Crypto and HR 3684 - urgent attention needed from all!

[Leeea]

So, the Senate bill passed.

What happens now?

Is Eth toast?

edit:

The US Senate’s infrastructure bill passed with a privacy problem for crypto

The US Senate passed a $1 trillion infrastructure bill on Tuesday with a glaring problem for the cryptocurrency industry. The bill includes vague new tax reporting requirements that digital rights activists say threaten individual privacy and crypto advocates say could hamstring industry...

qz.com

The bill’s authors focused on closing the crypto “tax gap” to pay for some of the massive spending plan, but critics say it falls short of appropriately regulating the budding industry. The bill requires any crypto “broker,” defined as anyone “responsible for and regularly providing any service effectuating transfers of digital assets on behalf of another person,” to report users’ names and addresses. That leaves all sorts of players in the crypto space including miners and software developers on the hook

It seems like a win, but might not stick through congress.

I wonder when it will go in effect? I was thinking about sending in the robots tomorrow to try and buy a 6600xt off of amd.com at msrp, but it suddenly seems like a bad idea.

 

[thilanliyan]

No.

If a network has a legitimate use, people will use it for that. For example, we do not require a ponzi scheme to operate the internet - it is operated and maintained because it has actual use. If blockchain networks require a ponzi scheme to maintain viability, that indicates they have no legitimate use as of right now.

Running the internet doesn't just happen does it? It needs servers, networks, etc to run which companies and we pay for. In the case of ethereum for example, it IS like another "internet" in that those "servers, networks, etc" is the blockchain and we pay for it with the transaction fees. Or devs pay to use the ethereum "internet" for their smart contracts. I don't think you equating that to a ponzi scheme is correct. Some networks (eg. ethereum) have people running smart contracts or "programs" on them for something useful, so that is what the mining rewards are paid for, it's not just for existing. I'll agree with you that a lot of coins are sketchy (and probably scams), but not ALL of them.

Cryptocurrency has no use as a currency in any way that benefits society and I see no reason to believe it ever will. There is nothing it does better than actual currency other than enable people to commit crimes. While I agree that facilitation of crime is something that lends some value to cryptocurrency, there's also no reason society should accept this.

IIRC around 2014 the Argentinian gov't was limiting people from buying USD as their currency was inflating badly. As such people there turned to bitcoin to hold their wealth. Just an example of it being useful.

As for criminality, I may have missed it, but do you have any links that show crypto is used mostly for criminal activity?

 

[kage69]

Over 97% of illicit activity on the darknet has been conducted through Bitcoin over the years

If the environmental and crime parts can't be remedied, then I can't get behind it myself, certainly not with this much fraud and theft connected to it. Also uncomfortable with how it could enable the entrenchment of corrupt governments, give them something to take the bite out of richly deserved sanctions.

 

[fskimospy]

Running the internet doesn't just happen does it? It needs servers, networks, etc to run which companies and we pay for. In the case of ethereum for example, it IS like another "internet" in that those "servers, networks, etc" is the blockchain and we pay for it with the transaction fees. Or devs pay to use the ethereum "internet" for their smart contracts. I don't think you equating that to a ponzi scheme is correct. Some networks (eg. ethereum) have people running smart contracts or "programs" on them for something useful, so that is what the mining rewards are paid for, it's not just for existing. I'll agree with you that a lot of coins are sketchy (and probably scams), but not ALL of them.

The blockchain is run on severs and networks that were bought overwhelmingly with real money. When you do work to create a coin you do so with electricity that costs real money. If the blockchain is useful you could just sell its work for real money.

Like I said before, saying these coins pay for themselves by selling the coins they create is essentially just creating Itchy and Scratchy money. It’s just like regular money but less useful.

IIRC around 2014 the Argentinian gov't was limiting people from buying USD as their currency was inflating badly. As such people there turned to bitcoin to hold their wealth. Just an example of it being useful.

Were they unable to buy any other currency? If so, Bitcoin didn’t add anything. Also, anyone buying Bitcoin to hedge against inflation is taking an enormous risk. After all, this year alone Bitcoin has seen inflation of 40% in the last four months, which if it continued at that rate would mean 120% inflation year over year. Argentina peaked at 30%.

As for criminality, I may have missed it, but do you have any links that show crypto is used mostly for criminal activity?

Sure:

https://www.nytimes.com/2019/06/11/technology/online-dark-web-drug-markets.html

As I mentioned earlier Bitcoin is also the preferred form of payment for all those ransomware attacks we have had recently. If we banned crypto transactions we would probably see a lot of that crime go away.

 

[DisarmedDespot]

Adding onto the crypto and ransomware connection, crypto is really the only way these things are possible. There's only two other ways to transfer that amount of funds.

• Bank transfers? They're heavily regulated and the old Swiss bank account schemes don't work anymore. They're also easily found by regulators and closed down.
• Cash? Five million dollars in $100 bills is well over one hundred pounds in two suitcases, that's not easy to smuggle internationally across an ocean, completely ignoring the fact you need a middleman who won't just disappear with it. And there's been bigger ransoms as well!

