A Hideous Monstrosity Made Out Of Computers And Greed
June 30, 2022 3:27 AM   Subscribe

Bitcoin Is A Hideous Monstrosity Made Out Of Computers And Greed That Must Be Destroyed Before It Devours The World, Part I. On the final day of the first third of the 6th month of Our Year Of The Coin 13 (2022 C.E.) a mysterious account named Michel de Cryptadamus appeared on Twitter bearing a prophecy given to him by The Oracle of Tulips foretelling cryptocurrency's end of days that he had recently inscribed into the hard stone of r/Buttcoin. The redditors of r/Buttcoin, long used to playing the part of modern society's Cassandras, with memes in place of their forebear's mantic verse, watched in amazement as these predictions began to come true.

Incredible things began to happen. Within a week three massive deka-billion dollar "crypto" versions of a bank, a hedge fund, and an institutional lender had imploded in rapid succession. Cryptadamus explained the economic connections between these events. Long running but unnoticed signs of ruination were called out in posts and long mathematical analyses. Major business publications wrote serious articles about an internet thing called r/Buttcoin because there was seemingly more newsworthy financial activity on the internet than on Wall St.

Yesterday the mystery of how "Bitcoin Jesus" Roger Ver had finally been called to account by the demon he sold his soul to (or at least by a man named Mark Lamb) was revealed to the faithful. Cryptadamus's Cryptocalypse Chronicles had recently honed in on events surrounding CoinFLEX, a little known but particularly demonic cryptocurrency exchange that had recently told its depositors that all their money had gone missing. Lamb, the CEO of CoinFLEX, made an appearance on Bloomgerg TV clearly convinced of the idea that he could pull off one more tokenized money grab right on live TV. He proceeded to tell the world that Roger Ver, described by Lamb as a "high-integrity individual", had completely blown himself up on a bad trade. Roger Ver countered with a tweet. Both of their performances were so utterly devoid of a shred of concern for the $80-200M of less fortunate people's money they seemed to be fighting over instead of returning it to its frantic owners that it may be remembered as a watershed moment in the final run of this long and grifting road.
posted by UlfMagnet (129 comments total) 48 users marked this as a favorite
 
Other incredible things witnessed included the spectacles of the first bankrun in North America in 91 years being conducted entirely on the internet, a river otter engaging a deka-billion dollar crypto bank possibly run by the Bulgarian mafia in a social media duel to the death, the appearance of the VP of a large tech startup in a huge doxxing of mishandled funds, and the miraculous resurrection of the otter.
posted by UlfMagnet at 3:52 AM on June 30 [2 favorites]


... and remember, folks, they're called BUTTCOIN, because that's where they come from, and that's where they need to be inserted.
posted by Termite at 3:56 AM on June 30


Is crypto finally over? I dunno, have we run out of suckers yet?
posted by rikschell at 4:01 AM on June 30


Is crypto finally over? I dunno, have we run out of suckers yet?

There’s an ad currently running at night on a few cable channels, touting an investment app called Public. The ads feature attractive, hip, 30-somethings talking about how easy the app makes investing. They make sure to tell you that you can invest in crypto through the app. One ad even had the hip young woman speak to how “women, and women-of-color” should get in on this.

The visuals always include a screen showing a listing for Bitcoin or Etherium and the impressive five-figure value of that person’s investment in the shitcoin, which is always far more than the figure shown for the traditional investments like stocks. The subtle message there is “see how much more you can make in crypto?” without the necessary explanation about how it’s not really worth that, and you’ll never get that huge amount out of it.

No, it’s not over. It’s just shifted the target from early-adopters and techbros to young people just starting their financial lives.
posted by Thorzdad at 4:19 AM on June 30 [34 favorites]


When this is all over and the recession has fully kicked in someone is going to have to do the numbers and figure out how much all that money evaporating caused the decline of the wider economy
posted by mbo at 4:29 AM on June 30 [7 favorites]


people may want to go check out what's happening to the price of bitcoin right now
posted by UlfMagnet at 4:39 AM on June 30 [5 favorites]


people may want to go check out what's happening to the price of bitcoin right now

As a long-time crypto hate-watcher, I advise, don’t take today’s crash too seriously yet. I thought we were finally over the madness the other week, last time it got down to around 19k, but then it managed to rally back to 21k at least for a little while before coming back down.

I want it to die. I hope this is it, finally, this time. But it might still take a while.
posted by notoriety public at 4:46 AM on June 30 [16 favorites]


This makes me so happy.
posted by seanmpuckett at 5:03 AM on June 30 [5 favorites]


I too hope for the fiery and painful death of all PoW crypto.

Remember, tho' the etymology of 'Credit' ultimately returns to latin: "the past participle of credere ‘believe, trust'".

(Sadly, IMHO) The ultimate value of things is what people believe them to be. Shared illusions can go a LONG way.
posted by lalochezia at 5:18 AM on June 30 [4 favorites]


We don’t need no water, burn faster, etc etc.
posted by Slackermagee at 5:19 AM on June 30


I too hope for the fiery and painful death of all PoW crypto.

Proof of Stake, or whatever other cockamamie scheme of proof, are absolutely flawed as well. The existing banking system is, effectively “proof of stake” as well. But with crypto, it’s “proof of stake but without even the oversight and regulation the existing system has (and it doesn’t have enough).

My expectation, following whatever degree of collapse happens, is that the PoS systems, following the demise of Bitcoin, should they survive in any meaningful sense, will be so concentrated in the hands of a small group, that they will be fiat currencies in exactly the same sense as any other fiat currency. Except without any regulation or oversight.

