The crypto thread

[Moriarte]

The crypto advocates should instead try to convince boomers that it would be a great way to replace credit cards. Unfortunately neither boomers in their ignorance nor banksters trying to continue to profit off of boomers will allow it. Crypto's inability to be adopted by the mainstream as an actual currency is just that, banksters trying to protect the credit card industry.

From the early days of revolution, I don’t feel “ease of use” is such a compelling argument in the case of crypto. Conventional plastic already serves the role of easy and superfast payment. It takes few seconds to pay with visa, that’s objectively fast enough for any endeavour. Crypto, in comparison, is as fast, but it definitely isn’t easy. In fact, crypto is HARD - dangerous: can be lost due to hacks, user error, bankruptcy of exchanges, unclear in terms of taxation, unburdened by security checks, volatile and scarcely accepted as a form of payment. As far as “money” has it’s meaning “medium of exchange of value”, I consider gold bars, company shares, rolex or property a far safer vessel to hold and transmit hard earned value, while fighting inflation somewhat. Some economists commit a mistake, trying to frame crypto as a competitor to Visa/MC/AMEX. We don’t need to fix money that can transact in a few seconds. That’s not a problem we need to solve. As a rough (and flawed) analogy, we don’t need a grand tourer which goes from 0 to 100 km/h in under two seconds. We just don’t. We live in the city. 2 seconds is fast enough. Some petrolheads out there might need that, but not us, the general public.

Roughly the same argument is made in regards to using crypto to program digital contracts, such as reimbursement schemes for automated, complex digital projects. (aka smart contracts) Same reply applies: buddy, you can do the same with USD, Euro or what have you, at half the headache.

Crypto’s future value, in my opinion, lies in an attempt to produce a framework for decentralised digitalisation of value in rare digital goods and services. The NFT craze has shown that any kind of perceived value can be packaged into a digital envelope and then transmitted, bought and sold across digital networks. NFT’s were another silly pyramid take, but the fact that we’re so advanced we can do things like that is notable. We can build a virtual economy, with an implied unique currency and attach it to a digital space in under 24 hours. That’s impressive, in my opinion, even though we haven’t yet found an immediate use for it.

 

[Gorbles]

We've been inventing virtual economies for years. The video games industry alone has a wealth of examples.

Some of the tech in the NFT stack has utility by itself, but it already did. Cryptography is already a thing, and is already invested in. The "problem" there seems to be that it isn't sufficiently monetised, and I fear what that motivation would do to that field, if applied to something that's less of an inherent mess than NFTs are.

 

[Moriarte]

We've been inventing virtual economies for years. The video games industry alone has a wealth of examples.

Right, you can even say decades, as in the case of EVE. Both EVE and crypto are separate manifestations of the same process, the same lineage. I feel that until someone respectable enough will take it upon themselves to centralise the technology, the crypto will remain, in it’s decentralised free-for-all state, a heaven for scammers, pirates and other nice people.

The crypto enthusiast will tell me that I can either have centralised or crypto (can’t have both), but I do think it’s a simplistic, narrow view.

 

[Joij21]

From the early days of revolution, I don’t feel “ease of use” is such a compelling argument in the case of crypto. Conventional plastic already serves the role of easy and superfast payment. It takes few seconds to pay with visa, that’s objectively fast enough for any endeavour. Crypto, in comparison, is as fast, but it definitely isn’t easy. In fact, crypto is HARD - dangerous: can be lost due to hacks, user error, bankruptcy of exchanges, unclear in terms of taxation, unburdened by security checks, volatile and scarcely accepted as a form of payment. As far as “money” has it’s meaning “medium of exchange of value”, I consider gold bars, company shares, rolex or property a far safer vessel to hold and transmit hard earned value, while fighting inflation somewhat. Some economists commit a mistake, trying to frame crypto as a competitor to Visa/MC/AMEX. We don’t need to fix money that can transact in a few seconds. That’s not a problem we need to solve. As a rough (and flawed) analogy, we don’t need a grand tourer which goes from 0 to 100 km/h in under two seconds. We just don’t. We live in the city. 2 seconds is fast enough. Some petrolheads out there might need that, but not us, the general public.

