General Cryptocoin Discussion

[Aquinus]

Another clear example of how regulation is demanded. The markets will never be able to regulate themselves, this is just further validation of that. The SEC should have been on their case a long time ago.

 

[lexluthermiester]

Another clear example of how regulation is demanded.

While you're not wrong, the proper solution might be something else.

The markets will never be able to regulate themselves, this is just further validation of that.

True. Regulations might never be able to help that.

 

[Vario]

Another clear example of how regulation is demanded. The markets will never be able to regulate themselves, this is just further validation of that. The SEC should have been on their case a long time ago.

One of the theoretical purposes of crypto is to not have regulation.

I've always been skeptical of cryptocurrency as an investment. The idea of an investment is something that gains intrinsic value. However, much of crypto investing appears to be getting someone else to pay more than you did for an item of zero intrinsic value, and not being the inevitable bagholder/sucker at the end. That sounds more like gambling.

Ostensibly, crypto has instrinsic value as a currency of the new world order, and if you buy it today, maybe tomorrow you too can be an ubermensch.

 

[lexluthermiester]

One of the theoretical purposes of crypto is to not have regulation.

And the repeating crashes with this massive one is what we get without regulations. Cryptocoin is proving itself to be as pointless and many have claimed it to be. It's far to risky and shady.

 

[R-T-B]

Not inside the topic, but a lot of chatter that coinbase could be in trouble.

Links or FUD frankly. I don't care for idle "chatter" as a citation.

If coinbase is indeed going out that would be pretty much it IMO for non-state backed coins. They have the most transparent books of anyone. If they can't survive, no one can.

 

[RandallFlagg]

Another clear example of how regulation is demanded. The markets will never be able to regulate themselves, this is just further validation of that. The SEC should have been on their case a long time ago.

I don't disagree with your basic tenet.

However it's important to note that regulation and control are antithetical to the reasons many actual crypto owners hold crypto. I've seen not a few people posit that if big gov't regulation comes to crypto markets, then existing crypto will die rather quickly.

 

[Vario]

Links or FUD frankly. I don't care for idle "chatter" as a citation.

If coinbase is indeed going out that would be pretty much it IMO for non-state backed coins. They have the most transparent books of anyone. If they can't survive, no one can.

Depends on whether they have the cash reserves on hand for a "bank" run. They claim 1:1 reserves held. The other concern is if they can unwind transactions fast enough.

 

[R-T-B]

They claim 1:1 reserves held.

And have published much more open stats on those reserves than many, which is why I'd like to see more than "the web chatter says" as a source.

The other concern is if they can unwind transactions fast enough.

This can always be a legit worry though.

 

[Bomby569]

chatter is just that. If anyone had any solid thing to present we all know and it would be to late.
A golden rule is all CEO's say it's all fine before the end. Someone saying it's fine means nothing.

their bonds seems to paint a different story

Coinbase Debt Was ‘Canary in the Coal Mine’ for Crypto Meltdown

In the wake of the spectacular meltdown of Sam Bankman-Fried’s crypto empire, many investors are looking for early warning signs that may have foretold the contagion that was about to unfold. One possibility? Coinbase Global Inc.’s junk bonds.

www.bloomberg.com

 

[Aquinus]

However it's important to note that regulation and control are antithetical to the reasons many actual crypto owners hold crypto. I've seen not a few people posit that if big gov't regulation comes to crypto markets, then existing crypto will die rather quickly.

Most of the time when I hear about people or organizations avoiding regulations in finance, it is to do shady or risky things that regulation would likely stop or at the very least scrutinize. FTX is a prime example of how that power can be abused, whether intentional or not. Lack of regulation is kind of the same as defunding the IRS, the only people it benefits are the people who are avoiding taxes. Removing regulations and safeguards is no different most of the time. Simply put, people can't be trusted to keep their greed in check.