There are no good cryptocurrencies. None. The entire field of endeavor needs to die in a fire.
posted by notoriety public at 5:27 AM on June 30 [42 favorites]


Sorry- should have added, “but without any regulation or oversight, or attachment to any real economy providing any real-world goods or services to back up the value of the fiat”.
posted by notoriety public at 5:30 AM on June 30 [1 favorite]


The thing that makes fiat currencies work is that people with guns insist you pay them with it in exchange for not depriving you of your life/freedom. That's what fiat means: "because I say so." You may say that's a grossly reductive misrepresentation of "government" and "taxes" but it really isn't. It wouldn't work at all if at the base of it the government wasn't the one a) making a money and b) demanding payment with that money c) or else. I leave extrapolating the failure of cryptocurrency as a direct result of the lack of guns as an exercise to the reader.
posted by seanmpuckett at 5:46 AM on June 30 [4 favorites]


Is crypto finally over? I dunno, have we run out of suckers yet?

"Two things are infinite: the universe and human stupidity; and I'm not sure about the universe." -- Albert Einstein (attributed)
posted by CheeseDigestsAll at 6:05 AM on June 30 [5 favorites]


@seanmpuckett: ironically, Bitcoin has been the refuge of a gaggle of wannabe Libertarians, a group that, in my experience, has no lack of guns.

Same as it ever was.
posted by JustSayNoDawg at 6:09 AM on June 30 [2 favorites]


I have been watching Bitcoin since it's beginning and I must admit an unhealthy interest in seeing it fail. Sadly, I do not think Bitcoin is ever going to go away completely - in 20 years there will still be some weirdos running nodes in their basements, but Bitcoin as an industry is someday going to collapse or mutate into something else as it is seized away from the techno-libertarians by the finance-libertarians.

Is this the final collapse into irrelevancy? Probably not. But the smart money is pulling back and the dumb money is drying up as the economy wobbles.
posted by AndrewStephens at 6:14 AM on June 30 [5 favorites]


>decline of the wider economy

"market cap" is the product of two numbers, not money per se even tho it is denominated in dollars.

GFC saw at least $6T of housing valuation evaporate.

Crypto topped out at $2.4T in "market cap".

What really made the 2007-2010 housing crash hurt was the economy lost the main driver that pulled us out of the 2001-2002 dotcom recession; America had doubled its rate of borrowing, from 5-10% of incomes to 10-15% each year during the Bush Bubble. When that stealth stimulus of cash-out refis and home construction activity stopped dead, so went the wider economy.

I expect crypto flaming out will have an order of magnitude less hit to the wider economy than the GFC, just a loss of marginal froth really. . . . S&P 500 has lost ~$8T in market cap thus far I reckon . . . Q2's -16% was pretty brutal given that profits are holding up and layoffs are still light.
posted by Heywood Mogroot III at 6:19 AM on June 30 [5 favorites]


> I expect crypto flaming out will have an order of magnitude less hit to the wider economy

This is the one sliver of good news. With a few exceptions, big institutions are not exposed to crypto in significant amounts. If crypto stays down, the financial system will shrug and move on.

The big losers are going to be the hundred's of thousands of relatively small HODLers. Reddit is fill with idiots bragging about finally owning quarter of a bitcoin after buying small amounts for 8 months. That money is gone.
posted by AndrewStephens at 6:30 AM on June 30 [5 favorites]


The gun-boner fantasy is a classic crypto dodge. Aside from all its other structural idiocies, crypto is not failing because of government interference or insufficient bullets. Crypto is failing because currencies are communities, and the crypto community has welcomed bad actors with open arms since day one.

If your community does not account for or have a plan for handling bad actors, honest members will get taken advantage of. In a social context, they'll leave. In a financial context, they'll lose their money to scams.

Crypto came with an rotten premise, which was "we don't need any social or regulatory norms, because the code will take care of that for us". It did, though, and crypto might have had a chance if the community was able to recognize that. By the time the lambo hodlers arrived, though, it was pretty much too late.

I am a fan of alternative currencies, but they need a community of people committed to making it work, not just enriching themselves.
posted by phooky at 6:35 AM on June 30 [22 favorites]


I don't expect crypto to ever completely die, much as I might want it to. It took me a while to admit that it served a purpose: it's a way of engaging in (large) remote illegal transactions. Ransomware and online illicit good markets need it.

But that's it.
posted by booooooze at 6:38 AM on June 30 [5 favorites]


Bitcoin and its ilk illustrate that a) no one pays attention to history, b) you can sell anything if you cloak it in a sufficient amount of tech jargon, and c) never underestimate humanity's greed.
posted by tommasz at 6:41 AM on June 30 [1 favorite]


The other issue with crypto is that proof-of-work is an absolutely demented measure of value that makes no sense. If we understand money of the conventional kind as either a resource in and of itself (gold, silver, glass beads, etc.) or as a stand-in for a resource (cash money, credit cards), then proof-of-work is fundamentally a measure of consumption of resources rather than a store of them.

It's like if I tried to sell you a box of burned matches with the idea that I had somehow unlocked their "true value" by striking each one, watching it burn, and then putting it back into the box. It's so backwards that it has to be a scam.
posted by Strange Interlude at 6:45 AM on June 30 [38 favorites]


via r/buttcoin:
Web 2.0: If you aren't paying for the product, YOU are the product
Web 3.0: If you can't figure out where the yield comes from, YOU are the yield
posted by gwint at 6:48 AM on June 30 [62 favorites]


Who would have guessed a marketplace advertising "large amounts of untraceable money moved in an unregulated place" might be a bestseller for the crime crowd?
posted by ptfe at 6:48 AM on June 30 [3 favorites]


I mean, while I'm glad to see the scam parts of crypto (i.e. most of it) flame out, it's not like regular folks trying to invest or just stay afloat had anywhere else to go once The Everything Bubble started to pop. Nasdaq has slid down 35% in the same time (Nov '21 until now) that crypto started freefalling. S&P500, bonds, now finally housing, all down. Money under a mattress? Down thanks to inflation. Seems like there's only one place where things are going well... corporate profits.
posted by gwint at 6:56 AM on June 30 [7 favorites]


