It seems like it took some number of minutes and scored billions, and at that point it was a matter of whether/how much they could trade out before it was locked. I don’t know how many minutes or hours it took to lock? If they managed to trade 1% before blocking, that would be an extra tens of millions. If 10% that would be hundreds of millions, etc.
Most likely this would be used as a trial and error by the perpetrator. Most likely who took (6.xb) what he can when he was able to do so. There is an expectation of some sort of loss. Next time the people they're working with will see this as an opportunity for improvemennts, either in crypto vulnerabilities or related sectors that share similar procedure and safety.
Apparently [1], he managed to put them as collateral on a lending platform. That allowed him to borrow ETH. The way it works is that if you don't pay back the loaned ETH, the lenders can take the collateral. Except that here the collateral is itself frozen. So apparently, the ETH as now safe in the hacker's wallet and the lenders just lost a bunch of money.
I wonder why not swap them? And had he, would it have bricked the swap pool?
Maybe swap pools and/or law enforcement working together with stablecoin issuers are more vigilant about pools than they are about various DeFi lending pools, given that one usually represents a change of ownership while the other does not?
I guess the point is simply that "blacklisted" coin is no longer a liability. They wouldn't be "printing free cash" they'd be cash neutral.
The alternative is the stablecoin providers effectively keep the money for themselves. At that point the justification for the blacklisting seems like little more than self enrichment?
There are reports that the hackers used the stablecoins as collateral to borrow ETH via DeFi, before the stablecoins were frozen
In this case, the hackers have the ETH, while the lender has some frozen stablecoins
Given this context I said that if they print some more stablecoins to make whole both the DeFi lender and Binance, it's a betrayal of their other customers
If you are willing to accept an asset as collateral that can be frozen, then the onus is on you as the lender to take some steps to Know who Your possible Customers are.
Funny how the same argument can apply about the customers of Binance - if you are willing to accept to keep your funds in the hands of an unregulated third party which has a disclaimer at the top of the page saying "Don’t invest unless you’re prepared to lose all the money you invest.", then the onus is on you if you lose your money
Probably not everyone knows, but USDT has a "black list", and admins can prevent any address holding USDT from spending. The black list is implemented in USDT contract.
So USDT is not truly decentralized and your money can be frozen for any reason or no reason at all.
USDT is created by a super shady company and is not at all decentralized or censorship-free. You could have made the argument for Bitcoin (and still can to a certain level) but most cryptos that propped up after that or stablecoins do not follow the hacker philosophy and more the banker one. Ironic that the whole crypto movement got co-opted by the likes of JPM which it seeked to replace.
Recently I tried to donate to a project using their preferred crypto payment processor flow, which purported to support "Coinbase Wallet" integration. So thinking that was just like, Coinbase, I said "sure why not" thinking it'd save me the effort of copy/pasting long strings back and forth.
Turns out, Coinbase "Wallet" is a completely separate thing from Coinbase, and long story short, ultimately ended up accidentally converting some spare ETH I transfered into some kind of garbage Binance "wrapped" Litecoin. Which had zero indication/warnings in the app other than a like 4 pixel Binance logo superimposed on the 16 pixel Litecoin logo that it wasn't the real thing.
Once I gave up on this Wallet experiment I ended up needing Gemini to walk me through all the Binance "gas" nonsense to finally manage to swap into a real coin I could transfer out (like 80% of what I started with after subtracting gas fees and miscellaneous leftover change I was stuck with). And while transferring I had to avoid like a dozen alternative networks consisting of seemingly random strings and a scary red banner saying "yo don't fuck this up".
My first red flag should have been that Coinbase Wallet's Play Store name literally advertised betting on prediction apps. Second red flag was while looking for "Litecoin" in the list of coins, there were literally about 5000 different spam/meme coins with dozens of near identical clones that were all name squatting on top of each other.
As someone who came of age in the Crypto 1.0 "Bitcoin is for buying drugs" era the entire exercise was utterly baffling and somehow significantly less usable than crypto was a decade ago for actual payments. I guess for a young person looking to illegally gamble their paychecks at some unlicensed offshore prediction market it provides some utility I'm missing but man, the experience just made the post-Web 3.0 crypto scene look .... grim.
That technically true for any coin where miners are organized enough, see the ethereum fork where bad contract made wrong people lose money so they forked entire chain to get the money back
Until someone robs you. I've seen teams of burglars target asian households around weddings, because they know that all the family gold will be in the house. Fastest way to lose 100k.
i'll have to recommend "practical doomsday" here - https://lcamtuf.coredump.cx/prep/ (edit: because it spends a lot of time on the topic on how to secure your wealth). or ask lcamtuf himself.
