Gambling returns an expected -2% to -10% by design.
If you pick virtually any 5 year interval for Ethereum or Bitcoin, you see >100% growth. In the current crash, they are up 128% and 187% respectively.
Fiat currencies are not "gambling" even though they fluctuate in relative value and even mimic the -2% to -10% expected return of gambling far more appropriately than major cryptos.
I feel ppl like you act in very bad faith, but you also claim crypto isn’t even financial infrastructure, so perhaps you’re just clueless.
If anything, it is equities that is unusual, because that market is designed to be accessible to retail investors, with significant consumer protections.
One company is the broker, the exchange, a major placement vendor, and the software vendor for algorithmic trading (which is a black box anyway). On top of that, in order to trade, you have to show them your books so they know everything about your business. And finally there is the extortion as well, don't advertise against your own name, oh sorry someone else is paying more.
The whole thing is engineered to extract every last ounce of margin from the advertisers. However due to the duopoly of the two colluding players (they carefully don't compete with each other) there is no choice.
It's frankly absurd the situation we have gotten into with online ads. It needs significant regulation.
I feel like Coinbase would use this info to argue against being truly monopolistic of some or all of those markers.
I am definitely certain that Coinbase (specifically Paul Grewal, their head lawyer, and, previously, Alex Marx, former head of risk) have prepared for similar claims to be made. They have an extensive roadmap of expected legal challenges and their plans to ameliorate any damage done to their business model. I’m confident their goal is dismantle any claim that they have monopolistic control of a customer’s crypto once purchased.
Please check before making these claims.
“market maker” has a very specific meaning. just because they can “move markets” or “list coins” does not make them market maker.
KYC/AML: the exchange wants your business so is more willing to drop their standards. In most markets most participants trade through brokers who also need to do these checks.
Market making: the exchange has an unprecedented insight into how it matches trades and the scope to front run other traders. Perhaps even introduce "oops" bugs that their MM then exploits.
Now, are there "openly visible ones?"
> custodian, trading exchange, market maker, and Kyc/Aml
Custodians are people who hold on to funds and securities. If a mutual fund buys a share of Apple, they don't hold the share themselves, it's held by a custodian bank like BNY.
> trading exchange
NYSE/NASDAQ/CBOE/etc are examples of exchanges, where they match up buy orders and sell orders, and nothing more. Dark pools are examples of exchanges, as they are a private place that match up buy/sell orders.
> market maker
Market makers are, as their name suggests, institutions that exist to make markets. What this often means is that they have the obligation to maintain both buy and sell orders on specific securities they signed up to make markets for at all times. Examples include Jane Street, Citadel, etc.
> kyc/aml
GP probably mistyped; kyc/aml are regulations that must be followed by financial firms interacting with their customers. Applies to basically everybody here.
A few more:
Clearinghouses: when you trade a security on an exchange, you mere commit to buying x for $y at $settlement date, typically 2 business days after the trade happens. This settlement happens at a clearinghouse, which guarantees both sides of the trade.
The objection from most regulators is that a crypto exchange typically acts as all of the above simultaneously. They are custodians, in that they hold the crypto, they typically make markets, they are obviously an exchange, they provide clearing and settlement services, all at once. Regulators don't like this, since there are conflicts of interest inherent in the roles and they should be separated out into different institutions.
Dark Pools (ATS) are very much like exchanges except the quotes are not public. All ATS operators are required to record every trade to the consolidated tape in which everyone in this thread has access to if they want to pay for it.
Crypto firms say they need clarity about regulations, but Gensler has said that crypto markets "suffer from a lack of regulatory compliance, not a lack of regulatory clarity"."
Maybe calling it a "field" is being too generous. Crime is crime.
The actual users on-chain is abysmal and frankly, embarrassing.
Current users onchain is in the thousands. Even when the market was raging, the biggest memecoin in the world could only manage about 1M+ wallets - probably about 80-100k real users.
NFT trading volume is down to under 6-7k active users.
At peak bull market, Tornado Cash, despite its notoriety, had about 125 daily transactions.
Arbitrum, an Ethereum scaling solution, gave out literally free money in the form of an airdrop (I got $15k worth). The airdrop went out to about 650k wallets - under 100k real users.
If crypto were to disappear tomorrow, it would affect a population no bigger than a small Indian town.
An absolute mess. No correlation between adoption and hype/valuation at all.
I agree with you on the overhype, but if roughly 16% of active addresses are real users, then active users within the past 24 hours would be around the population of the largest city in Indiana rather than a small town.