 

[Vario]

Most of the time when I hear about people or organizations avoiding regulations in finance, it is to do shady or risky things that regulation would likely stop or at the very least scrutinize. FTX is a prime example of how that power can be abused, whether intentional or not. Lack of regulation is kind of the same as defunding the IRS, the only people it benefits are the people who are avoiding taxes. Removing regulations and safeguards is no different most of the time. Simply put, people can't be trusted to keep their greed in check.

I agree. Unregulated crypto provides opportunities to scam investors, commit tax evasion, or to transfer funds to/from (laundering) criminal enterprises. Advocating for deregulation implies support for these purposes.

 

[Bomby569]

Regarding price, i had money on BTC for some time, not now, to much volatility caused by the news, but my bet is a controlled trend down until 10.000$. But news can change this at any moment and that's why crypto is a dangerous asset now, and not by it's own fault. The same for Ethereum

 

[RandallFlagg]

Most of the time when I hear about people or organizations avoiding regulations in finance, it is to do shady or risky things that regulation would likely stop or at the very least scrutinize. FTX is a prime example of how that power can be abused, whether intentional or not. Lack of regulation is kind of the same as defunding the IRS, the only people it benefits are the people who are avoiding taxes. Removing regulations and safeguards is no different most of the time. Simply put, people can't be trusted to keep their greed in check.

Of course. But that means the exchanges can't exist without destroying the things that make crypto worth owning (vs fiat) in the first place. In fact, fiat would have a distinct advantage.

Once a regulator gets the crypto exchange under their regulatory power, they can get the customers, and their wallets. Then not only can they see all future transactions, but by its nature (blockchain) they can also see all past transactions.

This of course is a wet dream for regulators. Not only can they nail people currently engaged in nefarious activities, they can look into the past and pretty much nail everyone who ever used crypto for a transaction and failed to pay or collect taxes on it, failed to get a business license, violated interstate trade laws, and so on and so forth. Hire that migrant to build your fence and pay in crypto? Yeah, you're toast, +fines and interest.

And that is why it would be the end of crypto.

 

[Bomby569]

Of course. But that means the exchanges can't exist without destroying the things that make crypto worth owning (vs fiat) in the first place. In fact, fiat would have a distinct advantage.

Once a regulator gets the crypto exchange under their regulatory power, they can get the customers, and their wallets. Then not only can they see all future transactions, but by its nature (blockchain) they can also see all past transactions.

This of course is a wet dream for regulators. Not only can they nail people currently engaged in nefarious activities, they can look into the past and pretty much nail everyone who ever used crypto for a transaction and failed to pay or collect taxes on it, failed to get a business license, violated interstate trade laws, and so on and so forth. Hire that migrant to build your fence and pay in crypto? Yeah, you're toast, +fines and interest.

And that is why it would be the end of crypto.

I don't understand your logic. They can already seize crypto assets, there's the ledgers, and you can regulate things like minimum ratios that will help the industry.
The fact that they regulate banks doesn't mean they can take your money. They can take your money but it has nothing to do with the regulation, they could/would do it even if they were deregulated. Those are even done by different government agencies/bodies. I'm not exactly inside this, in the US but SEC regulates, the law takes care of the rest.

If your talking about having to detail customer assets to the goverment, that is already happening in most places for tax purposes.

 

[RandallFlagg]

I don't understand your logic. They can already seize crypto assets, there's the ledgers, and you can regulate things like minimum ratios that will help the industry.
The fact that they regulate banks doesn't mean they can take your money. They can take your money but it has nothing to do with the regulation, they could/would do it even if they were deregulated. Those are even done by different government agencies/bodies. I'm not exactly inside this, in the US but SEC regulates, the law takes care of the rest.

If your talking about having to detail customer assets to the goverment, that is already happening in most places for tax purposes.

If you just have a wallet (key), and crypto associated with that key, they cannot 'seize' your crypto. They have to get ahold of your wallet to do that. If you use an exchange, you don't have the keys, not your crypto and yes they can seize that by seizing the exchange since they generally know where/who they are.