Off topic. It seems to me that "preping" became less popular after covid. Perhaps, people realized how ineffective it was when we encountered a doomsday scenario in real life?
US government seized all citizens' gold in 1933 (see Executive Order 6102) [1]. I thought in US the private property is sacred, it turned out US is no different from communists which would seize multi-apartment buildings owned by private persons.
I don't doubt what you're saying. But as someone who is really not buying into cryptocurrencies, this is exactly what someone who holds a big amount of some obscure cryptocurrency would say.
I've heard good things about monero from a friend. This is not an attack on monero, rather a reflection on the general tone of the message.
That's a terrible argument, the IRS taking an interest in obscure finances is usual. Can't escape from the tax office by trading in obscure things.
Monero is, time of writing, #12 on the coinmarketcap leaderboard [0] and less than 1% of the crypto space by market cap. It's hard to complain about that being called obscure; anyone who gets a feel for crypto by looking at a top 10 coins list isn't going to see it.
Although it is a technological miracle. That coin specifically might do poorly in the long term so I'm not about to call it an investment, but I think it's quite possible that Monero holds a probable entry in the history books in 150 years time.
To add ^,
Remember this is fairly early still. We still have people walking around thinking that bitcoin sent by aliens of some sort. The adoption of understanding is still in progress, the correct definition of the technology needs to be better understood by the public. You don't have to agree with it or use it, only associating crypto with cybercriminals and " China " arsenal of spy tools; is only prolonging better uses for the technology and more of a use case for criminals to remain imminent.
The contrast isn't that great between transactions by Visa Mastercard: codes that tell a software - + and what balance is already there. A billionaire does not have a billion in cash at the bank, sorry. They have to request that and I'm not even sure what the policies are for large cash sums. The billion is written on a paper 1mm thick and signed and stamped from the bank "check" The idea is not far from crypto.
Rhetoric is still out and with that it hinders adoption and lets people with no knowledge of the technology have a voice in governing the use and widespread adoption.
I think how easy it is depends on the country and state of things. I would not want to move or share even small amount of gold outside of first world countries even in good times.
Not sure about this, isn't it hard to convert to fiat currency for real-world spending? Since it is often used for illegal activities, Coinbase (and I guess other big exchanges as well) don't trade it.
Yes, it’s a currency swap. You need to find another person (such as a bank, or in crypto parlance, a “defi”) willing to take what you have and trade you what you want.
Yes, there are even semi-decentralized exchanges based on smart contracts, where you can find trade offers posted by others and execute them in a zero-trust way.
It's very easy to pick it up, put it in a car or van, and move it to a different location.
It's much less easy to convert it to something you can actually spend. Even if you can get it to a buyer, they'll always offer you less than you expect/want.
Reputable dealers have KYC reporting duties of their own. Disreputable dealers... may have other ideas.
Of course dealers have KYC (you generally need to give your id) but this thread was about having one's own gold in a safe, not about shady dealings or stealing gold.
Gold sells at about 1% less than the current market price of the gold content of your item which I find fair. It might be easier here in Antwerp than in other places to deal with gold because it's kind of a gold trading hub. You can basically show unannounced (I suggest going by bike rather than by car because there is little street parking) and trade your gold for cash at the -1% rate, obviously if you get to the million euros range it's going to be a bit different, but for a few tens of thousands it's business as usual. And it's not like it's a difficult place to reach from anywhere else in the EU.
Talk to airport security people. The number of travelers, particularly from India and the middle east, with gold bars is nuts. It isn't loose bricks in a sock bag, but piles of one-ounce bars in plastic wrappers, stacked like playing cards, is not unusual. The Canada mint has a reputation for excellent gold/silver. Middle eastern tourists regularly return home carrying stacks of canadian gold/silver bars.
I love monero but then you have the problem that very few exchanges support it and if you need to convert big amounts of it in common currency it gets quite hard to do compared to eth/btc
Well, nobody said that the true anarchy would be easy. No government actually wants to approve the original spirit of crypto, everything they allow is either a toy or a scam they can take advantage of.
Then people get into shitty casino tokens that are widely available because the state doesn't care about a little gambling and got surprised that they are in the casino in the first place.
Not the case at all. True anarchy is community governance where a very local group of people start working together. Anarchist meetings are not restricted to, but include, looking like a bunch of people in a room, voicing their problems with this week's chief speaker as moderator, and then everyone in the room splitting off into working groups to address each problem. The chief speakers rotate around the group each week to avoid moderator bias, and each working group might reach out to other anarchist groups to exchange information and resources freely.