Source: DefiLlama
Isn’t it weird that there’s so much noise around an industry with so few real users then?
While it was the main innovation originally it's not that major today.
I still believe in crypto as a store of value and hence as a possible future global currency, but 10+ years later and it's still almost entirely speculation.
Recently, some big names (Saudi Arabia, Brazil, maybe China) are moving off the dollar and in search of a new global currency. Let us see.
His congressional testimony was a joke. How that man still has the job of SEC chief is quite the mystery. Being CFO of Hillary Clinton’s 2016 campaign is probably a factor.
On one hand, yes, Ethereum is obviously a security, it raised money from investors to make a thing, and investors expected to get rich off it.
On the other hand, Ethereum is currently regulated as a commodity by the CFTC.
If he says Ethereum is a security, then there's a political mess.
If he says Ethereum is a commodity, then it breaks down the SEC's case for all the crypto projects out there that's basically stock IPOs but with a thin crypto layer on top.
I would not impute his credentials, he was a partner at Goldman Sachs and was chair of CFTC under Obama. He was involved in crafting a great deal of policy after 08 around the new regulations for financial institutions. He's not stupid, he's clearly a better person for the job than most of the people here on HN.
Commodities aren't Gensler's job. It would be like someone asking him about the tax code. It's fair for him to say "I don't know." What he knows are securities.
Regardless of how you feel about crypto, if you're at all familiar with law you'd understand that we're simply in uncharted territory here; saying that crypto is super dirty and non-compliant is quite literally as inaccurate as saying that it's super clean and fully in-line. The law simply isn't there yet.
Crypto doesn't have an inherent right to have the laws rewritten to enable it, it needs to make the case for why that would be good for the public. So far it hasn't.
We're not. Gensler certainly doesn't think so. With a few exceptions, the overwhelming majority of crypto are securities. In most instances, they are indistinguishable from equity.
Just because some people believe in the promise of blockchain technologies doesn't change the nature of the things that you ultimately store on said chains.
If you carve a dollar sign into a Banana, commit fraud and embezzle billions of dollars, the problem wasn't the lack of Banana law.
2. Even if the SEC were to issue guidance that a certain type of crypto operation is exempt from regulation, instead of proceeding on a case-by-case basis, it lacks the resources to carry out the requisite enforcement against all the crypto operations that are not exempt. From what I have read and heard, the likely reason why Genseler will not go after Bitcoin is because he believes the SEC lacks the resources. BTC has too much of a foothold.
IMO, Genseler's SEC is taking on the amount of enforcement it believes it can successfully manage, maybe more. Time will tell. IMO, just because some crypto operations manage to evade SEC enforcement does not mean crypto is a legal grey area. It means the SEC has a limited enforcement budget and is pursuing actions that it believes have the best chances of success.
There is an extraordinary amount of fraud on the internet. One can argue that lack of enforcement against crypto operations is because "the law has not caught up", but perhaps the more likely explanation is that the authorities have not caught up.
From what you've read and heard from whom? Please be specific.
I’d have expected enforcement to practically print money due to fines. (That one of the deliberate design aspects of fines would be that they would cover all the agency’s investigations, successful and unsuccessful.) Is this not the case?
True disruption to the existing system
The ultimate court (though technically a different body) contains the same people as the UK's Supreme Court, the legal system is accountable to London (through a UK appointed, UK career civil servant called the Governor) as are the police. The laws and taxes are all made and raised locally. There is a high level of infrastructure, safe etc. and best of all (unlike SF) I've never seen anyone defecating in the streets.
Why all these Fortune 9000 companies run their business via Bermuda rather than home jurisdictions again?
That doesn’t mean that there are no problems with the status quo - for example, PayPal and western Union have many critics - but rather that the blockchain companies would have been much better off building things which were competitive rather than relying on MLM marketing. International remittances are so bad that even Bitcoin is better but there aren’t many cases like that and “slower, costs more, riskier, harder to use” is not generally a compelling sales pitch.
Doesn't bitcoin's volatility affect your use case?
I had sat on a wallet for years, having opened one to get 5 BTC from Andresen's faucet in 2010. A couple faucets later I had a few more.
That's right! They straight up used to give away multiple entire bitcoins just for loading a website.
Eventually a "real" retailer started taking BTC so I spent approximately 1 of them on a new power supply for my PC.
The last purchase I made using Bitcoin was a power supply from Tiger Direct: https://i.imgur.com/8tW7bmN.png
I had bitcoin to spend and Tiger Direct was the first "major" retailer to take it. As soon as that slashdot post appeared in January 2014 I moseyed on over to check it out and made a purchase, probably the same day the payment method was implemented.