> That money is gone transferred as if via debit card.
posted by Heywood Mogroot III at 6:57 AM on June 30


currencies are communities

speaking of which, I've been having fun pushing spare $ into a yen-denominated account. Yen continues to crash, I buy more woo-hoo; recovers, I've made some free spending money for my next trip to Japan.
posted by Heywood Mogroot III at 7:01 AM on June 30


the crypto community has welcomed bad actors with open arms since day one.

that is true. lots of the free marketing and PR that is social media would be one community around one coin declaring to be both savior and judge literally calling for the demise of other coins and its investors.

crypto is literally a bundle of the shit human behaviors packaged behind an alias.
posted by NoThisIsPatrick at 7:05 AM on June 30 [2 favorites]


Second order effects:

Did I make it harder to sell your crappy, used crypto mining graphics card? Good.
So now that the crypto bubble has popped and everyone is scrambling to sell the graphics cards they spent thousands of dollars on in an attempt to break even, some did not take kindly to my suggestion that the best possible outcome is that crypto miners get absolutely soaked.
posted by zamboni at 7:07 AM on June 30 [21 favorites]


I see no reason for any of these horrible ideas to fail, given the arguments presented here.

Crypto is failing because currencies are communities, and the crypto community has welcomed bad actors with open arms since day one.

In hindsight, this is not a bad description of the US judicial and legislative bodies.
posted by elkevelvet at 7:08 AM on June 30 [4 favorites]


"large amounts of untraceable money moved in an unregulated place" might be a bestseller for the crime crowd?

That's kind of the irony of Satoshi's invention.

As described in his white paper, Bitcoin is 100% traceable, unlike cash. Every single transaction is recorded publicly on the blockchain for all to see. In theory, it's hard to steal (how would the thief manage to launder it?), and even harder for criminals to use. It's perfectly regulated, because the system is democratically self regulating by voting.

Of course, the reality was that a complicated ecosystem of unregulated exchanges sprung up, so once bitcoin enters the exchange no one outside the exchange can trace it anymore... and now, instead of being immune to being used for criminal purposes, Bitcoin is PRIMARILY used to buy drugs on the internet.

Instead of fiat money - where at the whim of the central bank, they could print trillions of dollars if they wanted and destroy the value of your money (see Zimbabwe or to a lesser extent QE) - Bitcoin was in theory a far more stable store of value because its quantity in circulation grows at a perfectly controlled rate.

Instead, Bitcoin became the object of massive speculation for profit which has seen extreme volatile swings in its value...

Satoshi would be rolling in his grave, but eh, he disappeared soon after writing his white paper, which I guess is a pretty good exit strategy.

Imagine if Elon Musk grew Tesla and Space-X into hugely successful companies worth trillions of dollars, then gifted all his shares to his workers, and then vanished and changed his name and identity and kept maybe a billion dollars to try start a new business.
posted by xdvesper at 7:10 AM on June 30 [6 favorites]


I might buy bitcoin if it drops below $1. I might even buy two of them.
posted by dances_with_sneetches at 7:17 AM on June 30 [6 favorites]


Satoshi would be rolling in his grave, but eh, he disappeared soon after writing his white paper

No, the NSA is still around.
posted by star gentle uterus at 7:18 AM on June 30 [3 favorites]


MetaFilter: Let me interject that I only really consume media about how humanity is a train wreck.

Yeah, this writer is pessimistic...but also, I believe, entirely correct. And what I think I hate most is the way that proof-of-work coins are created: the requirement to own one or many new and high-performing computers -- in order to, de facto, exclude most ordinary people. It's just so fucking smug.
posted by wenestvedt at 7:20 AM on June 30 [5 favorites]




A couple searches reveal that while over 100 million people own some (fractional?) BTC, only about 16,000 own over 100 BTC. If those coins were acquired before 2009, their value (and thus their power to manipulate) has inflated over 140,000%.
posted by CheeseDigestsAll at 7:28 AM on June 30


'Tis an ill wind that doesn't blow some good department: The director Lexi Alexander is of Palestinian descent, and has experience with refugees from unstable and kleptocratic regimes using Bitcoin as the only way to keep their money safe and portable. From that perspective, she sees crypto as an unalloyed, matter of life or death, good. Good luck convincing her that anti-crypto sentiment isn't based on First World privilege.
posted by whuppy at 7:32 AM on June 30


Part of me is glad to see that crypto is maybe, finally collapsing under the weight of its own scam...part of me is scared for all the folks who have invested and are losing a lot. One of my neighbours, a great guy, lost all of his savings some years back in a complicated investment scam that some "friends" of his ran on him; he let me know last week that he had taken some of what he's been able to regain since then and invested it into crypto. Lots of regular people going to get hurt in this.
posted by nubs at 7:42 AM on June 30 [2 favorites]


'Tis an ill wind that doesn't blow some good department: The director Lexi Alexander is of Palestinian descent, and has experience with refugees from unstable and kleptocratic regimes using Bitcoin as the only way to keep their money safe and portable. From that perspective, she sees crypto as an unalloyed, matter of life or death, good. Good luck convincing her that anti-crypto sentiment isn't based on First World privilege.
whuppy

Could you provide some links regarding this? I'm having trouble finding any information on this claim.

I've seen this "actually, Bitcoin is good for the poor" angle, but it strikes me as the most cynical, cruelest crypto boost angle of them all. How are these refugees dealing with the wild pice swings that would completely wipe out the value of their holdings? How are they actually using that Bitcoin to get their basic needs met? Are they somehow finding food and housing that they can pay for purely in Bitcoin? If not, that means they're dealing with exchanges or finding someone to convert Bitcoin into local currency: how are they avoiding the endless scams and thefts endemic to this process?

They seem like exactly the kind of people most vulnerable to crypto manipulation and grifts...which is probably why crypto boosters want to rope them in.
posted by star gentle uterus at 7:47 AM on June 30 [35 favorites]


'Tis an ill wind that doesn't blow some good department: The director Lexi Alexander is of Palestinian descent, and has experience with refugees from unstable and kleptocratic regimes using Bitcoin as the only way to keep their money safe and portable. From that perspective, she sees crypto as an unalloyed, matter of life or death, good. Good luck convincing her that anti-crypto sentiment isn't based on First World privilege.