This is but one model developed within academia for an entirely anarchist organisation, there are dozens of others and they have been both studied for efficacy (they tend to work better than a more hierarchical structure), as well as put into practice in real life within certain organisations. To this date there are a number of non-profit organisations and coöperatives that use this governance system to improve the situation where they are locally and achieve their goals — whether that's "everyone working to improve the local community" or "make good products for a client".
The entire point of anarchism is that there isn't One Big Guy, it's that it's people, deciding on a system and working together on a small scale — this then translates to the big scale through cross-group meetings, information sharing, and resource sharing. There is a lot of evidence within the social sciences to back these methodologies up as being very efficacious compared to traditional methods of group organisation, as well as being more democratic than traditional alternatives.
This additionally tends to be how some kinds of open mic nights work, as well as some kinds of modern speakeasys.
It’s a bit antithetical to anarchy to start defining true and untrue configurations. It’s more accurate to say that while anarchy permits chaos, it also permits self-organization, one mode of which is hierarchy-free community governance. Most of us have experienced this among friends when e.g. deciding where to go to dinner.
This is one of these circular relationships. You and your friends can experience true, free, cooperation exactly because you don't have to be on guard 24/7 against enemies, because you live in a civil society that has rules, and people to enforce those rules - ultimately by coercion through violence.
Peaceful anarchy evaporates when bad actors arrive. I wish it wasn't so. A structured civil society is the nearest we've managed to get to being able to live in relative freedom almost all of the time. It's the least violent, least coerced option we've been able to find.
The other way would be to go live in a group by yourselves off the grid, and as long as every one of you is good and decent that will be fine, but the moment one of you goes bad, you either have to choose violence or they will do whatever they want to you.
"A structured civil society is the nearest we've managed to get to being able to live in relative freedom almost all of the time. It's the least violent, least coerced option we've been able to find."
Can you source these claims?
Civil society only seems to be getting LESS free and MORE violent all of the time. And in America, I constantly have to protect myself against enemies be it scammers or the thug who tried to mug me for my wallet.
The term anarchy is used in academia for all kinds of non-hierarchical civil societies. Academia being academia, they chose to stick with a dumb label. But the set I think OP is describing is more intuitively understood as non-hierarchical social systems.
I have said this many times, and will probably have to say it many more: Stablecoins are nothing but a face-saving measure for the US government.
It is politically impossible to go back on KYC/AML measures in the traditional financial system, even if some of them were perhaps a bit too ill-advised. It's much easier to say "this is shiny new tech, very different from that old tech over there; we support innovation so we won't impose KYC requirements on it", even if there's no logical reason to do that.
As it stands, stablecoins let you make a keypair in the privacy of your own home (or your own agent sandbox, as it were) and immediately start transacting. They're allowed-by-default instead of blocked-by-default, with the US government still able to block you if they have a specific reason. No traditional bank I know of, in any country, works like this. This is a valuable capability to have, technologically, even if there's no technical reason why a Postgres database and a REST API couldn't provide the same service, but faster and more easily.
if its bannable by a centralized place please explain how it is decentral? i thought that was the kind of controls a decentral system was specifically designed against. is that understanding of mine flawed?
It might be decentralized in terms of infrastructure, but the more precise property is that it is permissioned. Permissionless stablecoin exist - see DAI, etc, but USDT is absolutely not one of them. It is the worst parts of cash and the worst parts of crypto put together into one unholy pile of suck.
Well actually, no. The Tether T&C says that they can basically do whatever they want with your wallet, all disputes have to be resolved via arbitration, and you waive your right to a jury trial.
Sure, you _can_ still sue them anyway and maybe get around the T&C, but you can sue the government to, the important question is if you can actually win.
But the company can just turn around and say, soz we don’t have your deposit. We invested it in Labubu dolls and they crashed in values. Also we lost them. Next time, DYOR.
If a bank collapses, you get your money back from the Fed, no questions asked.
You get up to the amounts insured by the FDIC, plus whatever is recoverable from the residual assets of the bank and anything else the FDIC decides to award.
Tether's entire business model, providing an almost-unregulated USD cryptocurrency, relies on them not arbitrarily banning people. They don't do it frequently or without thought. You're far less likely to get banned from USDT than just about any non-cryptocurrency financial institution.