 

[digiram]

Honestly. This is a good thread. I’m learning lots about the pros cons useful and uselessness of crypto.

 

[Lost_in_the_HTTP]

CryptDevil still at it?

 

[MrSquished]

Stablecoins!?!

And oh look - you can lend your USDC directly (fully backed 1:1 unlike Tether - which I will agree needs to go) from your hardware wallet without third party for true market rates! https://defirate.com/ (Compounds, dydx). Or you can keep your dollar in your bank where it earns 0.01% interest. Oh and when Bitcoin was pushing $50-60K, the demand for loans was high, those lending rates were as high as 10-30%. Free market.



Again you don't understand because you never did your research. I can full on tell from both of your responses. How much time did you spend trying to read into and understand really understand all of this? 20 minutes?

You are not likely to have blockchains without some currency or form of payout, because the infrastructure costs money to setup and run and do the work required to keep it secure. It's a built in rewards mechanism, and now the "rewards tokens" such as Bitcoin and Ethereum have become valuable because the networks are valuable, and you need them to keep processing and paying for transactions. Call it "cryptographically secure rewards tokens" if that sounds more friendly to you than "cryptocurrency".

Oh and you know what else is actively harmful? The internet. So let's ban it too, since people are still falling for Nigerian scam emails or getting phished some other way. Or forming groups of conspiracy theory groups on social media to push their agenda causing a complete failure of pandemic response, etc.

The internet is not a currency. You don't say, I'm going to buy that car with internet. He said Blockchain is good as a tech, but crypto is bad as a currency.

What are you even talking about.

 

[thilanliyan]

Sure:

https://www.nytimes.com/2019/06/11/technology/online-dark-web-drug-markets.html

As I mentioned earlier Bitcoin is also the preferred form of payment for all those ransomware attacks we have had recently. If we banned crypto transactions we would probably see a lot of that crime go away.

Maybe I misunderstood your original claim. FOR criminal activity yeah I can see how the preferred form of payment is crypto.

However, you said there is no other use for crypto than criminal activity. So there must be stats that show the majority of ALL crypto transactions are used for criminal activity? That's what I was asking for links to. If only 3% or 5% (or whatever number it is) of crypto transactions are for criminal purposes, then the majority of it is still legit (ie. the dark web is not ALL of crypto transactions).

 

[thilanliyan]

Over 97% of illicit activity on the darknet has been conducted through Bitcoin over the years

If the environmental and crime parts can't be remedied, then I can't get behind it myself, certainly not with this much fraud and theft connected to it. Also uncomfortable with how it could enable the entrenchment of corrupt governments, give them something to take the bite out of richly deserved sanctions.

The darknet does not encompass ALL of the crypto space, in fact since Silk Road and the likes have been taken down it's a smaller percentage than it used to be.

 

[dank69]

Maybe I misunderstood your original claim. FOR criminal activity yeah I can see how the preferred form of payment is crypto.

However, you said there is no other use for crypto than criminal activity. So there must be stats that show the majority of ALL crypto transactions are used for criminal activity? That's what I was asking for links to. If only 3% or 5% (or whatever number it is) of crypto transactions are for criminal purposes, then the majority of it is still legit (ie. the dark web is not ALL of crypto transactions).

I think the claim is that there are no legitimate uses where it works better than other currencies. Yes, you can use it legitimately but it doesn't have an advantage over USD for example.

 

[kage69]

The darknet does not encompass ALL of the crypto space, in fact since Silk Road and the likes have been taken down it's a smaller percentage than it used to be.

Not implying or saying that it does, more of an interjection on just how significant crypto is to criminal and state groups. That article goes out of it's way to identify crypto as useful and not inherently bad, and I agree with that.Taking down Silk Road was great, but vacuums apply to commerce, not just power. Entrepreneurial incentive for vendors doesn't vanish when a marketplace gets taken down. I don't think the percentage argument holds up well myself, it only takes one bad actor or group to hijack and ransom something crucial or popular for tens of millions, like we just saw with fuel pipelines or meat production ransoms. A small percentage of millions of users around the global still racks up as a digit to worry about, especially as that group grows in size the more it has success. Things like Monero with emphasized privacy will likely aid in that.

 

[thilanliyan]

I think the claim is that there are no legitimate uses where it works better than other currencies. Yes, you can use it legitimately but it doesn't have an advantage over USD for example.

Crypto is in its infancy at this point. I'm sure there were no "better" uses for the internet than pr0n way back.

I am all for people not dodging taxes on crypto as that helps legitimize it. Currently there ARE rules for reporting by the tax authorities in many countries, it's not the wild west anymore. It's just the implications of this bill that are the issue.

 

[fskimospy]

Maybe I misunderstood your original claim. FOR criminal activity yeah I can see how the preferred form of payment is crypto.