In the meantime, cryptocurrency's carbon footprint will directly (in the form of pollution from coal plants) and indirectly (in the form of climate change) contribute to the deaths ~18,000 people per year, a disproportionate number of whom will be poor and oppressed. Add in cryptocurrency's key role in the multi-billion dollar ransomware industry and cryptocurrency completely fails any kind of utilitarian analysis.
posted by jedicus at 7:50 AM on June 30 [29 favorites]


From that perspective, she sees crypto as an unalloyed, matter of life or death, good.

Lots of people see crypto as an enabling technology, and they are mistaken, because they are wrong about what it is: at its heart, it is a very complicated confidence scam, because it represents value destroyed but everyone involved has a vested interest in representing it as value being created. It is exactly as reliable as pets.com.

(Many people have told me that they don't care for crypto, but "the blockchain" is an interesting idea, and it's the same bait and switch there too. The "blockchain" requires a cryptocurrency to deliver a shared, public, untrusted datastore, and that cryptocurrency requires speculation in an inherently worthless asset to compensate for the value destroyed.)
posted by Merus at 7:52 AM on June 30 [16 favorites]


Bitcoin is a cruel and shallow money trench through the heart of the investment industry, a long plastic hallway where thieves and pimps run free and good men die like dogs, for no good reason” – Hunter S. Thompson
posted by Lanark at 7:56 AM on June 30 [5 favorites]


From that perspective, she sees crypto as an unalloyed, matter of life or death, good. Good luck convincing her that anti-crypto sentiment isn't based on First World privilege.

It's an unalloyed good until your money disappears.

She should be more mad than anyone about the eternal pump and dumps of Bitcoin prices, the collapse of one stablecoin (UST), how the entire shaky edifice is currently founded on "Tether," which amounts to a wildcat bank that could well collapse in the short term, and how small-time crypto holders are being set up as the bagholders of last resort.

People are happy to see this whole ecosystem blow up because if it doesn't blow up now, it will blow up later, screwing even more people as it goes. The best time for Tether et al to implode was a few years ago; the second-best time is now.
posted by BungaDunga at 7:57 AM on June 30 [13 favorites]


Strange Interlude: "It's like if I tried to sell you a box of burned matches with the idea that I had somehow unlocked their "true value" by striking each one, watching it burn, and then putting it back into the box. It's so backwards that it has to be a scam."

Brilliant.
posted by adamrice at 8:02 AM on June 30 [3 favorites]


Buttcoin is my new favorite place on Reddit.

After a big dip in price….Me, entering r/buttcoin this morning
posted by hwyengr at 8:05 AM on June 30 [2 favorites]


No, the NSA is still around.

I don't believe Bitcoin was an NSA (or CIA) thing because it's just too stupid. Professional cryptographers would laugh anyone proposing it right out of the meeting room.

Say what you will about NSA, but from what I've seen of their code and solution design, it's usually pretty elegant. Bitcoin is anything but. (Heh, butt.)
posted by Kadin2048 at 8:06 AM on June 30 [3 favorites]


How are these refugees dealing with the wild pice swings that would completely wipe out the value of their holdings?

For a while, you could 1) hold stablecoins, which are supposed to trade 1-for-1 with dollars, and 2) bitcoin mostly went up, or at least wasn't constantly plummeting like the Lebanese pound. At least Bitcoin seemed to have some potential upside! Depending on when you bought bitcoin, you might well still be in a better place than if you'd kept your money in Turkish lira (which has done nothing but drop in value against the dollar since 2008). Volatility might seem like a good tradeoff against guaranteed erosion.

Unfortunately, the stablecoins are rapidly turning out to be not as stable as supposed, and as various bad bets unwind the bitcoin price is crashing too. Bitcoin crashing is bad, but if Tether goes under you'll see a lot of accounts snap straight to zero. At least you can sell Bitcoin on the way down; stablecoins are liable to just collapse all at once.
posted by BungaDunga at 8:08 AM on June 30 [1 favorite]


but Bitcoin as an industry is someday going to collapse or mutate into something else

the company that I work for, which is a very large, S&P 100 company that's done a few multi-billion $ acquisitions in recent times, has, in its infinite wisdom, decided to start investing/working with crypto

at the last company all hands, the employee Q&A were full of people asking 'hey what the hell' and 'this is at best a bad idea and at worse incredibly unethical and not in standing with our vaunted principles of environmentalism and not being shady pieces of shit' - comments which were promptly ignored by leadership who obviously are not the kinds of people who give a single shit even as they perform their little 'I'm just like you' routine on Zoom inside of their mansions kept clean by people who are paid less than a living wage

crypto, as an industry, will be and currently is being cannibalized and absorbed by existing capitalist institutions that have and will forever be trying to wiggle out of any kind of regulatory oversight that keeps them from maximizing how exploitative they are. it's cool crypto/techno libertarians are gonna lose out from this - I think that's hilarious and good schadenfreude. what's less cool is that it's likely going to get even more dystopian from here on out :)
posted by paimapi at 8:15 AM on June 30 [23 favorites]


I recently learned that North Korea is financing its nuclear program by stealing cryptocurrency.

Which I don't 100% understand, because NK is a dictatorship and money is fungible, so couldn't you as easily say the stolen crypto is funding the Pyongyang International Film Festival?
posted by box at 8:57 AM on June 30 [1 favorite]


Instead of fiat money - where at the whim of the central bank, they could print trillions of dollars if they wanted and destroy the value of your money (see Zimbabwe or to a lesser extent QE) - Bitcoin was in theory a far more stable store of value because its quantity in circulation grows at a perfectly controlled rate.

