Comment by jmyeet
4 months ago
The other side of this coin is all the companies and infrastructure that has popped up, which intentionally or not enables the laundering of ill-gotten cryptocurrency [1].
I have a hard time feeling sympathy here because I consider cryptocurrency to be fundamentally silly. Reversible transactions of fiat currency transactions is a feature not a bug.
I feel like securing something like this is practically impossible. There's always the risk of a bad actor who introduces malware for a small fee.
[1]: https://www.chainalysis.com/blog/2024-crypto-money-launderin...
Reversible transactions is a feature for fiat money
Reversible transactions would generally be a bug regarding cash & hard assets of which cryptocurrency is trying to imitate.
Crypto has reversible transactions when both parties agree to use that functionality in advance (well, the reasonably programmable ones do, anyway)
It's not a bug if both parties give consent, which sounds like a wonderful way to transact, to me!
But, when you REALLY want reversibility is when the transaction is done without your consent — when stuff is stolen and you want it back.
Thieves will not tend to consent to reversible transactions.
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it can still be still hard to reverse fiat even if easier than crypto. try disputing a wire. this is why you should always use a credit card, preferably Amex, for purchases-tons of buyer protection.
1.5 billion in cash would not disappear this easy. You would need trucks to even transport it.
Indeed. If you sell a suitcase of cocaine, you need to launder two suitcases of cash.
Reversibility is a trade-off. It's great if you are on the sending end of a transaction. It can be a nightmare on the receiving end. Irreversibility is the other way around. And both approaches have different costs and assumptions.
I think it’s less about reversibility itself and more the larger system within which it works. Banking works because the companies agree to follow rules so there’s a social context where if I make a mistake you will help fix it because the odds are fair that you will make a mistake at some point, too. In contrast, cryptocurrency is a political movement so the ideological “trust less” purity test matters more than whether the system is actually used. There is no technical reason why a system couldn’t have something like a settlement period to allow fraud reversal.
A settlement period wouldn't even run against the ideology, only the convenience factor (and implementation complexity, and perhaps transaction fees). More generally, I think a number of the issues with crypto are rooted in things happening immediately.
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bank error in your favor
Is cash silly? It has the same property (non-reversibility)
> Is cash silly?
No, of course not.
Adjusting your comment for the situation: > Is $100.00 in cash silly? It has the same property (non-reversibility)
No, not silly if that's what I am comfortable to keep on me (wallet, mattress, etc) and I'm mugged/robbed most people will recover. (Especially if you're also able to afford the inherent risk of crypto.)
> Is $1,500,000,000.00 in cash silly? It has the same property (non-reversibility)
YES! And probably a challenge for most humans even if you're able to get that cash in the limited US $100,000.00 bill [1] - that's 15,000 green slips of paper. (I'm making a bold assumption that this link [2] is reasonably actually for the physical scale, though this apparently only shows 13,000 not the 15,000 needed.)
They effectively treated the $1.5B like a pile of cash in a fence with a few (easily pickable apparently) locks keeping it shut.
That SHOULD have been in a 100% offline, air gapped system with multiple levels of 2+ person approvals to access.
But this failure implies to me that even THEY didn't really consider the crypto assets they were holding as something with a real value either.
1- https://en.m.wikipedia.org/wiki/United_States_one-hundred-th...
2- https://www.reddit.com/r/pics/s/GHNABiJh6A
I just want to piggyback off this and discuss the scale in terms of the largest most readily accessible bill, the $100 bill. The relevant parts are [1]:
- Height: 66.3mm
- Width: 156mm
- Thickness: 0.0043 inches = 0.11mm
- Weight: 1.0g
So the volume is 1138mm3. You need 15M notes so that's just over 17 cubic meters or approximately 603 cubic feet, which is a cube roughly 2.6 meters (8.5 feet) on each side, weighing in at 15 metric tons or 33,000 pounds. Put another way, that's over half the volume of a standard twenty foot shipping container (~1100 cubic feet).
But let's get it more compact. The current gold price seems to be about $2939 per Troy ounce, which is 31.1035g. You need 510,378 Troy ounces, which is actually heavier at 15.87 metric tons but way more compact. Given a density of 19.32g/cm3 that's 822,000cm3 or 0.822 cubic meters or 29 cubic feet.
Whatever the case, it's a lot less practical to steal.
[1]: https://en.wikipedia.org/wiki/United_States_one-hundred-doll...
Orders of magnitude matter, and you have to look at the overall system. You can’t move $1.5B in cash without a fleet of trucks and a lot of time, and serious banking has lots of safeguards around it to prevent thefts by requiring more people to cooperate on an insider theft.
Cryptocurrency was designed as a political statement rather than a serious banking system so you effectively have the same level of precaution for both large and small amounts, akin to a bank keeping a billion dollars in the teller’s tray.
It’s also impossible to steal from afar and transactions of $100/$1000000/$1000000000 each look very different.
Crypto is like having a $1.5 billion bill.
Keeping $1.5 billion in cash is silly.