Roughly the same argument is made in regards to using crypto to program digital contracts, such as reimbursement schemes for automated, complex digital projects. (aka smart contracts) Same reply applies: buddy, you can do the same with USD, Euro or what have you, at half the headache.

Crypto’s future value, in my opinion, lies in an attempt to produce a framework for decentralised digitalisation of value in rare digital goods and services. The NFT craze has shown that any kind of perceived value can be packaged into a digital envelope and then transmitted, bought and sold across digital networks. NFT’s were another silly pyramid take, but the fact that we’re so advanced we can do things like that is notable. We can build a virtual economy, with an implied unique currency and attach it to a digital space in under 24 hours. That’s impressive, in my opinion, even though we haven’t yet found an immediate use for it.

Totally disagree. A metaverse type economic system has no real value unless you're a gamer, the silk road on the other hand delivers a physical product that many more people enjoy.

Crypto had to scale up beyond just drug dealing and into a physical retail setting, or at the very least online vendors like Amazon or Walmart.

You may say credit is better, but the whole point of crypto was to free people from credit and the inflationary effect it has on everyday prices which then necessitate more people to be enslaved by more credit since simple savings can't keep up anymore. It was meant to be an electronic and thus more convenient form of gold replacement currency no longer shackled to the banksters and their inflationary debt enslavement schemes which ruin the common man.

The banksters would not tolerate this however hence it was their mission to destroy it from the beginning by gaslighting various economists and Wallstreet people into convincing the public it was another security or asset. Hence the intentional backing of crypto holders like FTX, etc. It was meant to be peer to peer, not have some middle man hucksters corrupting it. It was all intentional that's why they allowed such things to take place and now push this foolish metaverse narrative to further gaslight the public and cause more distrust. Call me a conspiracy theorist but this is how the banks and the cabal of them which run the Federal Reserve system are trying to protect their main livelihood, DEBT SLAVERY!!!

 

[Samson]

Crypto has always been a "get rich quick scheme" by its backers, for its backers. New cryptos are like IPOs for stocks.

Who are the backers for decentralised coins, like say monero?

 

[Birdjaguar]

Who are the backers for decentralised coins, like say monero?

Who ever creates the crypto and peddles it to the public. Somebody or some group created monero. And it is popular among crooks. They prefer to make their money from ransome wear and the like.

Monero wiki:

The protocol is open source and based on CryptoNote, a concept described in a 2013 white paper authored by Nicolas van Saberhagen. The cryptography community used this concept to design Monero, and deployed its mainnet in 2014.
....
Monero's roots can be traced back to CryptoNote, a cryptocurrency protocol first described in a white paper published by Nicolas van Saberhagen (presumed pseudonymous) in October 2013.[3] The author described privacy and anonymity as "the most important aspects of electronic cash" and called bitcoin's traceability a "critical flaw".[4] A Bitcointalk forum user "thankful_for_today" coded these ideas into a coin they dubbed BitMonero. Other forum users disagreed with thankful_for_today's direction for BitMonero, so forked it in 2014 to create monero.[3] Monero translates to coin in Esperanto,[3] and the Esperanto moneroj is sometimes used for plural.[5] Both van Saberhagen and thankful_for_today remain anonymous.[3]

Monero has the third-largest community of developers, behind bitcoin and Ethereum.[4] The protocol's lead maintainer was previously South African developer Riccardo Spagni.[6] Much of the core development team chooses to remain anonymous.[7]

Improvements to Monero's protocol and features are, in part, the task of the Monero Research Lab (MRL). The lab is a rotating cast of researchers, scientists, cryptographers, and developers. Similar to the core VC development team, a portion of the MRL chooses to remain anonymous or otherwise work pseudonymously.[8][9]