> Tether's entire business model, providing an almost-unregulated USD cryptocurrency, relies on them not arbitrarily banning people
No, their entire business model relies on bank/CC providers don't ban them. Somehow, they treat all crypto related transactions as iffy but USDT, bought to buy crypto, got under much less scrutiny. The entire problem their solver was that new users couldn't move cash to exchanges fast enough to join bull runs.
Not practical for ordinary people. No regular person is holding their own wallet, and even the technically sophisticated who do get their keys stolen or lose them to faulty backups or technical snafus.
Calling/implying that it's technically sophisticated is not really reasonable. Having a BTC (or other currency) wallet is utterly trivial, let alone from a technical standpoint, it's much easier than setting up an e.g. Coinbase account. The only issue, outside of choice of course, is people being ignorant of what needs to be done and I think that can largely be explained by the fact that centralized providers spend billions on marketing while decentralized wallets spend nothing on it.
I want to get into self-managed. I know nothing about it.
As soon as I start to look for information, I will be drowned in automated criminal attacks trying to trick me into create a vulnerability in my setup process.
This is absurd. I literally just looked up 'BTC wallet' on multiple search engines and all link to https://bitcoin.org/en/choose-your-wallet . From there there's literally a wizard that clicks you through based on your knowledge/desires, and then links to exactly where to get a wallet that fits best with what you're after.
The intention of bitcoin was to have a digital medium with similar properties as cash: no need to trust anyone else, and you can exchange it with whoever you want. Cash can also be stolen if someone takes your wallet, leaving you no recourse except the law
Imho Bitcoins being stolen is not at all Bitcoin being "bent, broken, or subverted", it's just a natural consequence of the design goals. If an unrelated third party could block my bitcoins by accusing me of terrorism that would be subverting the system, and such things have not happened to bitcoin-core (but have happened in other parts of the bitcoin ecosystem)
> Cash can also be stolen if someone takes your wallet, leaving you no recourse except the law
The issue that is often raised with Bitcoins and other cryptocurrencies is that not even the law can help you in case of theft. Now, it's true that the police wouldn't bother helping me recover a wallet with 100€ into it, but things change if someone steals millions or even billions like in this case.
Most people don't carry their entire finance in wallet tho. If someone steals my wallet and CC PIN, the most I'm out is the few thousands of limit on those, not my entire financial portfolio.
The argument for bitcoin being secure is more along the lines of "if you store your own bitcoins securely nobody can take them from you". Storing them securely is easy in principle (just keep them on an airgapped computer, or write the key down on paper, then "just" do physical security well) but hard in practice (major security-convenience tradeoffs). However, storing your bitcoins with a major provider like binance has a terrible track record and not something the hardcore bitcoin advocates actually recommend
Huh? You can trace bitcoins forever, and people would probably pay extra for some vanity bitcoins; and probably pay less or nothing for some bitcoins that are legally questionable.
Your answer does not answer anything. The discussion is about whether or not to have the trusted third-party. Pro-ttp said that ttp protects from criminals. Anti-ttp said that ttp can make your own money dissappear because ttp is bending the rules. You said nonsence, your examples are not showing any rules or contracts about digital property which are being bent. Why any bitcoin criticism from anyone is always so weak?
OK. But many countries have also outlawed being gay; that doesn't make it legally questionable in general.
On a tangent:
Funnily the Algerian law they quote would not actually apply to bitcoin (but I doubt Algerian judges would see it that way):
> Art. 117. — The purchase, sale, use, and holding of so-called virtual currency is prohibited. Virtual currency is that used by internet users via the web.
Bitcoins have their own protocol independent of the world wide web.
> It is characterized by the absence of physical support such as coins, notes, payments by cheque or credit card.
People have made physical bitcoin coins, and there's plenty of payment cards etc floating around that you can use with bitcoins.
Compare with eg the Brazilian Plano Real which was sort of a virtual currency for quite a while, but I doubt the Algerian law was meant to outlaw that one.
Turns out the reason crypto was invented isn't "decentralization" at all, it was nerds feeling left out and wanting their own financial instrument grift.
Well sure, but the average consumer needs and/or wants some protections, safeguards and insurances. If my bank gets hacked or even if I get skimmed it's considered their fault and I'll get my money back.
If it's stolen from a bank, it's their obligation to recuperate you.
FWIW, most countries have a type of insurance if a legally operating bank goes under, at least some of your savings are protected (eg. in Serbia that's up to 50kEUR).
While I can't speak for other places, in the UK, if you haven't been careless and report quickly enough, your refund is not dependent on anyone being caught.
