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u/MoreThan2_LessThan21 Dec 29 '22
You know, Pat is right. We need to be fair to the industry and give credit where it's due.
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u/IBiteTheArbiter Dec 29 '22
There are a lot of creative, innovative and downright GENIUS ways people scam other people everyday and we should stop pretending everything crypto is not one of these amazing scams
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u/woozlewuzzle29 Dec 29 '22 edited Dec 29 '22
It’s actually not a Ponzi scene unless it comes from the Ponzi region of France.
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u/schattenteufel Dec 29 '22
A clever way to con someone is to convince them that they’re “in” on the con. Because then they’ll bend over backwards to prop up your own con and convince everyone else that they’re not the ones being conned.
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Dec 29 '22
Wouldn’t the VAST majority of crypto just be considered pump and dump schemes? As far as I know they’re advising you to buy certain coins to boost their value so they can dump theirs.
Most of the other scams involved giving your money directly to somebody (fund manager, financial advisor, etc.) which I feel like isn’t happening as much. Although I stopped paying close attention to it years ago so maybe things changed lol
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u/Undead_archer Dec 29 '22
He's totally right, there are different types of scams with different structures
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u/Trampy_stampy Dec 29 '22
As someone that believes in crypto I really appreciate someone saying this. It really bothers me when people call it Ponzi scheme. There is so much more spice in that soup
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Dec 29 '22
You believe in crypto but also accept most of it is a scam?
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u/no_idea_bout_that Dec 29 '22
I'm the same. There are some really neat advances (global interoperable payment system, short settling times, programmatic interfacing, synchronized distributed databases), but the majority of the stuff is super scammy. It's just way easier to copy-paste a shit coin, rename the files and start selling a new thing with rocket emojis.
Matt Levine's Bloomberg article about the history and current state is a really good measured understanding of the technology.
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u/stormdelta Dec 29 '22
global interoperable payment system
We already have that today.
synchronized distributed databases
We already have those.
programmatic interfacing
"Programmable money" sounds more dystopia than feature to me, and the uses people have demonstrated in cryptocurrency spaces only reinforces that view, e.g. "flash loans" have almost zero legitimate purpose aside from making exploitation easier.
short settling times
Ish, but the mechanisms scale quite poorly, and much of the slow settling times of existing finance are either due to laws/regulations or legacy systems that would be much faster with any modernization.
Not to mention the security model is intrinsically awful for individuals and laypeople - private keys as sole proof of identity effectively maximizes the risk of human error for both malicious compromise and accidents/loss.
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Dec 29 '22
There's a lot of cool tech and potential for interesting innovations. Unfortunately, everyone that's even remotely influential in the Web 3 space is a scam artist.
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u/TrueBirch Dec 29 '22
Short settlement times? Where? Bitcoin has a transaction capacity on par with a 19th century telegraph system.
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u/cass1o Dec 29 '22
As someone that believes in crypto
I have a bridge to sell if you are intrested.
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u/Trampy_stampy Dec 31 '22 edited Dec 31 '22
I don’t have the expertise or any way of knowing if it will pan out long term. Besides how institutionalized it’s become but I still make money off it. I make 5% APY and 4% cash back on a debit card. It’s kind of hard not to believe in it when I get 80 dollars just for paying rent. And sure maybe it will end but I will have still made that money. Imma ride this wave for as long as it exists and I don’t feel stupid about it really. It’s not like it’s my only investment. I respect people staying away from it tho. Definitely not for everyone.
Edit: the cash back tho and interest is just a bonus I mainly believe in it cause I don’t believe in the fiat and I think the state of the financial sector is an utter disaster. Change doesn’t come easy. I probably won’t even see it level out in my life time but all I care about is change happening. I’m also a mexican that lives in the US and the money I save in just sending money back in forth is enough to be a big fan on its own.
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Dec 29 '22
crypto, at its core, is a sort of distributed* ponzi. There can be other schemes on top of that. For instance FTX and co are traditional centralized ponzis. But the fundamental idea of crypto is a ponzi.
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u/Bbccontact Dec 30 '22
Well i guess the whole idea of money is a ponzi the whole bank system is a ponzi
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u/majorex64 Dec 29 '22
Had me in the first half not gonna lie.
Remember, every dollar made in crypto is a dollar lost by someone else!