Illicit use
Monero's privacy features have made it popular for illicit purposes.[12][34][35]

Darknet markets​

Monero is a common medium of exchange on darknet markets.[3] In August 2016, dark market AlphaBay permitted its vendors to start accepting Monero as an alternative to bitcoin.[3] The site was taken offline by law enforcement in 2017,[36] but it was relaunched in 2021 with Monero as the sole permitted currency.[37] Reuters reported in 2019 that three of the five largest darknet markets accepted Monero, though bitcoin was still the most widely used form of payment in those markets.[12]

Mining malware​

Hackers have embedded malware into websites and applications that hijack victim CPUs to mine Monero (sometimes called cryptojacking).[6][38] In late 2017, malware and antivirus service providers blocked Coinhive, a JavaScript implementation of a Monero miner that was embedded in websites and apps, in some cases by hackers. Coinhive generated the script as an alternative to advertisements; a website or app could embed it, and use website visitor's CPU to mine the cryptocurrency while the visitor is consuming the content of the webpage, with the site or app owner getting a percentage of the mined coins.[39] Some websites and apps did this without informing visitors, or in some cases using all possible system resources. As a result, the script was blocked by companies offering ad blocking subscription lists, antivirus services, and antimalware services.[40][38] Coinhive had been previously found hidden in Showtime-owned streaming platforms[41] and Starbucks Wi-Fi hotspots in Argentina.[6][42] Researchers in 2018 found similar malware that mined Monero and sent it to Kim Il-sung University in North Korea.[43]

Ransomware​

Ransomware deployed in 2021 by REvil. The hackers are demanding payment in Monero.[44]
Monero is sometimes used by ransomware groups. According to CNBC, in the first half of 2018, Monero was used in 44% of cryptocurrency ransomware attacks.[45]

One group behind the 2017 WannaCry ransomware attack, the Shadow Brokers, attempted to exchange the ransom they collected in bitcoin to Monero. Ars Technica and Fast Company reported that the exchange was successful,[46][6] but BBC News reported that the service the criminal attempted to use, ShapeShift, denied any such transfer.[47] The Shadow Brokers began accepting Monero as payment later in 2017.[46]

In 2021, CNBC, the Financial Times, and Newsweek reported that demand for Monero was increasing following the recovery of a bitcoin ransom paid in the Colonial Pipeline cyber attack.[7][4][48] The May 2021 hack forced the pipeline to pay a $4.4M ransom in bitcoin, though a large portion was recovered by the United States federal government the following month.[48] The group behind the attack, DarkSide, normally requests payment in either bitcoin or Monero, but charge a 10–20% premium for payments made in bitcoin due to its increased traceability risk.[4] Ransomware group REvil removed the option of paying ransom in bitcoin in 2021, demanding only Monero.[4] Ransomware negotiators, groups that help victims pay ransoms, have contacted Monero developers to understand the technology.[4] Despite this, CNBC reported that bitcoin was still the currency of choice demanded in most ransomware attacks, as insurers refuse to pay Monero ransom payments because of traceability concerns.[7]

 

[Samson]

Who ever creates the crypto and peddles it to the public. Somebody or some group created monero. And it is popular among crooks. They prefer to make their money from ransome wear and the like.

Monero wiki:

So it is a get rich scheme for Riccardo Spagni and an anonymous and large community of developers? How do they get rich? I posted the price graph earlier, it is not from pump and dump.

Spoiler Monero price over time :

 

[Joij21]

To be fair one of the side effects of crypto is it's been secretly trickling wealth into the research and development of more sophisticated hardware because of the increasingly demanding and energy intensive computational output needed to "mine" more coins. Miners kept buying all this excessive hardware that essentially helped bankroll hardware manufacturers into making the investment into better technology. In past eras you'd need like a major war or research initiative funded by the government for hardware companies to take in the risk of that much development.