Arguably any fiat-collateralised stablecoin is ipso facto centralised and trusted (someone needs to 1) issue the coins only against fiat collateral and then 2) hold onto that collateral reliably and 3) return it upon presentation of the coin), and at step 3 they can always say "no, we won't give it to you".
However, it does not necessarily apply to algorithmic stable coins (Terra) or crypto-backed overcollateralised coins (DAI). That's why I said "fiat-backed".
Btw, backing and promises of redemption are two different things.
Deposits at a regular bank aren't backed by fiat. The bank promises to pay you back in fiat, but they don't keep dollar bills in a vault. The promise is backed with all the bank's assets. Ideally, they have a think equity cushion, so that even if the assets take a hit, the promises don't.
Probably the founders/employees of the company issuing/redeeming the token would be arrested very quickly. Tornado Cash people got arrested for much less.
Decentralized is a great concept but it’s 99.9% rug pulls and you can’t get any safety unless you centralize. As an investor there is no way to protect yourself because the rug pulls are several orders of magnitude more sophisticated than most people’s understanding.
> As an investor there is no way to protect yourself
Why? BTC is pretty stable longterm and nobody is going to touch your cold wallet. Anything that has an owner or legal entity is not decentralized, subject to either rug pull or censorship and shouldn't be touched, sounds very easy.
Everything that promises you any return is a scam in crypto, simple as that.
The U.S. government is the largest beneficiary of this service. More than $2.1 billion in USDT connected to or requested by U.S. authorities out of over $4.4 billion in total illicit USDT freezes globally.
The financial system has evolved over 5000+ years and is like an endless series of Chesterton's Fences at this point. Here we find another: the ability for a regulator or a bank to freeze assets is once again proven to be a feature not a bug.
Managing a wallet where there is no recourse if your wallet is compromised is simply too difficult when even crypto exchanges get hacked and otherwise sophisticated people get compromised when taking cautious measures (eg [1]).
Crypto really is and always was a race to the rug pull.
The payment processors don't object to you. They usually object to the store or the platform you're getting things from.
It's invisible, insidious censorship. They don't hit your hands with a ruler and say "stop, no buying that, bad". They make it so that what they don't like doesn't get to be on the store shelves in the first place. Hard to buy what isn't being sold, isn't it?
As for why they do it - it's unclear, but there's speculation that payment processor leadership might be in part ideologically captured by the usual "think of the children" moralizers and puritans. The same types that used to spurn moral panics, rally against D&D and later GTA, and are the first in line to propose sacrificing freedoms for imaginary safety - now allowed to wield covert influence over most of the payments that happen online.
If you mean Visa's porn jihad, that's most likely a saudi dude threatening to pull a large investment, it obviously has nothing to do with children, but any haram.
The usual given reason is that porn/adult stuff tends to generate a relatively large number of chargebacks, due to factors like (1) predatory/dark patterns by porn providers (2) guys’ partners seeing porn charges on the credit card statement and freaking out, and guys claiming they were “hacked” or whatever and then following through and disputing the charges.
Even if the absolute number of chargebacks is small, in relative terms it’s still several times larger than it is for non-“adult” charges, and that kinda destroys profit margins — more support calls, more work, etc.
Or so they say.
I’m not in the industry, so I don’t know. I can certainly believe that many of the oligarchs in charge are weird shitheads with bizarro conservative views, but payment processor leadership doesn’t seem to give a fuck about morals in any other manner, so it’s also kind of weird to me that they’d pick porn and porn only (a seemingly passé target for most conservatives these days) as the one and only target of a uh, decades-long distributed lowkey conspiracy that spans multiple generations of payment processor leadership. ¯\_(ツ)_/¯
> It’s invisible, insidious censorship
Absolutely agree 100%. Even if they’re not trying to be puritans, this is absolutely the outcome.
Because they own and control their own smart contracts but do not own the network that the contracts are deployed to.
Plus, freezing funds and waiting for US law enforcement to weigh in rather than being the proverbial judge, jury and executioner is now likely to keep you on the right side of said law enforcement.
> Because they own and control their own smart contracts but do not own the network that the contracts are deployed to.
I assume they call a method on the contract to freeze the coins (with some superuser kind of signature), so they could easily write a method that moves the coins back, too. This should be similar in terms of gas costs.
The law enforcement theory seems more likely, yeah.