Until the total number of mined Bitcoins hits 21 million, at which point anybody attempting to use Bitcoin as a currency gets to discover why deflation is every bit as apocalyptic as hyperinflation.
posted by Pope Guilty at 9:13 AM on June 30 [1 favorite]


couldn't you as easily say the stolen crypto is funding the Pyongyang International Film Festival

왜 둘 다 안돼?
posted by 20 year lurk at 9:23 AM on June 30 [3 favorites]


The funniest part of the CoinFlex thing for me is that the new token they're launching to somehow fill the hole caused by the loan default is called rvUSD, with the "rv" ostensibly standing for "Recovery Value". That, however, was before their very public calling out of Roger Ver in which case it became pretty clear what "rv" actually meant. Like, they could have named it anything but they chose this, though it's unclear to me if they knew ahead of time that they were going to reveal that the debtor was Ver or not.
posted by mhum at 9:28 AM on June 30


Crypto is an information attack from a parallel universe. It operates similar to religion. It exploits several loopholes in human psychology, and propagates itself. By nature it is designed to squander resources, enable only instability and speculation, and erode trust in society and institutions such as organized government.
posted by bigbigdog at 9:56 AM on June 30 [18 favorites]


If you're absolutely confident that Bitcoin is dead then short it and make a ton of money.
Imagine how smug you could feel then!
Because surely it's just another stupid useless crypto and all those other 'crashes' were just preludes to this one true crash. It's dead for sure now.... right?
posted by neonamber at 10:05 AM on June 30 [1 favorite]


Wait wait… are you guys telling me that the URL to a randomly generated possibly racist monkey jpeg I bought might not be worth as much as I thought?
posted by misterpatrick at 10:09 AM on June 30 [1 favorite]


Shorting might make financial sense in an honest market, although "irrational longer than you can stay solvent" is always an enormous risk, but it requires an honest market. And honest counterparties!
posted by clew at 10:13 AM on June 30 [11 favorites]


There's a delusion/coping mechanism in the crypto community that people are opposed to Bitcoin because they're not the ones making money. I don't want to make money by shorting Bitcoin. I want the environmental and financial damage to end with as little pain visited on the powerless as possible.
posted by phooky at 10:18 AM on June 30 [44 favorites]


If you're absolutely confident that Bitcoin is dead then short it and make a ton of money.
Imagine how smug you could feel then!


Do you know how you short something? You stump up a bunch of real, actual dollars (or other real money) and deposit it as margin in an account that a financial institution maintains and uses to cover your losses if it goes against you.

In this case, a completely unregulated financial institution which might, instead, choose to limit your withdrawals when you want the money back, or lose it on some stupid and irresponsible investment, or just blatantly steal it and walk away.

If somebody isn’t aware of these risks when telling people to “just short it”, then I kinda have to tell them to stuff it. But if they ARE aware, and not LEADING WITH THAT when telling people to “just short it”, I kinda have to tell them to fuck all the way off, for being scamming scammers.
posted by notoriety public at 10:25 AM on June 30 [47 favorites]


I had a incredibly weird dream last night where crypto/blockchain tech was actually a Trojan Horse designed to break the simulated multiverse through pointless entropy and complexity that made the simulation untenable.

Which is silly, sure, but with how wacky the last few years have been it makes about as much sense as anything else.

It's also telling that this is possibly only valid use of crypto/blockchains that I've ever thought of or heard of to be intentionally increasing entropy and complexity to break/hack a simulated universe.

Unfortunately this idea doesn't do anything to help end the cult around crypto.
posted by loquacious at 10:30 AM on June 30 [8 favorites]


If you're absolutely confident that Bitcoin is dead then short it and make a ton of money.

Shorting crypto is harder than you might think. Short term price spikes end up creating automated margin calls. Even if you're certain ethereum is going to zero in a month, if it spikes tomorrow and you can't cover your margin requirements, you're out of the game.
posted by BungaDunga at 10:31 AM on June 30 [8 favorites]


Bitcoin is like Skynet or the Terminator T-1000, except it’s made out of money, graphics cards, and shitty memes instead of lasers and weapons-grade titanium.
posted by jonp72 at 10:42 AM on June 30


bigbigdog: By nature [crypto] is designed to squander resources, enable only instability and speculation, and erode trust in society and institutions such as organized government.

Damn, that makes it sound like Putin's Platonic ideal of an operation to run against -- well, the whole rest of the world.
posted by wenestvedt at 10:47 AM on June 30 [1 favorite]


Tough crowd... so no MiFiNFTs?
posted by sammyo at 10:58 AM on June 30


Tough crowd... so no MiFiNFTs?

We already have an infinitely better version.
posted by jedicus at 11:02 AM on June 30 [13 favorites]


If you want to talk about the powerless it would be a rash not to check your financial privilege. Not everyone is banked and not everyone benefits from dependable currencies or governments.

Maybe Bitcoin fulfills a function for enough people to justify it's existence and maybe there is a reason why it hasn't been supplanted by it's imitators.
Y'all like to straw man with crypto bros but I'm a greens-voting lesbian trans woman who happily pays tax. Bitcoin helped me obtain harm reduction supplies when i needed them. Bitcoin has allowed me to make donations to people in faraway lands who were in urgent need of funds. Or do we just ignore the verifiable fact that Bitcoin is constantly in use by real people?
posted by neonamber at 11:04 AM on June 30 [1 favorite]


We also have BLOCKCHAIN
posted by chavenet at 11:05 AM on June 30 [3 favorites]


Also, surprising no one, CoinFlex's scheme has not allowed them to re-open withdrawals today (Jun 30) as they had previously suggested.
posted by mhum at 11:05 AM on June 30


I'm a greens-voting lesbian trans woman who happily pays tax.

Kinda curious how you're offsetting the carbon impact, then.
posted by aramaic at 11:09 AM on June 30 [12 favorites]


Bitcoin helped me obtain harm reduction supplies when i needed them. Bitcoin has allowed me to make donations to people in faraway lands who were in urgent need of funds.

That was then, and I'm glad it worked for you. Now that the exchanges are failing and preventing withdrawals and losing money though it's probably reasonable to compare what other options exist versus this one which may never allow the recipients to cash out.

