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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.

      2 replies →

  • 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.

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.

      4 replies →

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.