Did they ever show proof that they actually hold $1 for every tether? This was big a few years ago but never heard anything about it since. (I could Google it but others here probably want to know)
Indeed! And Elon Musk just gave the entire world a lesson in not trusting someone else's technology, by shutting down Ukraine's Starlink/Starshield used to defend against Russian jet-powered drones, cutting down the speed to near-stationary, and for no evident reason, blaming the President, and then it turns out it was likely a ploy to "upgrade their subscription". [0]
No matter what the reason or the situation, shutting off your access to the technology is their option and it will likely happen at the moment it is a greatest problem to you.
This goes so far beyond "Not your keys, not your coin", it is "Not your stack, not your sovereignty".
Obviously in this case, there is are truly solid rational and moral reasons to shut down those USDT transfers: to cut off the theft which is funding NK's aggressive nuclear weapons program. But that changes nothing about the structure of everyone's vulnerability in using technologies controlled by others such as USDT.
No. The last time this happened, it led to the Ethereum/Ethereum classic split, and that was 10 years ago.
However, the stablecoins are not “real” cryptocurrencies like e.g. BTC or ETH, but are built as smartcontracts on top of ETH, basically using it as a big replicated database. So they might(?) just manually “give back” the money to Binance, as in freezing money in the stolen account forever and “printing” an equal amount to Binance's credit.
Or, to put it in another way, no need to reverse an erroneous SQL transaction if you can just create a new one that fixes the data you altered.
I think the idea is that they freeze them indefinitely, and then they no longer count against the centralised reserves, since they can never cash out. Now they can mint the equivalent amount back to Binance and remain solvent.
It’s been years since anything Tether minted was plausibly 100% backed by real assets. Both times they’ve been forced to show the books, they only had fractional backing. And they’ve minted tens of billions of tokens since.
And yet people like the parent and those with billions invested in Tether seem to believe that it's all backed and fully solvent and minting new money from thin air is completely reasonable.
It's remarkable to me how long this scam has lasted and how much confidence people have in it, in spite of the very shady characters involved and the likelihood of fraud.
Personally I'm skeptical of Tether. But you don't need to trust them to believe that if they permanently freeze Z USDT and then mint Z USDT then their ratio of reserves to USDT is unchanged.
Well I think you do need to trust them: you are taking at face value their statements and assuming they do what they say they will. What if they mint coins without collateral (they have been caught doing this before), what if they unfreeze coins later (they have done this before)?
These stablecoins are just a database owned by untrustworthy people and backed by nothing but their promises, they're just one step up from NFTs.
Because if they permanently freeze 2 billion in a wallet, that Tether can never move or cash out, so their liabilities go down 2 billion. They can mint an equivalent amount to a non-frozen wallet without affecting their reserve ratio.
And yes they can print money, you have to trust their reserves that are off chain.
To be clear: There is no permanently frozen guarantee. Tether can and has unfrozen (called removeBlackList)addresses before. All of this is just a public database fully controlled by Tether Limited.
Excluding wash and artificial activity, supposedly stablecoins trade 400M/h so if it took 2h to notice and lock they might have been able trade about half a billion without overwhelming existing volumes?
right but too late to call freeze on the original wallet address as per gp's post. I would imagine it got distributed to many wallets and attempts to tumble by the time Tether could move on it.
It’s legal (at least in the US) the government just advised every major exchange that they couldn’t uphold their KYC obligations with it so they dropped it.
"ever so gently" as in you'll get a 30 year sentence for doing so. I guess the government is "ever so gently" nudging me away from committing murder too.
But there is still a distinction between monero being banned and the government saying “we don’t believe you can fulfill kyc obligations”. There is a legitimate argument that yes they could that could be made in court, depending on the implementation.
That's why it's paramount for LEOs to go after people doing the bad deeds instead of simply banning a whole monetary ecosystem, just because it's easier to do.
If you ban a coin, instead of persuing the actual criminal, then you're both doing a disservice to honest users of the coin and leaving the bad actor to do harm to society in some other way.
There are only 8B people in the world - they all fit into a "box" of 2k by 2k by 2k of humans.
It really isn't that hard to know who's doing bad things to others, especially with current technology.
Criminals used to meet in person to discuss crime (because mail/phones can be intercepted) and meet in person to move cash. It was a hard limiting factor on what they can get away with. With e2e messengers and anonymous crypto both of those "issues" are fixed.
Do you know anyone who uses it for legit purposes? I don't. I bet you ban a coin like that and you kill orders of magnitude more crime revenue compared to .001% of honest users using it to send money home and save a few dollars on the transaction.
