The crypto thread

[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.

 

[Joij21]

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.

I disagree with this logic fundamentally if only because more centralized systems become more inefficient even though they may have access to more resources.

Chaos must exist so things never grow stale, centralization makes things stale. It would be too burdensome for any centralized system to actually make the investment into catering to more specialized interests. Even with algorithms such programs are merely designed to find out what kind of demographic the consumers are, though as it turns out not all demographics are profitable enough to be catered to at a large enough scale. A so called one size fits all platform is instead created to cater to the most profitable demographic groups the most without displeasing them, but again never too pleasing them as the other profitable groups must not be scared away by catering to any one specific group. A single streamlined one size fits all system preferred as it requires less employees and marketers to one where there would essentially be a separate catering department for each profitable group.

In essence this creates an inefficiency whereby no one who is part of a profitable demographic is exactly happy and properly catered to. Those outside of the demographic norm who are not considered profitable are also left out, however these groups would be profitable to smaller sized businesses which specifically cater to them, they only stop being profitable when a business expands and the overhead costs of an increasing bureaucracy substantially rise due to increasing centralization. A lot of bureaucracy is unavoidable as a company expands because of government regulation which tries to reign in the excess of business, more specifically big business, therefore it becomes most prudent for such private enterprise to dedicate an increasing amount of revenues into lawyers on standby, legal consultants, tax advisors, etc. They are forced to scale up in a way that is never lean and can no longer be lean as it could when there was less scrutiny when one was smaller. This is part of the phenomenon known as tendency for profit to fall, the other when two or more highly centralized and consolidated companies compete and get into a price war without any recent technological innovations in production.

Hence centralization and consolidation is dangerous as it will eventually validate Marxists and is a major component in their desire to ruin Capitalism.

 

[Senethro]

Hence centralization and consolidation is dangerous as it will eventually validate Marxists and is a major component in their desire to ruin Capitalism.

You make it sound like Capitalism contains inherent contradictions or something.

 

[Hygro]

There's been way too much upside for me to ever say "I told you so" on crypto. But boy is there a lot of "of course this was going to happen" going on.

 

[Birdjaguar]

There's been way too much upside for me to ever say "I told you so" on crypto. But boy is there a lot of "of course this was going to happen" going on.

Every ponzi scheme has big winners if you get in early enough and get out at the best times.

 

[Moriarte]

I disagree with this logic fundamentally if only because more centralized systems become more inefficient even though they may have access to more resources.

Well, fundamentally, we’re discussing free market logic. You may not like the free market logic because it entails centralisation. But then you’ll have to propose modifications within the free market system that would make ripples within the fabric of world economy. The ripples that would keep all assets and currencies from concentration and centralisation, not just cryptocurrencies. Hopefully, we are not discussing spherical cryptocurrencies in a vacuum. We are discussing crypto trying to be subservient to economic needs within context of wider world economy.

Chaos must exist so things never grow stale, centralization makes things stale.

Chaos can be perpetuated within centralised systems. Chaos can arise as a result of centralisation. The chaos of crypto was born within centralised world of finance. So yeah, chaos exists. So does order and centralisation. No problem there. Also, centralisation is not all bad. We have space program due to concentration and centralisation of critical mass of minds, resources and finance. Nuclear weapons. Nuclear power. Centralisation of agriculture enables sustainable population growth. You’ll need very strong arguments in order to prove to the people that centralisation is so bad they have to abandon it in favour of a global communist crypto anarchy.

Hence centralization and consolidation is dangerous as it will eventually validate Marxists and is a major component in their desire to ruin Capitalism.

Marx merely predicts that capital concentration and subsequent centralisation will happen within capitalist mode of production given enough time. It did happen again. Damn you, Karl! Basement cryptofarmers ran for the exit at the first sound of trouble and all idealistic decentralisation ran with them. Their place was immediately taken by industrial crypto farms, while banksters taken over financial assets for ten cents on a dollar, because… who else? They’re the only ones on this planet with the cash. What value does precious decentralisation have if it vanishes, almost entirely, at first sign of periodic economic crisis? Come next crisis, the capital is going to concentrate again. And again. Each time there will be less and less decentralisation. As in businesses, so in crypto.