However, you said there is no other use for crypto than criminal activity. So there must be stats that show the majority of ALL crypto transactions are used for criminal activity? That's what I was asking for links to. If only 3% or 5% (or whatever number it is) of crypto transactions are for criminal purposes, then the majority of it is still legit (ie. the dark web is not ALL of crypto transactions).

No, I’m saying there’s nothing crypto does better than regular currency except for crime, and it facilitates crime to a significant extent as shown by recent ransomware attacks.

Most people who currently use crypto are either enthusiasts who use it because they can, or are speculators and so are just trading it. If people can show me something crypto does better than regular currency I’m open to hearing it, but again outside of crime I’ve never seen it. As shown, Bitcoin isn’t a good store of value because it’s wildly unstable. It isn’t good for trade because transaction costs are enormous. It’s just bad at essentially everything except for anonymity. What’s anonymity’s killer app? Crime.

 

[Lost_in_the_HTTP]

Crypto is in its infancy at this point. .

I can hold a ten dollar bill in my hand.

Can you hold ten dollars worth of vapor in your hand?

 

[thilanliyan]

No, I’m saying there’s nothing crypto does better than regular currency except for crime, and it facilitates crime to a significant extent as shown by recent ransomware attacks.

Most people who currently use crypto are either enthusiasts who use it because they can, or are speculators and so are just trading it. If people can show me something crypto does better than regular currency I’m open to hearing it, but again outside of crime I’ve never seen it. As shown, Bitcoin isn’t a good store of value because it’s wildly unstable. It isn’t good for trade because transaction costs are enormous. It’s just bad at essentially everything except for anonymity. What’s anonymity’s killer app? Crime.

Okay, I see your point now. And thanks to dank69 for pointing it out also.

As I mentioned, crypto is still fairly new, so I don't think we have really seen it used properly yet, especially "useful" networks like ethereum or cardano. I really don't know one way or the other whether crypto will die or survive, and at this point it won't really affect my life. However, considering its infancy, IMO it should not be stifled.

 

[thilanliyan]

I can hold a ten dollar bill in my hand.

Can you hold ten dollars worth of vapor in your hand?

Yes, there are debit cards you can put crypto on.

What's your point?

 

[Lost_in_the_HTTP]

Yes, there are debit cards you can put crypto on.

What's your point?

Plastic is not U.S. Currency.

 

[thilanliyan]

Plastic is not U.S. Currency.

They can be used to purchase goods. So what's the difference?

 

[DisarmedDespot]

Crypto is in its infancy at this point

Nah, crypto's twelve years old at this point. It's an inefficient old tech that should've been abandoned by now.

 

[Fenixgoon]

They can be used to purchase goods. So what's the difference?

One has a relatively stable value, a host of financial protection mechanisms, and is backed by the most powerful country on the planet

The other is a speculative currency that has only continued to rise in value (so why would anyone trade away their BTC) and is backed by..."the internet" if/until someone controls 50+1% of the network?

 

[thilanliyan]

One has a relatively stable value, a host of financial protection mechanisms, and is backed by the most powerful country on the planet

The other is a speculative currency that has only continued to rise in value (so why would anyone trade away their BTC) and is backed by..."the internet" if/until someone controls 50+1% of the network?

No argument there about its instability. That will prevent any widespread adoption. My only point was that it can be used to purchase goods like normal currency can.

 

[darkswordsman17]

One has a relatively stable value, a host of financial protection mechanisms, and is backed by the most powerful country on the planet

The other is a speculative currency that has only continued to rise in value (so why would anyone trade away their BTC) and is backed by..."the internet" if/until someone controls 50+1% of the network?

Er, you know he said what's the difference between a debit card and cash, right?

I'm pretty sure you'd have to convert the cryptocurrency to USD (or other currency depending on the issuer of your debit card). So that's how I read that, you convert crypto to other currency and you can buy real things with it.

 

[SMOGZINN]

If people can show me something crypto does better than regular currency I’m open to hearing it,

First off, I would like to say that I am NOT defending crypto currency. I personally think it is more harmful then helpful, but having said that it has some purpose.
The main advantage to crypto is anonymity, and while that has some very obvious advantages for criminal activity, there are non-criminal reasons to want money to be anonymous.
Maybe less so in the United States then in places like Russia and China, but being able to move money anonymously is useful for things like political dissidents.

 

[Fanatical Meat]

First off, I would like to say that I am NOT defending crypto currency. I personally think it is more harmful then helpful, but having said that it has some purpose.
The main advantage to crypto is anonymity, and while that has some very obvious advantages for criminal activity, there are non-criminal reasons to want money to be anonymous.
Maybe less so in the United States then in places like Russia and China, but being able to move money anonymously is useful for things like political dissidents.

This is a very good and simple to understand point.
Thank you sir for being the first one to answer the question what long term benefit does crypto bring