Stablecoins only use the accoutrement of blockchain as smoke and mirrors to distract and confuse regulators, not because they actually benefit from it at a technical level. They aren't really decentralized at all and could just as easily be a database, except for the regulatory thing
nothing about crypto is decentralized. it's verified by enormous mining farms, who contribute hashes to centralized pools, all stored on one central ledger, and interfaces with the fiat/legit financial system only by using that very financial system.
oh, and three acounts hold like 25% of all btc in circulation.
crypto can do some things, but decentralization isn't one of them. just ask Coinbase
USD tether is barely crypto at all, it's a wrapper around treasury bonds which the US govt. regulates
The stated point is to prevent central banks from printing currency / inflation. The claim is that crypto today worth 1% of the world's BTC will be worth just under 1% of the world's BTC in 2300, at least barring e.g. progress in quantum cryptography, a sunspot taking out digital infrastructure, or similar.
That's probably socially harmful, but it is the claim.
Inflation is increasing prices, which has causes other than central banks putting more money into circulation. When Bitcoin’s value drops, prices in Bitcoin increase so it experiences inflation regularly.
Even when it doesn't exceed economic growth; the flip side of the coin is deflation.
Resources like gold, land, or bitcoin, if broadly used, is deflationary as the economy grows, even from simple issues like population growth. All else being equal, if I save $100 today, and the economy triples, it's worth $300, since I have the same piece of a bigger pie.
Interesting I didn’t know you can block/cancel transactions. Does this have to happen before the new block is minted. or it can happen after, that’s what I’m inclined to think just based off of the word block
Centralized stablecoins like USDT and USDC aren't layer-one cryptocurrencies like Bitcoin or Ethereum. They're more like applications running on top of other blockchains, usually as smart contracts, and their issuers hold admin keys which can freeze, mint, burn, and otherwise redistribute funds at will. As far as timing goes, stablecoin issuers can't actually cancel or reverse a transaction that's already in a block that's been mined, but they can freeze the receiving address afterward and burn the funds there, then reissue them elsewhere, which has much the same effect.
At which point they might as well use a database to keep track of the money, like banks do, and drop the cryptocurrency aspect, which was only ever a fig-leaf to keep regulators away.
If traditional banking is available to you, then I don't think that there are any significant advantages. But lots of people—notably those in countries with unstable currencies [0]—don't have access to high-quality banking, so for them, stablecoins can be an acceptable substitute in some cases. It's probably not a great idea to hold stablecoins long-term (there's always a risk of the sponsoring company going under, and unlike bonds they don't pay interest), but it should be fairly safe to use them for transfers, since the transfers are quick enough that there are very low odds of the company becoming insolvent while the transfer is underway.
There’s thousands of smaller exchanges, and those are way easier to start up than banks. You don’t need a license -- in fact, you don’t even need a company.
Okay, let me clarify: you don’t need need a license. What you need is a way to receive and send payments, which is certainly possible to regulate, but it’s also possible to navigate around those regulations.
Mostly you just a couple dozen bank / Venmo / etc accounts in different names, so when one gets blocked you don’t lose all your money. You can also open a bank card in a more lax jurisdiction and accept transfers there instead (so e.g. a user in the EU can send euros to their “friend” in Kazakhstan using Visa Direct -- good luck regulating that).
And it all exists today, on razor-thin margins somehow! I’m sure there’s a lot more shenanigans under the hood.
> What if those people with unstable currencies just used a stable currency?
Most countries with unstable currencies either have strict currency controls, fixed exchange rates, or rampant corruption, so using USD through an established local bank is either not an option or obscenely overpriced.
> Like certain countries just use physical USD.
Yeah, that's nearly always going to be a better option than using a stablecoin, unless US currency is unavailable/illegal, or if you need to transfer money long distances (like with remittances).
But remittances are a huge industry [0] and the traditional providers charge significant markups, so stablecoins are pretty valuable for that alone.
You take 1 $ from someone and give them a token, now you have money the other not. In theory you need to make sure you keep the 1$ but you want to pay people and you are greedy so you invest it and suddenly everyone is broke.
If USDT gets to a frozen list - that means that Tether does not need to comply with requests to convert it into USD? I guess this is very useful for Tether and the other stable coin emitters.
That's not the whole point at all. And there are truly wild west cryptos, but most people want some trustworthy regulatory body, whether it's a government or not, backstopping their funds when they get large enough.
At least a motivated person could audit the smart contracts on this. It isn't like it's a surprise when it turns out it's possible to freeze these coins.