Absence of central planning leads to periodic crisis of overproduction. Crisis leads to concentration of capital. That is a dispassionate “formula” Marx, and many more after him talk about, in primitive terms. Maybe absence of central planning is not the culprit, maybe we should talk about inefficiencies… regardless, we have significant crisis every decade or so. Fact. It wasn’t crypto’s fault the economic world collapsed. But when it collapsed, a year and a half ago, we saw how quickly crypto centralised, despite ravings of enthusiasts, who claimed to have solved the problem. With all respect for individual talent, crypto enthusiasts didn’t even begin thinking about solving the problem of centralisation. The solution to the problem of inefficiency within world economy doesn’t stem from creation of tens of thousands of unregulated digital assets/currencies. “Anti-centralisation” was a nice sales pitch for a while. Now crypto people will need to come up with a new one.

 

[TheCleanerDragon]

This might be a stupid question, but what is the point of cryptocurrencies? What benefit does crypto offer as a medium of exchange compared to a real currency like the USD or Euro?

 

[Moriarte]

Well, the tangible benefit is that theoretically crypto is yours. Unlike fiat currencies, which can be confiscated for any one of a thousands of reasons. One can remove crypto from an exchange, keep it in personal storage, virtual or physical, so no authority will have precise knowledge or access to these funds. These funds will be as secure and as private as you wish them to be. If this warms your heart, then crypto is for you.

 

[Samson]

This might be a stupid question, but what is the point of cryptocurrencies? What benefit does crypto offer as a medium of exchange compared to a real currency like the USD or Euro?

The only real world economic advantage that has been undoubtedly realised AFAIAA is the ability for two individuals to transfer value remotely without revealing their identity.

 

[warpus]

Well, fundamentally, we’re discussing free market logic. You may not like the free market logic because it entails centralisation. But then you’ll have to propose modifications within the free market system that would make ripples within the fabric of world economy. The ripples that would keep all assets and currencies from concentration and centralisation, not just cryptocurrencies. Hopefully, we are not discussing spherical cryptocurrencies in a vacuum. We are discussing crypto trying to be subservient to economic needs within context of wider world economy.

Who thinks that blockchain tech will replace traditional finance though? If anything traditional finance will embrace blockchain tech and incorporate it into their centralized ways of doing things. They have already started doing this.

 

[Joij21]

Chaos can be perpetuated within centralised systems.

Not unless it's Anarchy the Purge and the government has a night of lawlessness where everything including murder is legal, further enforced with hired death squads who go around killing the poors to perpetuate chaos.

 

[Joij21]

Who thinks that blockchain tech will replace traditional finance though?

A banking crisis would need to be manufactured to cause distrust among the plebians in the banks and other financial institutions which handle their wealth.

Eventually some will blame capitalism and make a Marxist push, then reactionaries panic desperate to save it, finally crypto comes riding in on a white horse offering salvation to the system.

 

[TheCleanerDragon]

Well, the tangible benefit is that theoretically crypto is yours. Unlike fiat currencies, which can be confiscated for any one of a thousands of reasons. One can remove crypto from an exchange, keep it in personal storage, virtual or physical, so no authority will have precise knowledge or access to these funds. These funds will be as secure and as private as you wish them to be. If this warms your heart, then crypto is for you.

The only real world economic advantage that has been undoubtedly realised AFAIAA is the ability for two individuals to transfer value remotely without revealing their identity.

Sounds like crypto is only really useful for criminals or the paranoid.

 

[PhroX]

Who thinks that blockchain tech will replace traditional finance though? If anything traditional finance will embrace blockchain tech and incorporate it into their centralized ways of doing things. They have already started doing this.

How does blockchain tech help, well, anything, in centralised finance? It's little more than a really inefficient database.

 

[EnglishEdward]

A banking crisis would need to be manufactured to .....