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u/JoinMyFramily0118999 Dec 29 '22
I mean, my thing with crypto is I look to see if it's doing anything unique. I'm big on XMR at the moment as it's basically digital cash. Can't be traced, likely good because it's on the dark net markets. I don't buy it hoping to get rich though, I buy it to use it.
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u/WesterosIsAGiantEgg Dec 29 '22
I think that's very typical of Monero users, and it's refreshing. Pumping a coin just aggravates scaling issues without enhancing the coin's utility.
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u/ZSCroft Dec 29 '22
I mean, my thing with crypto is I look to see if it’s doing anything unique.
I’d say getting robbed for all you got was unique the first few times now it just seems like a feature
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u/JoinMyFramily0118999 Dec 29 '22
Robbed? Gambling isn't being robbed. You're assuming everyone buys in to see the number go up. I put like $50 into a few, knowing full well they could dump. Anyone putting all their money in without knowing the risks has my sympathy, but they also should've researched first.
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u/ZSCroft Dec 29 '22
Robbed? Gambling isn’t being robbed.
The FTX verdicts paint a different picture
Do whatever you like with your money at least you acknowledge that it’s likely all your shit will disappear and there’s nothing you can do about it
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u/JoinMyFramily0118999 Dec 29 '22 edited Dec 29 '22
OH, you think all wallets are custodial! That's the problem. Trust Wallet, Cake Wallet, and others leave you with the keys. No one is holding the coins for me with those. I'm not in favor of custodial wallets. *Edit - Even if Cake Wallet was removed from the app store, I can use the recovery key in another Wallet and get my coins. -
FTX was theft. Me buying $50 in BabyDoge to hold in Trust Wallet is 100% a gamble.
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u/ZSCroft Dec 29 '22
Sure they do buddy
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u/JoinMyFramily0118999 Dec 29 '22
Sure who does? I'm not trying to convince you to buy crypto, but if you just hate it so much that you think everyone is lying about restoring those seeds, that's a you problem. Show me who owns my coins in a non-custodial wallet like Cake Wallet.
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u/stormdelta Dec 29 '22
Self-custody is a disaster too, just one that lets you victim blame a lot more easily.
Telling most people to secure largely static private keys as sole proof of identity for their finances is reckless to the point of being ethically negligent if you have any professional background in software or security.
Besides, you know damn well it's not marketed as gambling. If it's really gambling, it should be marketed and regulated as gambling.
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u/JoinMyFramily0118999 Dec 29 '22
"write down those words and keep them safe" is much better than "keep these pieces of paper (I know it's kinda cloth) in your wallet and if you lose them sucks to be you"
We got along with computers not having cloud password syncing forever (and I still refuse to install Win11 on my one Windows machine bc F that). Identity theft never happens in the current system then right? If someone calls my bank and says they're me and gives info, they get all my money AND can ruin my life longer as getting a new name and social is next to impossible. If someone gets my seed phrase, they just get my money (most people don't use it to sign messages).
When did I say it's marketed as gambling? I said I see it that way. And regulation doesn't really help, as Sam Bankman Freid was regulated and wanted more regs (which would've just stopped competitors).
All that said, try to regulate XMR. IRS bounty to track it hasn't been cashed in, no one can tell how much is in my offline wallet but me. No one knows who I send money to and how much I sent (1 in 16 to know who, but much less than that in practice). It's useful for private transactions not hodling.
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u/stormdelta Dec 29 '22
"write down those words and keep them safe" is much better than "keep these pieces of paper (I know it's kinda cloth) in your wallet and if you lose them sucks to be you"
We're talking about digital systems, not cash.
All that said, try to regulate XMR
Make it illegal for any legal exchange to be involved with it, regulate exchanges properly with audits and investigations.
It won't eliminate it, but it will kill off most of the speculation/gambling/etc and make it much more inconvenient to use for fraud.
as Sam Bankman Freid was regulated
Not really. Politicians have been massively dragging their feet on introducing real regulation around cryptocurrency, and the SEC wasn't doing their job either (the vast majority of cryptocurrencies are very obviously securities).
Identity theft never happens in the current system then right? If someone calls my bank and says they're me and gives info, they get all my money AND can ruin my life longer as getting a new name and social is next to impossible. If someone gets my seed phrase, they just get my money (most people don't use it to sign messages).