> Freezing crypto is so disgusting to me I don’t know…
The feature literally appears to have just saved over two billion USD from being stolen! I mean, fine, "disgusting" is subjective. But the need for the feature is real and quantifiable (and very large) and it did what it advertised.
it cuts both ways - it's fine when 2B of heist money gets frozen, but much less "fine" when your paycheck gets frozen because you've attended a political rally the ruling party/class does not like.
I'm lost, are you arguing against Binance or against freezable crypto? Both "control" you! There are like three billion dollars out there in presumably-north-Korean-hands that their owners thought they "controlled". They didn't.
So given the choice, yeah, I'd like some safety please.
I am always amazed how little knowledge and cargo culting of 2017-era bitcoin knowledge is prevalent on HN. Whatever you monetary feelings towards crypto is, the technical aspects are fascinating. But most of the time HN gets it wrong.
TBH, the more you know about the technical aspects the less fascinating it gets.
Smart contracts and stablecoins by extention sound technologically interesting, but at the end you always rely on trusting people.
The core of the financial system is about managing trust and therefore a social issue, not a tech issue. It'd be nice if more tech nerds would internalize that tech can't solve social issues on it's own
Stablecoins are centralized and of course rely on trust - you need someone to exchange whatever asset they promise to guard for your tokens. I find them fascinating (in conjunction with the lighnint/taproot assets over bitcoin) and not necessarily unsafe.
In the freebanking era that the US had (before the FED was founded) every bank emmitet their own dollar. And, of course, there were banks over-issuing and bank runs left people without their assets. But that was before we had free flow of information and the internet. In todays world you can monitor and trade stablecoins, market cap, exchange rates in a freebanking system in sub-seconds. Any erosion in trust will immediately result in price fluctuations. We need a digital freebanking era, and it is a shame the genius act fell through. Exporting the dollar to people without access to banking would benefit the US (but I get that it currently mostly benefits trumps family).
I would not consider USDT to be an example for transparency or free flow of information. The selling point of USDT is that it's pegged to the US doller. Users put at lot of trust in both that 1:1 ratio and therefore indirectly in the US FED.
But: Are you sure that Tether is actually backed by USD? It certainly isn't free information.
USDT comes in many forms (technical side). You literally can trade USDT as one of the only major stablecoins over bitcoin+lightning network but that is not the entirety of all USDT in circulation. If you look into how this works (because it is fully decentralized running over bitcoin, not some proprietary blockchain) you will find out you can exactly get the market cap, which bitcoin wallet hold how many coins etc. Now lightning distorts that a bit, but market cap is not affected by that.
But it is in the nature of stablecoins that you cannot check their vault. You have no idea if they actually store the assets they claim to store. And whether they will honor their promise to exchange that asset for their tokens.
I don't think you're using that term right. Not knowing how something works doesn't mean you're cargo culting.
People are not so knowledgeable about the other coins because the whole point of magic internet money is that it can't be controlled by anyone. If your entire account exists in some box somewhere under the control of some entity, how is that any different from a bank (which also mostly doesn't operate on cash but just moves bytes around)?
> People are not so knowledgeable about the other coins because the whole point of magic internet money is that it can't be controlled by anyone
Your problem is treating it as magic internet money. It is not - you literally have the sourcecode to truly assess how it works. Your account is not with some entity. Magic internet money is your bank account - if your bank decides to set it to 0 tomorrow it is "magic" - you have no idea how that happens, and you have no guarantee that it doesn't happen. Or when your credit card is suddenly blocked because your bank decides is "suspicious activity" - again, that is black magic.
Bitcoin is the opposite of magic internet money. It is deterministic to its core. As for other cryptocurrencies - well they are mostly open source so you can check them.
Example of cargo culting in HN is people claiming that there are no tokens possible in bitcoin (false since taproot assets landed in 2021), not anonymous (false also since lightning layer 2 network existed) or not able to "pay for your coffee" in bitcoin (again, bogus since layer 2 networks). This is all cargo-culted knowledge once learned and true in 2017, never to be revisited.
USDT is implemented as a contract written in Solidity, working over other network like ETH, and it has a blacklist managed by admins. Once address is added to a blacklist, you cannot spend anything from it.
- 971.15M USDT (Ethereum): https://etherscan.io/tx/0x7baba482077843514d9c72bac0110ba091...
- 823M USDC (Ethereum): https://etherscan.io/tx/0xc954c86f118e8e410e6a3eb9e3b38ff4a9...
- 312.73M USDT (Tron): https://tronscan.org/#/transaction/71b0ec0fe873fe820c37cc3ec...
- 175M USDT (Ethereum): https://etherscan.io/tx/0x0c07a5e428ce233a3bcb40f257ad899594...