Need to ? The system is inherently unstable, so banking crisises are inevitable.

Attempts to prevent them may delay them but will likely make them much worse.

It is a bit like forestry.

Preventing periodic natural wildfires means that inflammable wood builds up and
when prevention fails, the fire is far worse than if they had not tried to prevent it.

 

[MrCynical]

Well, the tangible benefit is that theoretically crypto is yours. Unlike fiat currencies, which can be confiscated for any one of a thousands of reasons. One can remove crypto from an exchange, keep it in personal storage, virtual or physical, so no authority will have precise knowledge or access to these funds. These funds will be as secure and as private as you wish them to be.

The catch being that these funds are as "secure" as you are personally capable of making them, which for pretty much everyone is still going to be far worse than conventional banking systems. There's a reason the cryptocurrency area is full of scams, and with this approach you are betting that you personally have the technical expertise to spot and avoid all of them. All for the digital equivalent of keeping all your money in cash stuffed in your mattress, and if anything even less smart to do.

 

[Samson]

The catch being that these funds are as "secure" as you are personally capable of making them, which for pretty much everyone is still going to be far worse than conventional banking systems.

I do not think that is a given at all. Banks are so bought in to using SMS as a primary security measure, and it is not hard to be more secure than that.

 

[MrCynical]

I do not think that is a given at all. Banks are so bought in to using SMS as a primary security measure, and it is not hard to be more secure than that.

I'm not claiming existing banking security is perfect, but the idea that J Random person has the same digital security capabilities as even smaller banking operations is ridiculous. Cryptocurrency systems have all the same vulnerabilities in terms of phishing, password misuse, obscure technical exploits, etc and add a bunch of additional ones unique to them. If I fall for one of those with conventional banking I at least have some options, and the bank retains responsibility for much of the technical expertise side of things. Fall for a crypto-scam and you have exactly zero recourse other than to post on twitter for people to point and laugh at. Can you explain how all of the many scams out there work? Because you can't personally secure against them if not.

For what it's worth, I don't like the use of phones in banking security and 2FA systems. It's linking important stuff to the single most likely item I own to be lost, stolen or damaged. And yet it still seems far less scam-ridden than cryptocurrency.

 

[Samson]

I'm not claiming existing banking security is perfect, but the idea that J Random person has the same digital security capabilities as even smaller banking operations is ridiculous. Cryptocurrency systems have all the same vulnerabilities in terms of phishing, password misuse, obscure technical exploits, etc and add a bunch of additional ones unique to them. If I fall for one of those with conventional banking I at least have some options, and the bank retains responsibility for much of the technical expertise side of things. Fall for a crypto-scam and you have exactly zero recourse other than to post on twitter for people to point and laugh at. Can you explain how all of the many scams out there work? Because you can't personally secure against them if not.

For what it's worth, I don't like the use of phones in banking security and 2FA systems. It's linking important stuff to the single most likely item I own to be lost, stolen or damaged. And yet it still seems far less scam-ridden than cryptocurrency.

If one just wants to store some value and transfer some occasionally to someone else it is well within the capacity of enough people who can use a computer for work / gaming that it is not "pretty much everyone". I guess there are questions about the magnitude of risk of losing your key/seed to a fire or rubber hose decryption or whatever compared to bank scams, but there is a lot of room for improvement.

Of course if you want to play with smart contracts and trying to make money with speculation that is going to be a lot harder. I am not at all sure I have seen a good use case for that frenzy of speculation.

Can you explain how all of the many scams out there work? Because you can't personally secure against them if not.

This is less true than it is for conventional banking. With conventional banking I am forced to use my phone, which is 2nd hand. I am forced to me aware of its vulnerabilities. With my monero wallet I can run it on a known secure system (a tails usb stick for example) and all I need to know is that system is secure.

To be clear, the basic security steps are:

• Put tails on a usb stick
• Create monero wallet on that system
• Copy the seed onto piece of paper and put somewhere safe

It is just not a system that is vulnerable to many scams.