat is indispensable, and (due to regulation) better for legitimate purposes than for crime.
Crypto is entirely dispensable, and (due to its inherent limitations (inefficient, slow, cumbersome)) better for crime than legitimate purposes.
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In 17 years, USD holders got hacked for 65% of their money (based on gold, or eggs, prices). At the same time, btc holders ... you know.
In 17 years, the value of my traditionally-invested assets (VTSAX) went up 700%.
I didn’t risk losing everything to scams. When I forgot my password my brokerage was able to restore my access. When I made a mistake in a transaction I was able to call them and sort it out.
Meanwhile, despite the incredible runup of BTC I know precisely zero Bitcoin billionaires. I know people who have theoretical fortunes on hard drives that have died. I know people who mistimed purchases and sales and who’ve perhaps turned a small profit. I know people who turned a large profit and then lost it all to malware or exchange failure.
So yeah, I do know what happened to the BTC holders.
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You like decentralized money without laws and accountability, but would like to have a central thing (TBD) that is accountable and respect laws? How would that work?
I'm not too sure but few things come to mind:
1. Upgrade protocol to include protections for well known cold wallets held by exchanges (ex: API call has to be made to the exchange's security endpoint to validate each transaction out of the wallet. Exchange staff would need to manually allowlist large transactions before they are transmitted).
2. Decentralized voting on reversal of transactions (90-95%+ vote needed to reverse to avoid 51% attacks)
This is getting pretty close to the banking system, at which point one needs to ask - maybe just improve existing protocols?
> 2. Decentralized voting on reversal of transactions (90-95%+ vote needed to reverse to avoid 51% attacks)
Couldn't you technically just 'git checkout' a previous commit from before the fraudulent transaction occurred and pretend it never happened? Isn't the real problem that you'd have to convince a majority of users to do the same?
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Ethereum is programmable, such a protocol can be implemented as a smart contract.
Not going to work, otherwise it would already have been done.
People who control or take advantage of cryptocurrency don't want this to happen.
Good luck getting 90% of a large group of people to vote the sky is blue.
I think the move is less having a central thing and more advancing wallet and multisig technology. ByBit was pretty reckless by using a simple majority multisig to hold $1.5b. At that level you should probably have a few speed bumps. Like, maybe a majority of signatures allows you to make a proposal, but you can only accept the proposal after a couple hours, which would give you the chance to see the malicious transaction and bail on it.
Something like that would probably be overkill for individuals, but most people would definitely benefit from some added on chain bureaucracy regarding how their accounts are managed. And yes, for many this would lead to a system that isn't notably less centralized than the traditional banking system. But people would at least have a choice as to where their wallets gets to sit on the bureaucracy <> complete freedom spectrum. And even if they end up closer to the bureaucracy end, they'd have a lot more flexibility and lower administrative fees than what they currently have.
> let's reinvent the banking system except worse in every way
Right on. My bank calls me every time I send money out. And I'm talking like $50. I used to find it annoying, but now I'm blown away every financial system doesn't...
On the one hand, I understand banks attempting to protect customers and limit liability, on the other hand, frankly I have better things to do with my time than spend 30 minutes waiting in a phone queue because I had the audacity to go on holiday and attempt to spend $20 on ice cream.
Those all sound like stated objectives of crypto.
Code is law, no?
Solutions have existed for years (eg Gnosis Safe), they just aren’t being used by that exchange.
Bybit was quite literally using Gnosis Safe for the compromised wallet.
I can't believe someone posted that without knowing they actually used Gnosis Safe
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lol. Good times.
Can’t tell if you’re trolling here or not, but good one either way!