IMHO the last ten years of crypto has improved hardware to such an accelerated degree that it paved the way for software technologies like Chat GPT to work and actually run. From Bitcoin to T-800s that's all I'm gonna say.

 

[Birdjaguar]

So it is a get rich scheme for Riccardo Spagni and an anonymous and large community of developers? How do they get rich? I posted the price graph earlier, it is not from pump and dump.

Spoiler Monero price over time :

Monero is built around the secrecy of ownership and transactions. The reason it is all so secret is to hide wealth as it moves through their system. Every uptick on the chart is an opportunity to make money. Every down tick is where those who bought on the up tick lose their investment. The guys in control of the production make money all the time. Do you have a graph of the volume in circulation over time?

 

[Samson]

Monero is built around the secrecy of ownership and transactions. The reason it is all so secret is to hide wealth as it moves through their system. Every uptick on the chart is an opportunity to make money. Every down tick is where those who bought on the up tick lose their investment. The guys in control of the production make money all the time. Do you have a graph of the volume in circulation over time?

But "production" is mining, and that is optimized for CPUs, the idea being that users leave their wallets mining and it is not worth doing it in big farms.

I have failed to find one of total circulating supply over time, this has loads of indicators but I cannot find that. Below is price with trading volume, it looks like it was all in the covid boom.

 

[AmazonQueen]

The new goldrush.

 

[Joij21]

But "production" is mining, and that is optimized for CPUs, the idea being that users leave their wallets mining and it is not worth doing it in big farms.

I have failed to find one of total circulating supply over time, this has loads of indicators but I cannot find that. Below is price with trading volume, it looks like it was all in the covid boom.

Like I said hardware innovation.

 

[Moriarte]

To be fair one of the side effects of crypto is it's been secretly trickling wealth into the research and development of more sophisticated hardware because of the increasingly demanding and energy intensive computational output needed to "mine" more coins.

Ah, but that’s an optical illusion. The lion’s share of research was and is, primarily, driven by the growing need for computational power in numerous areas of human life. Whether it’s data center side, gaming, ai workloads or other software engineering workloads, market competition drives chip designers and manufacturers to invent, test and mass produce more computationally dense chips. The side effect of this process is the alleged progress in crypto. ASIC manufacturers simply order the latest tech process from Taiwan or Korea, slap their relevant software algorithm on to it. Modify cooling solution, as chips tend to get hotter when you stack them. This is called R&D at their HQ. One can perceive this as technological progress. It isn’t. What you see is crypto manufacturers enjoying the “free” leftovers from the progress that takes place elsewhere. The bulk of progress occurs in Santa Clara, California, @ Nvidia and AMD, in Taipei @ TSMC, in Netherlands, @ ASML.

Not at the mining chip designer company. Which buys a bunch of slightly adjusted 5nm chips and runs an algorithm of choice on them.

Miners kept buying all this excessive hardware that essentially helped bankroll hardware manufacturers into making the investment into better technology.

Miners are a small group within a larger community of chip bankrollers. The biggest group, by far, are data centers - Microsoft, Amazon, Google, Alibaba.. The second biggest group are gamers. Then, assorted researchers and programmers. Miners are are at the bottom of that list. Which doesn’t mean miners don’t help bankroll progress. They do. But it is easy to overestimate their contribution, lets say. I’ll also add that miners actually slowed down progress significantly at a couple of points, when they, along with scalpers, bought out airplanes and ship containers full of GPU’s and as such removed computational power from the hands of real researchers in AI and other computational fields (like gaming). Who had to wait months for availability.

IMHO the last ten years of crypto has improved hardware to such an accelerated degree that it paved the way for software technologies like Chat GPT to work and actually run.

Yep, mining bank roll was impactful. We only differ on the subject of “how” impactful it actually was.

 

[FriendlyFire]

Federal Reserve system are trying to protect their main livelihood, DEBT SLAVERY!!!