 

[lexluthermiester]

If you just have a wallet (key), and crypto associated with that key, they cannot 'seize' your crypto. They have to get ahold of your wallet to do that. If you use an exchange, you don't have the keys, not your crypto and yes they can seize that by seizing the exchange since they generally know where/who they are.

This is exactly correct.

 

[Bomby569]

If you just have a wallet (key), and crypto associated with that key, they cannot 'seize' your crypto. They have to get ahold of your wallet to do that. If you use an exchange, you don't have the keys, not your crypto and yes they can seize that by seizing the exchange since they generally know where/who they are.

You were talking about exchanges, and that's to what i replied. My point was regulation doesn't change the things you mentioned: "they can get the customers, and their wallets", they can already do that.
It would improve things like ratios, making sure they are solvent and keep your money and don't run away with it to whatever they fell like doing with it. It would avoid the FTX fiasco.

of course you can keep it off exchanges, just like you can keep fiat under the bed, so the state doesn't get to it, but that's a different story

 

[RandallFlagg]

You were talking about exchanges, and that's to what i replied. My point was regulation doesn't change the things you mentioned: "they can get the customers, and their wallets", they can already do that.
It would improve things like ratios, making sure they are solvent and keep your money and don't run away with it to whatever they fell like doing with it. It would avoid the FTX fiasco.

of course you can keep it off exchanges, just like you can keep fiat under the bed, so the state doesn't get to it, but that's a different story

Most crypto owners have their crypto under the bed. The exchanges never even hit 20%, and now they are down to around 12%.

But this all skirts the point. Crypto's reason for being is a distributed, unregulated, not - centrally controlled currency where freedom is absolute and transactions are anonymous.

If you regulate it, it loses all of that, and actually becomes worse than fiat in all of those regards as a side effect of its blockchain roots given that blockchain records everything and every wallet that bitcoin ever touches.

 

[the54thvoid]

Most crypto owners have their crypto under the bed. The exchanges never even hit 20%, and now they are down to around 12%.

But this all skirts the point. Crypto's reason for being is a distributed, unregulated, not - centrally controlled currency where freedom is absolute and transactions are anonymous.

If you regulate it, it loses all of that, and actually becomes worse than fiat in all of those regards as a side effect of its blockchain roots given that blockchain records everything and every wallet that bitcoin ever touches.


View attachment 271535

Cryptos ideological basis is undermined by the inevitable aspect of human greed and dishonesty. It was doomed from the start and without regulation it can never become a stable currency.

You can still regulate a decentralised system by implementing required checks and balances but every exchange would have to sign up.

 

[Bomby569]

i've said once before somewhere else, this is just like the idea of communism, starts as a utopia, all good intentions, but humans have trouble with it. We need rules or some assholes will take advantage. This unregulated exchanges having "hacks" and problems will never end without regulation.
The idea of an unregulated currency is amazing, in reality it will never work. It goes against human nature

If everyone keeps it "under the bed", this thing is going nowhere. You need the regular people, this can't be just a underground thing, for p2p exchanges. To pay for some shady stuff or to purchase something from your friends.
And i do agree if they regulate it too much then what's even the point, it's another fiat.

And there's already the taxes, don't forget about that, it's almost universal now. The Man wants it's cut.

 

[Vario]

Cryptos ideological basis is undermined by the inevitable aspect of human greed and dishonesty. It was doomed from the start and without regulation it can never become a stable currency.

You can still regulate a decentralised system by implementing required checks and balances but every exchange would have to sign up.

This brings to mind another issue, the idea of decentralization with cryptocurrency is problematic when there are likely large whales that hold the majority of it and manipulate it to their whims.

 

[dragontamer5788]

What do people mean by "Cryptocoin regulation" though? Its so vague. There's a billion regulations out there, and the bulk of them are banking regulations. Are you going to require FDIC insurance on USD-based stablecoins? That sounds stupid.