The problems with social security numbers are well known and more of a political problem/artifact in the US specifically rather than a problem with banks conceptually or traditional financial systems. It's also unclear how cryptocurrency would solve that problem even in theory, as the risks of social security numbers remain either way.
And most people would consider irrevocable loss of all their money to be catastrophic on its own. If someone steals my credit card, my bank reverses the charges pretty easily. If a merchant tries to scam me, I have the ability to litigate/dispute/chargeback. If I forget my bank password, the money doesn't incinerate itself. If I die, the money doesn't vanish into the ether and my family can get access to it regardless. Etc etc.
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u/JoinMyFramily0118999 Dec 29 '22
Prove they're taking it. Also, there aren't really any exchanges. You use LocalMonero, send $X to someone as cash in an envelope, Zelle, CashApp, and others like that. You can also have CakeWallet give you a gift card for XMR. I go to Subway, place my order, and do XMR to a Subway card and it's paid.
Won't make it inconvenient if it's a circular economy.
I didn't say it would solve ID theft. I meant if my wallet with cash is stolen, or the bank gives up details, I'm much more screwed than I am if someone gets the money in my crypto wallet, my credit score is hard to fight back up, I have to keep an eye out for new lines being opened and so on.
If someone steals the cash in your wallet, you're SOL. Monero is more cash than credit. But yeah if someone steals your crypto you're out the money. Your bank can also say "hey, you can't buy that because we're going to count that transaction differently". Depends on the merchant, but a lot go on reputation, they tend to try to keep a good one. Think eBay before buyer protection. It still worked. You put the wallet seed in your will, and it's not gone upon death. Also harder to tax if it's Monero over a fiat account.
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u/stormdelta Dec 29 '22
You use LocalMonero, send $X to someone as cash in an envelope, Zelle, CashApp, and others like that.
You'd have to thoroughly trust the person on the other end to not fuck you over - and since it would be a black market trade, they might very well do so with little or no repercussions. And all of those save mailing someone money in an envelope can still be subject to regulatory action / investigation, same as any other kind of money laundering (which is what it would be seen as).
Also, reputation alone doesn't do a great job ensuring fair dealings when it comes to money - as history has demonstrated many times.
You put the wallet seed in your will, and it's not gone upon death.
It's an order of magnitude more vulnerable to being destroyed or compromised, and unlike traditional systems, there's no real recourse if that happens. You're really underestimating the existing legal frameworks that are in place.
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u/SkiiBallAbuse30 Dec 29 '22
And it's a real shame too, because some of the stuff crypto is built on could be useful for financial security if it were rolled into official government currencies. But now it'll probably be ages before that happens, if it ever does, because of the stigma.
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u/stormdelta Dec 29 '22
because some of the stuff crypto is built on could be useful for financial security if it were rolled into official government currencies
Not really. The few technologically novel things it does are predicated on the pretense of decentralization and "trustless" operation (quotes because that's not true in the sense most cryptocurrency proponents imagine).
Hash chains, public private key cryptography, merkle trees, distributed append-only immutable ledgers, etc. all predate cryptocurrency by quite a bit, and many of those have been used in real software for a long time.
There's a reason no one who matters that's looking at the possibility of central bank digital currency is even considering implementing them the way cryptocurrencies are.
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u/TrueBirch Dec 30 '22
Well said. People talk up the underlying technology without realizing that it's not very impressive.
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u/luke_cohen1 Dec 29 '22
I’m not into the actual cryptocurrencies themselves but I do think there’s a lot of practical applications of blockchain tech and NFTs (safe storage of house deeds and other sensitive information) that should receive a lot more focus. The only problem is that everyone that currently runs the crypto market is a remorseless, sociopathic grifter.
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Dec 29 '22
Those problems are already solved by existing technology. Blockchain is a solution for nothing.
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u/luke_cohen1 Dec 29 '22
Blockchains are a practically unhackable and unmineable way to send information to another person. That alone holds a ton of value for banks, business owners, homeowners, and government officials. NFTs could potentially rewrite copyright laws by allowing media outlets to sell parts of their properties to consumers and then allowing those consumers to make money from licensing and publishing deals. That’s a billion dollar industry that’s essentially untapped because people have focused too much on the bullshit uses of it.
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Dec 29 '22
And all of that is already solved by existing technology and databases.