I recommend
Whats interesting is how humans used currency, its not like debt will suddenly vanish with Crypto.
Nor dose Crypto solve the reasons why Humans went to Fiet money either

 

[Joij21]

Miners are a small group within a larger community of chip bankrollers. The biggest group, by far, are data centers - Microsoft, Amazon, Google, Alibaba.. The second biggest group are gamers. Then, assorted researchers and programmers. Miners are are at the bottom of that list. Which doesn’t mean miners don’t help bankroll progress. They do. But it is easy to overestimate their contribution, lets say. I’ll also add that miners actually slowed down progress significantly at a couple of points, when they, along with scalpers, bought out airplanes and ship containers full of GPU’s and as such removed computational power from the hands of real researchers in AI and other computational fields (like gaming). Who had to wait months for availability.

Are you sure those large corporations weren't into crypto?

Gamers at least at the beginning when Bitcoin was easier to mine (and later with the release of more recent coins that are minable) would use their gaming rigs to mine themselves on the side to fuel their videogame addictions, which of course then in turn bankroll game developers who then bankroll R&D into hardware.

 

[Moriarte]

Are you sure those large corporations weren't into crypto?

I am sure they’d love to be. Having own currency would be an ultimate crowning achievement for high profile businessmen with world leadership aspirations. But the problem is multifaceted:

1. Large corps make money by renting storage space in the cloud, while offering a vast array of computational services. There is no production capacity for extracurricular activities, never was. Every chip Microsoft Azure could squeeze out of the factory goes straight into the data centre business, which has to compete with Google’s data centers, which has to compete with Amazon Web Services, and so on. There is no scope for mining, where data centers offer clear cut pathway to profitability.

2. There’s just too much heat associated with going into crypto at the moment. Whoever does it at scale is under immediate scrutiny of federal agencies, the world banking network and, most importantly, own shareholders. Crypto space is volatile and stigmatised. So, even though (I think) some of the giant corps would love a piece of new cake, it’s just too early an entrance point for them. Once there is a clear, scalable, non-suicidal way to profit off crypto, big corps will immediately, today, throw hundreds of billions at the problem.

Gamers at least at the beginning when Bitcoin was easier to mine (and later with the release of more recent coins that are minable) would use their gaming rigs to mine themselves on the side to fuel their videogame addictions, which of course then in turn bankroll game developers who then bankroll R&D into hardware.

The scale remains relatively small: some gamers, some specialised data centers here and there. With final disappearance of ethereum gpu mining, by virtue of ethereum starting migration to proof of stake last year, the decentralised mining business is officially relegated to small scale. Centralised mining (bitcoin mining) is on the rise. In the time of crisis, small scale decentralised operators can’t survive. Their pockets are small. So, they are bought out by bigger operators. Cryses, among other things, are centralisation mechanisms. Digital finance is no exception.

Here’s the “paradox”: if you want to make something really big, you need to find a way to centralise it. But! Crypto doesn’t want to centralise. OK, says big money, have it your way: you are free to remain small then.

 

[innonimatu]

I recommend
Whats interesting is how humans used currency, its not like debt will suddenly vanish with Crypto.
Nor dose Crypto solve the reasons why Humans went to Fiet money either

You recommending anything by Graeber? there's hope.

 

[Birdjaguar]

USD Coin Breaks Peg With Dollar Over Bank Ties
By Vicky Ge Huang, Hannah Miao and Caitlin Ostroff