What bout SEC disclosure regulations upon publicly traded companies? Well, that already exists with Coinbase.

What regulations could possibly exist that can make "cryptocoins" safer, but not turn them into straight up money-market funds (or other tighly regulated securities in the USA, or Europe's, financial system) ? People keep saying the word "regulation" without actually finishing the thought and saying exactly what they plan to regulate at all.

That doesn't even get to the point that a lot of these exchanges (Binance / FTX) are offshore / outside of EU Regulators or USA's regulators grasps anyway. There's probably no way to actually get those "regulated" in practice... unless the Bahamas suddenly want to play the regulation game.

 

[Bomby569]

There are offshore banks in the Bahamas, it's the exact same thing, if they want to do business with US customers there is a set of rules. Offshores are regulated, and can be blacklisted. There is already a system in place. Is it perfect? no, but that's another discussion. Rich people and politians need a place for their money, but that's a feature not a bug. Intentional i would say

Regulate things like having to keep ratios like banks have to, having to keep accurate data and be audit, like banks have to. FTX was just freestyling, they didn't even knew were the money was, they exchanged money with Alameda and between themselves. That would not be possible in any bank.

In my country in 2008 a big bank went down by doing the exact same thing, the bank was also a part of a conglomerate and the banks money went to save the sausage factory and shit like that. It's legislated and it's not possible anymore, banks have to be separated. Just an example.

 

[Vayra86]

Most of the time when I hear about people or organizations avoiding regulations in finance, it is to do shady or risky things that regulation would likely stop or at the very least scrutinize. FTX is a prime example of how that power can be abused, whether intentional or not. Lack of regulation is kind of the same as defunding the IRS, the only people it benefits are the people who are avoiding taxes. Removing regulations and safeguards is no different most of the time. Simply put, people can't be trusted to keep their greed in check.

The regulation you'd want though is one paid for and 'emergent' from the market itself. Clearly, there is no interest in that amongst the userbase or in the dev community. And let's face it, if transactions would carry a cost for using a regulated service, would it survive in that market?

 

[dragontamer5788]

Regulate things like having to keep ratios like banks have to

Okay, so fractional reserve banking? How would that work without a central bank? And as far as I can tell, there would never be a "central bank of cryptocurrencies". Ratio of "what" to "what" needs to be in reserves?

Lets say customers deposit 100 BTC into some ... security, or bank, or entity. The bank lends out 80 BTC to someone else, in return for... what? What is the bank allowed to trade for? Shares? Bonds? Other cryptocoins? Derivatives? Commodities? Futures? 80 BTC worth of FTT tokens? It doesn't matter, its all "not BTC", meaning you open up the bank to market risk. Lets say you trade the 80BTC for US dollars, what happens when BTC skyrockets +20%? Well, your 20 BTC + 66.6 BTC worth of dollars is now insolvent. (86.6 BTC in the vaults, but there are 100BTC deposits you need to return).

Because if its too open-ended, you simply allow the FTT for BTC trade that ruined FTX. There's no entity out there that can "print BTC" like the Fed can print dollars into existence, so there's no central bank whose promises we can rely upon for a fractional-reserve like system. The entire concept falls flat on its face immediately.

A bank sells short-term liquidity to trade for long-term bonds. That is: the $100,000 people put into a USA bank can be traded away for $20k in cash, and $80k in highly rated bonds (ex: a promise that the $80k will come back), likely sometime between 1-week and 12-weeks. Even in a bank-run situation, the central bank can just print money to tide us over until the 4-week bond (or whatever) turns back into cash, and all is well.

The very concept of central reserve banking just doesn't work in the cryptocoin world, because no one can be a reliable printer for BTC to serve as the basis of these promises. The concept of selling short-term liquidity and buying long-term bonds (and skimming off the excess money from that) just doesn't exist in the cryptocoin world yet.