Things can serve good but still change enough in implementation to need reevaluating - the halo effect and recency bias are worth examining, and it's possible today people would or should make different choices, knowing what we know now.
posted by abulafa at 11:14 AM on June 30


Or do we just ignore the verifiable fact that Bitcoin is constantly in use by real people?

A number of Bernie Madoff's marks actually made money by being involved in his scam, and some may even have went on to do good things with the money. Does that mean we should celebrate Bernie Madoff?

There is no such thing is ethical use of cryptocurrencies. There are some lucky people who make it out ahead (by taking from those who do not), and like every endeavor in human existence there may be tiny pockets where people are trying to do something good with it, but on the whole it represents massive harm being done to the people it claims to help, and to the environment.

It is not "privilege" to note this. And honestly, coming in here talking about "the unbanked" and "privilege" reeks of crypto-bro astro-turfing.
posted by a faithful sock at 11:26 AM on June 30 [42 favorites]


If you want to talk about the powerless it would be a rash not to check your financial privilege. Not everyone is banked and not everyone benefits from dependable currencies or governments.

I would like to just take a moment and marvel at this comment, that takes some very real problems and says, completely sincerely and with a touch of self-righteousness even, “hey, why aren’t you taking seriously the suggestion that we double down on the structural issues that created those problems?!” That is, it suggests that the solution to people being unbanked would be something that requires even more access to computers, as well as knowledge of computers and of financial systems, than average, in addition to tying up your money in ways that can be hard to immediately access/convert to cash. And on top of that, it implies that cryptocurrencies are dependable, or that living somewhere with an undependable government would not make cryptocurrency investments even more risky, completely ignoring/not at all addressing the main link in the FPP. This is the most amazing (in the sense of creating amazement) Metafilter comment I have read today.
posted by eviemath at 11:42 AM on June 30 [33 favorites]


Does "the powerless" include undocumented immigrants?
"Coinbase Is Reportedly Selling Geolocation Data to ICE"
posted by thatwhichfalls at 11:52 AM on June 30 [10 favorites]


Crypto is an information attack from a parallel universe. It operates similar to religion. It exploits several loopholes in human psychology, and propagates itself.

and

I had a incredibly weird dream last night where crypto/blockchain tech was actually a Trojan Horse designed to break the simulated multiverse through pointless entropy and complexity that made the simulation untenable.

...have given me my next Cyberpunk RPG plot/premise. Maybe bitcoin isn't absolutely useless.
posted by eclectist at 12:06 PM on June 30 [6 favorites]


There are lots and lots of valid reasons to absolutely hate the banks and the current financial regime. Can we stop and imagine for a moment what it would have been like if a tiny fraction of the time, energy, money and enthusiasm that has been sunk into cryptocurrency had instead been spent getting a public banking option?
posted by phooky at 12:11 PM on June 30 [19 favorites]


cryptocurrency
cryptocurrency
cryptocurrency

say it with me, say the whole word. #We'reTakingItBack
posted by glonous keming at 12:20 PM on June 30 [4 favorites]


I'm not astro-turfing, i'm a real member who loves this site!
Frankly I think this comment thread is not a good representation of this communities usual capacity for compassion.
Am I the only one taken aback by the absolute revelry in the misfortune of others on display here?
posted by neonamber at 12:21 PM on June 30


I'm not reveling in people getting hurt. I'm reveling in the thing that is hurting people stopping hurting more people.

Those already bought in on cryptocurrency have already lost their money to the people they gave it to in return for the bags they are now holding. They only way they can be "made whole" is for other people (and in their "dream scenario" of going to the moon, a lot of other people) to lose money.

The sooner cryptocurrency falls apart, the fewer people will be harmed, and the longer it stays alive, the larger the group of people it will harm.

I will absolutely, enthusiastically, and unequivocally cheer the downfall of a system that has already harmed millions and threatens to harm more if left un-stopped.
posted by a faithful sock at 12:33 PM on June 30 [21 favorites]


Mod note: One comment deleted. Calling other members hypocrites: Not Okay
posted by loup (staff) at 12:36 PM on June 30 [2 favorites]


I drive a car. It allows me to go places and provides me with access to opportunities I wouldn't have if I didn't own a car.

I know the internal combustion engine in my car is emitting greenhouse gasses. I know that the sprawl created by a car-focused society has done lots of damage to the environment and created an unsustainable level of development.

This is why I don't evangelize car ownership and why I support public transit.

It's great that cryptocurrencies have worked for you.
posted by RonButNotStupid at 12:38 PM on June 30 [7 favorites]


...aaaaand now we're in the concern-trolling phase. Look. I have no reason to doubt that you are who you say you are and you've (to some extent) used your crypto-powers for good, but the opposite of one bad apple spoiling the bunch--the idea that one good apple can redeem the bunch and retroactively un-spoil them--doesn't wash. Crypto as a whole is an unmitigated shit-show--yes, sorry, unmitigated even by you--and my compassion is brought into action by doing my level best to educate people who haven't yet been sucked into it about why it's a scam and needs to stop.
posted by Halloween Jack at 12:39 PM on June 30 [13 favorites]


A couple searches reveal that while over 100 million people own some (fractional?) BTC, only about 16,000 own over 100 BTC. If those coins were acquired before 2009, their value (and thus their power to manipulate) has inflated over 140,000%.

I know/am acquainted with a few Bitcoin zillionaires (they all live in Puerto Rico, naturally), and this point here is important. Most of them bought BTC at single- or double-digit prices and hold tens of thousands of them in some cases. Bitcoin sitting at $18,000 or so is a cataclysm for buyers and organizations who picked it up at $50,000 or more, but still eye-watering amounts of dollar value still for the OGs; and they don't outwardly care at all about things tanking, as from their perspective, it's still far from an actual concern. Sort of.

I've noticed that some of them have started buying real estate more aggressively. Big palatial estates on islands or just different houses and the like in various places. That all-important 7th vacation home. It's not panic hedging yet, but there's been a change in attitude for sure.
posted by phong3d at 12:42 PM on June 30 [1 favorite]


> neonamber: "Am I the only one taken aback by the absolute revelry in the misfortune of others on display here?"