A major cryptocurrency operated by Circle Internet Financial Ltd. meant to mimic the value of the dollar dropped sharply after the company said it had $3.3 billion tied up in the collapsed Silicon Valley Bank.
USD Coin fell below 87 cents on Saturday morning, according to data from CoinDesk. The virtual currency, known as a stablecoin, is designed to trade exactly at $1. It is backed by real dollars and short-term government debt and sits at the heart of cryptocurrency trading.
Breaking USD Coin’s peg with the dollar has the potential to send shock waves through the cryptocurrency world still reeling from the collapse of FTX. For crypto traders, the decline in the value of USD Coin is reminiscent of the worst moments of the 2008 financial crisis when the Reserve Primary Fund, a money-market fund that most investors treated as the equivalent of cash, “broke the buck” in the wake of Lehman Brothers’ failure and saw its net asset value fall below $1.
Stablecoins such as USD Coin have become an increasingly critical part of the digital-asset ecosystem, accounting for over $130 billion in market value, up from just $11 billion in June 2020. Crypto traders rely on stablecoins to quickly get in or out of their positions in more volatile cryptocurrencies, while companies often store their capital and profits in stablecoins.

Like banks, stablecoins are subject to runs. If holders of the coins believe there aren’t enough dollars in reserve, they may rush to exchange their coins—or to sell them to someone else. That selling has driven down the price. A large deviation of USD Coin from its peg could trigger a wave of selling among holders, potentially sparking a fire sale of the reserves in the banking system. As spooked investors dash for the exit, the companies issuing the stable-coin would have to rapidly sell traditional assets to give clients their money back, potentially putting pressure on a narrow slice of banks that serve the crypto industry. The USD Coin reserves remaining at Silicon Valley Bank comprise about 8% of assets backing the token, according to Circle.
Circle holds $9.7 billion of its USD Coin reserves in cash and $32.4 billion in short-dated government securities, the company said in an update Saturday.

Bank of New York Mellon Corp. holds $5.4 billion of the USD Coin cash reserves and $1 billion is deposited at Custom-ers Bank, according to Circle. The company said it uses Signature Bank for transactions and settlements, and has no exposure to Silvergate Capital, a crypto-focused bank that shuttered Wednesday. Signature Bank was closed by New York state banking regulators on Sunday. The U.S. Treasurys backing USD Coin are held by BNY Mellon and managed by BlackRock Inc., Circle said.

Circle attempted to move reserves out of Silicon Valley Bank on Thursday, but those transfers hadn’t settled as of Friday’s close, the company said. The firm believes those transfers could be processed Monday.
If the cash reserves at Silicon Valley Bank aren’t fully returned, Circle said it would cover any shortfall using company resources, including outside funding if necessary. USD Coin inched higher to 98 cents after Circle posted the update, which also mentions that the firm will resume redemptions on Monday morning.

Another stablecoin, Dai, also broke from its $1 peg, trading as low as 90 cents Saturday. Dai, the fourth-largest stable-coin, worth around $5 billion, is partially backed by USD Coin, also known by traders as USDC.
The pace of USD Coin redemptions accelerated through Friday, with most of the USD Coin burned in the last eight hours, data firm Nansen said.

[/URL]

Jeremy Allaire, chief executive of Circle Internet Financial HOLLIE ADAMS/ BLOOMBERG NEWS

 

[Samson]

Funniest "theft" ever, and these people want you to trust them with your money?

PeopleDAO loses $120,000 after payment spreadsheet is shared publicly

PeopleDAO is the successor to ConstitutionDAO, a group that made an ill-fated attempt to buy a copy of the US Constitution in November 2021. When the accounting lead for PeopleDAO accidentally shared an editable accounting spreadsheet link in a public Discord channel, an enterprising member of the Discord decided to take advantage. They inserted a row with their own wallet address for a 76 ETH (~$120,000) payment, then hid the row so it wouldn't display to the other viewers.

When team leads reviewed the spreadsheet to sign off on the payments, they didn't see the row, and there was no rollup showing total payments or anything else that would've helped them catch the malicious activity. The transactions were uploaded to a tool allowing asset transfers via CSV, and the required six out of nine multisig members approved the transaction.

PeopleDAO have reported that they're working with various security researchers to track the funds, and have reported the theft to the FBI and FTC.

 

[Gorbles]

Miners kept buying all this excessive hardware that essentially helped bankroll hardware manufacturers into making the investment into better technology.

That's not what happened, no. But I think I've been beaten to the punch on this explanation.