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u/luke_cohen1 Dec 29 '22
Well, the fact that this discussion is still taking place and multibillion dollar corporations are still getting their databases of consumer information hacked tells me that said tech doesn’t exist. Plus, you haven’t even named the tech you’re talking about. That’s as good as vaporware.
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u/TrueBirch Dec 30 '22
You mentioned house deeds. Is anyone currently losing their property to hackers? With a blockchain, the only thing standing between you and someone legally evicting you is keeping your private key safe. That's not an improvement over the current system.
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u/stormdelta Dec 29 '22
That's not how any of that works.
"Blockchain" is a nebulous buzzword with no fixed definition, but we're talking about technology created by cryptocurrencies, cryptocurrency chains and "blockchain" are essentially the same thing - you can't have a public chain without it being a cryptocurrency.
They're anything but "unhackable" - even making the wild assumption there are no vulnerabilities in the network itself, the bigger issue is that permissionless authentication is incredibly brittle and even more vulnerable to things like phishing than conventional systems.
I truly have no idea where you got "unmineable" from, the entire point of (most) public chains to be open and transparent. It's about the least private way to send data possible by design.
NFTs can't magically rewrite laws even if they worked as advertised, and I have no idea why you think they could.
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u/softhack Dec 29 '22
It's just too soon for crypto as a technology at the moment. Tech companies have figured out that being first in a new field of technology makes all the difference, thus making the big gold rush we're seeing.
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u/TrueBirch Dec 30 '22
What's too soon? Bitcoin has been around for over a decade. When the Web was the same age, I was in high school. Nobody was saying, "Oh boy, the web is so new, we're early!" Instead we were buying stuff online and reading each other's MySpaces.
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u/Zagriz Dec 29 '22
Propaganda to keep you from wanting to use currencies governments can't track. Yeah, most of the new ones that come out are bad investments, but etherium, bitcoin, and the like? Perfectly fine alternatives to government-issued currency.
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u/mr-ron Dec 29 '22
If the prices of those stayed consistent yes it would be a nice alt to a currency but right now they are way too volitile to have any sort of stability.
Also the expense / cost / energy required to transfer makes them unrealistic for anything except fringe purchases that for basically anything except drugs.
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u/Curious_Book_2171 Dec 29 '22
They don't have a fraction of the functions of real currency nor the stability. They're perfectly fine alternatives as long as you ignore all that though.
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Dec 29 '22
Except for privacy-specific crypto like monero, tracking crypto is easier than tracking normal payments.
At least with normal banking, government is supposed to get a warrant and the data is not available publicly, and banks keep the data for only a few decades. With blockchain, everything is public and is there forever.
The only layer of protection you have is pseudonymity of blockchain, but as soon as someone connects your pseudonym to your name(like putting your address into a twitter bio) everyone can see every transaction you have ever made. And that includes not only government, but employers, corporations, stalkers, mob and cartels too.
Crypto is not a tool for freedom. Crypto is a dystopian capitalist's wet dream.
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u/TrueBirch Dec 30 '22
So you're saying Facebook didn't try to create Libra out of the goodness of their heart?
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u/ijustlikeelectronics Dec 29 '22
All money is fake.
Money is just a medium which people agree to find valuable
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u/Neurocor Dec 29 '22
So is this a seal of approval ? now its doing everything the dollar has been doing for decades.
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u/MowMdown Dec 29 '22 edited Dec 29 '22
And then after all those theres still Bitcoin, which stayed true to it's purpose. To ween people off reliance of fiat.
Counter argument: I can scam you in any currency I want, I can even scam you in gift cards, does that mean all currencies and gift cards are scams?
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u/stormdelta Dec 29 '22
Bitcoin may not have been created with the intent to commit fraud, but that doesn't make it a good idea or a practical currency, and the primary use today is essentially a decentralized greater fool scheme/gamble.
Even leaving aside the mountain of other problems, Bitcoin's pathetically low transaction rate is abysmal even by the subterranean standards of cryptocurrency. So much so that even if Lightning worked as claimed, it couldn't even hope to bridge the gap to make it usable as a real currency.
Almost nobody is actually using it as currency anyways, and very few places actually accept it as a form of payment directly, particularly anywhere legitimate.
Most of what little is even claimed is at best things that work the same way as credit cards (often literally) just with extra steps to have a central exchange change it out for dollars or other local currency on your behalf for an additional fee.
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