I mean, one of the key catchphrases within the crypto "community" (like WAGTMI/WAGMI) is HFSP -- "have fun staying poor" -- usually deployed against those who are critical or skeptical of crypto. So, I guess, something something sauce, something something gander.
posted by mhum at 12:43 PM on June 30 [20 favorites]


Crypto is an information attack from a parallel universe. It operates similar to religion. It exploits several loopholes in human psychology, and propagates itself. By nature it is designed to squander resources, enable only instability and speculation, and erode trust in society and institutions such as organized government.
posted by bigbigdog
ayyyy let's gooooo i would read a whole ass novel with that premise it's giving gibson it's giving weir it's giving cixin it's giving
posted by lazaruslong at 12:46 PM on June 30 [9 favorites]


Previously on NFTs.
posted by EmpressCallipygos at 1:03 PM on June 30 [1 favorite]


If this discussion has dissuaded anyone from continuing their possession of Bitcoin or cryptos, I implore you to donate it to a worthy cause such as Sci-Hub, Internet Archive or the people of Ukraine.
posted by neonamber at 1:04 PM on June 30 [3 favorites]


also pls give your heroin, which has empowered the unbanked so much, to donkey sanctuaries thankyou
posted by lalochezia at 1:08 PM on June 30 [8 favorites]


Can someone explain this rvUSD thing to me? It looks like "so uh hey we lost all your money, but if you buy into this new thing then the money that you use to buy in will let us pay our outstanding debts. You can trust us since we just lost forty seven million dollars!" Where is the value supposed to come from?

Am I missing something or is this just, uh, the whole plan?
posted by wesleyac at 1:10 PM on June 30 [5 favorites]


ayyyy let's gooooo i would read a whole ass novel with that premise it's giving gibson it's giving weir it's giving cixin it's giving

It's basically already been done with Stephenson's Cryptonomicon. Also Mr. Robot and eCorp is similar.

I also immediately thought about how my weird dream would be a pretty good short story or book but honestly I don't think I could stomach writing it and dealing with how it would probably get a lot of unwanted attention from the crypto crowd.

It would probably feel like writing 1984 and having it immediately praised as a something to strive for.
posted by loquacious at 1:18 PM on June 30 [3 favorites]


woo-hooo - high-end FPGA boards are starting to hit ebay .... now to wait for the prices to crash
posted by mbo at 1:28 PM on June 30 [3 favorites]


Can someone explain this rvUSD thing to me? It looks like "so uh hey we lost all your money, but if you buy into this new thing then the money that you use to buy in will let us pay our outstanding debts. You can trust us since we just lost forty seven million dollars!"

nailed it
posted by UlfMagnet at 1:33 PM on June 30 [3 favorites]


Where is the value supposed to come from?

One of the Cryptadamus articles linked to this Bloomberg interview with a “crypto billionaire” who is surprisingly candid about where the “value” comes from: Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned
And now all of a sudden everyone's like, wow, people just decide to put $200 million in the box. This is a pretty cool box, right? Like this is a valuable box as demonstrated by all the money that people have apparently decided should be in the box. And who are we to say that they're wrong about that? Like, you know, this is, I mean boxes can be great. Look, I love boxes as much as the next guy. And so what happens now? All of a sudden people are kind of recalibrating like, well, $20 million, that's it? Like that market cap for this box? And it's been like 48 hours and it already is $200 million, including from like sophisticated players in it. They're like, come on, that's too low.
. . .
This box is worth zero obviously. And like that, you know, you can't like keep this smart cap or something. But on the other hand, if everyone kind of now thinks that this box token is worth about a billion dollar market cap, that's what people are pricing it at and sort of has that market cap. Everyone's gonna mark to market. In fact, you can even finance this, right? You put X token in a borrow lending protocol and borrow dollars with it. If you think it's worth like less than two thirds of that, you could even just like put some in there, take the dollars out. Never, you know, give the dollars back.
posted by mubba at 1:39 PM on June 30 [5 favorites]


If this discussion has dissuaded anyone from continuing their possession of Bitcoin or cryptos, I implore you to donate it to a worthy cause such as Sci-Hub, Internet Archive or the people of Ukraine.

Speaking as somebody who went through that process last year, and still has some conflicted feelings about it: even donating cryptocurrency to charity isn't an unalloyed good.

When you "donate" Bitcoin, what you're usually really doing is transferring it to an intermediary who sells it for cash. The charity gets the cash, which ultimately comes from whoever was on the other side of that transaction.

Sure, maybe the counterparty is a whale who can afford to gamble. On the other hand, maybe they're a hopeful retail investor who cashed out their 401k to buy Bitcoin, and who is likely to be end up holding the bag when the music stops. Who's to say? Either way, in effect it's their actual money I donated, just by participating in the rigged system.
posted by teraflop at 1:59 PM on June 30 [9 favorites]


> wesleyac: "Am I missing something or is this just, uh, the whole plan?"

TBH, as bad as that plan was, it actually got worse. They linked the value of their rvUSD token to a certain individual's debt/margin call. In their whitepaper (pdf), they describe him thusly (emph. added):
The Individual is a long time customer of the CoinFLEX platform and during the recent market volatility his account went into negative equity. In normal circumstances, we would auto-liquidate a position that runs low on equity at prices that are prior to the zero-equity price.

In this case, the Individual had a non-liquidation recourse account, a condition that means they will not be liquidated in exchange for personally guaranteeing their account equity in writing. Manual margin and credit lines are common practices with institutional-sized traders in the crypto and traditional markets. Notably, the Individual had consistently met every margin call before this incident.