Almost immediately after this the first cycle of widely-publicized scams/grifts/schemes started. And then the cycle never stopped.
The market became flooded with cryptobros and instead of being used for basically nothing it became a vehicle for fraud.
Rather than being a cryptographic curiosity it became a distasteful embarrassment so I did a cost-benefit analysis found that it wasn't for me.
I still have several BTC. I do not care. 1BTC could equal a quadrillion dollars and wouldn't care. I don't want a quadrillion dollars, I want my rose bushes to look magnificent this year.
Besides, I'm a "smart tech" person so I make enough money and have no desire to live the greasy crypto lifestyle.
Where did the $24,000 in value per BTC difference between when I last touched my wallet and today come from?
It came from schmucks pouring money into a system that, eventually, will run out of schmucks.
My moral compass is such that I would rather die penniless underneath a bridge after having spent a decade in squalor collecting cans and shitting in bushes than participate in a market like crypto.
We do suggest that 99%+ of crypto value is not being spent like that. Most of crypto valuations is built on a vague promise of some future useful use cases when the underlying technology is just a slow database with no root password.
Countries have tried and were pretty successful? China banned it, and now it's pretty difficult to trade crypto in China. The US can pass legislation tomorrow saying no crypto no more, and it will be effectively banned from the US. How are you going to trade crypto when nobody wants to touch it?
If you don't comply, your bank will shut down your accounts, the people running the exchanges will get arrested, their websites will get seized, etc. The US financial system is pretty good at keeping track of where USD goes after all, it'll get pushed into the shadow financial sector where all the other crime lives, and that seems pretty much the end for all the new crypto projects.
No one uses it. Its literally a few thousand people left on-chain.
The DAUs of OpenSea is down to a couple of thousand.
All that hype, all that money just to serve two thousand people…
Frankly, its also completely unusable. Gas cost shot up to $50/transaction on Eth mainnet because every idiot was buying memecoins named PEPE and CHAD. Even L2 solutions like Arbitrum were up to $2/transaction. ZkSync mainnet was $15-20/transaction.
And that’s when there are only a few thousand active users. Imagine what happens if millions actually do come onchain.
The “future of finance” is being held hostage by idiots trading shitcoins.
But I do not see it as anything other than that.
My process goes like this.
I buy the crypto I need to send, I send it, I am left with 2 or 3 us dollars I didn't use in a wallet until I need to use it again.
Better and easier than PayPal, but there are risks such as it isn't secured or backed up and I am ok with those risks.
This is clearly false and I welcome you to try and prove otherwise.
I think the Lightning Network has the potential to onboard millions of people today, and billions in the future. Check out how to run you're own node, be your own bank with Bitcoin and ignore the unscalable and scammy side "crypto" projects
That’s the narrative the crypto influencers want you to believe, but it’s not true.
Web3 / crypto projects are having a huge difficulty recruiting, even in this market. Few people want to go work in crypto because the writing is on the wall.
If you want to look at the past of money, there is the Chiemgauer which is the most successful complementary currency in Germany and even that one only did 7 million € worth of actual consumer/business transactions in 2015 (there are no updated statistics but it is ongoing and growing).
People keep using the national currency because it reduces transaction costs.
LOL
No one is going to use a company's token as money in any meaningful way at scale.
Only Bitcoin will be used as money the way we understand money now because it's an open and neutral protocol. An internet-native money.
This will allow them to take share and compete with Binance.
This seems bullish for Coinbase as Binance is sitting on a huge pie. Seems like a loss for the US.
The SEC regulates understood things. If you create something new, they’re not going to give guidance for it because they don’t have to give. They’re not in the business of helping people create new markets.
They also said that some cryptos on coinbase are securities, but when coinbase asked which ones, the SEC said „lol we won’t tell you but we will probably sue you soon for that“. [2]
[1] https://www.investopedia.com/news/sec-chair-says-bitcoin-not...
[2] https://www.coinbase.com/blog/we-asked-the-sec-for-reasonabl...
Why is SEC supposed to do the job of Coinbase's lawyers? If I want to make a shitcoin tomorrow and ask the SEC for "regulatory clarity", are they required to respond to me? What if I programmatically create a new shitcoin every 30 seconds? Am I also allowed to cook up some substances and mail them to the DEA to get some "regulatory clarity"?
Coinbase does business in a legally unclear area, which is why its primary expense should be lawyers. You can't just skimp on that and expect government agencies to do your work for you. If you try that, good luck defending yourself in court.