The Individual is a high integrity person of significant means, experiencing temporary liquidity issues due to a credit (and price) crunch in crypto markets (and even non-crypto markets) who has significant shareholdings in several unicorn private companies and a large portfolio.
This was, of course, before it became public that the individual was Roger Ver. But then Roger Ver tweets out a statement that basically amounts to "no way, I don't owe these guys jack that's just a rumor, in fact it's those guys who owe me", which then gets the CoinFlex CEO, Mark Lamb to tweet out a thread that basically says "yes way, it's totally him, he's the guy who owes us the money. also we don't owe him anything".

So in the span under 24 hours, the entire basis for why it might be a good idea to invest in this rvUSD token kind of blew itself up. I mean, if the basis for value was that there was a high net worth, high integrity person who wasn't paying their debt right now but was really going to be eventually good for it don't you worry your pretty little heads about that, that all kind of goes out the window when the debtor comes out and just says, "nope, not me".

I did see some chatter on Twitter that this might have actually been an attempt at a very specific kind of bailout. According to the whitepaper, they were restricting the pool of eligible investors to "sophisticated investors", which is a term of art from the regular finance world relating to what level of wealth the SEC considers high enough that they don't need to be protected from their own mistakes (roughly speaking). However, this kind of targeting is mostly opposite to what you'd do if you were doing a regular Ponzi scheme, where you would likely cast as wide a net as possible amongst the least sophisticated investors. Some people are speculating that this rvUSD token as well as CoinFLEX's subsequent public callout of Ver was intended to draw money out of other big crypto whales (e.g.: people like Sam Bankman-Fried) to bail out one of their own, lest his default trigger a chain reaction that could end up eating away at their fortunes as well. Whatever the case, it didn't seem to work.
posted by mhum at 2:17 PM on June 30 [10 favorites]


I vaguely follow along cryptocurrency dramas - and have been watching the Bean protocol following a flash loan attack drained their treasury. Bean just have the most amazing set of language, with beans (coins), silos (decentralized governance), fields (credit), weather (interest rates) and barns (a treasury) and barn raises (Recapitalization) and the like. So you just get mad sounding financial information like “users are rewarded with weather for sowing $BEAN into the Field”.

I have to say the following tweet is one of my all time faves because….well…oh just look at it……

Over $5.5M of Fertilizer sold in the first hour of the Barn Raise.

they do know what the more colloquial term for Fertilizer is right? This must be a grand joke.
posted by inflatablekiwi at 2:25 PM on June 30 [6 favorites]


If you're absolutely confident that Bitcoin is dead then short it and make a ton of money.

Thanks, I will! *googles how to short bitcoin*

It seems like I would make more money selling a video series on "How to Short Bitcoin" than with actually trying to short bitcoin. Something to think about.
posted by betweenthebars at 2:36 PM on June 30 [11 favorites]


Frankly I think this comment thread is not a good representation of this communities usual capacity for compassion.

I see you’ve never checked into a thread about pit bulls, going on cruises as a vacation, or declaring your fandom for any band.
posted by hwyengr at 2:46 PM on June 30 [9 favorites]


I vaguely follow along cryptocurrency dramas - and have been watching the Bean protocol following a flash loan attack drained their treasury. Bean just have the most amazing set of language, with beans (coins), silos (decentralized governance), fields (credit), weather (interest rates) and barns (a treasury) and barn raises (Recapitalization) and the like. So you just get mad sounding financial information like “users are rewarded with weather for sowing $BEAN into the Field”.


Multiple slurp juices on a single ape, yo
posted by shenkerism at 2:49 PM on June 30 [13 favorites]


This is an actual extract from a Bean governance proposal - its so clearly fit for Metafilter bean plating purposes its scary…like are unripe Beans deleted posts or flagged comments or something else

Distribute Unripe Beans

1. Deploy Unripe Bean token

2. Distribute non-Deposited Unripe Beans
Redistribute Wrapped Beans and Circulating Beans in the form of Claimable Unripe Beans
Remove all of the following assets redistribute them in the form of Claimable Unripe Beans
Harvestable Pods
Beans in Pod Orders
Withdrawn Beans
Farmable Beans

3. Remove all Deposited Beans and redistribute them in the form of Deposited Unripe Beans
posted by inflatablekiwi at 3:21 PM on June 30 [4 favorites]


Let they who have not deposited an unripe bean in a Metafilter thread harvest the first pod
posted by inflatablekiwi at 3:33 PM on June 30 [6 favorites]


Am I missing something or is this just, uh, the whole plan?

Experience shows that whenever you look at anything blockchain-related and have this reaction, you're not missing something and that is the whole plan.
posted by straight at 4:05 PM on June 30 [9 favorites]


"Am I missing something? How does recording on a cryptographically-signed spreadsheet the fact that I gave you money give me any control or ownership of this jpeg?"
posted by straight at 4:11 PM on June 30 [2 favorites]


It's funny, back when I read the novel 'Cryptonomicon' I got the impression that a new alternative currency system would have to be backed by some kind of hard assets?
posted by ovvl at 4:28 PM on June 30 [3 favorites]


Schneier: On the Dangers of Cryptocurrencies and the Uselessness of Blockchain
Warzel: The Petty Pleasures of Watching Crypto Profiteers Flounder

Am I the only one taken aback by the absolute revelry in the misfortune of others on display here?

Respectfully I think this is a misreading of the general tone of commentary here. I haven't seen any evidence of folks revelling in the misfortune of the general public that has been harmed by cryptocurrencies; quite the opposite, it's a glee in seeing the scam artists, grifters, hype accounts, shitcoin boosters and whales—those who feast on the average people who are getting sucked into investing their life savings on a digital tulip—getting burned for once. Even if it's temporary, or worse, part of more market manipulation, still, some assholes are unhappy tonight. This is good.
posted by Ten Cold Hot Dogs at 4:42 PM on June 30 [18 favorites]


The other evening I was listening to a CBC radio program - Unreserved - in which several indigenous individuals were quite enthusiastic about how NFTs and crypto could provide ways for these communities to move toward financial independence and fair compensation for artists. I do not feel in any way qualified to warn folks like this, nor do I think my voice (cis white male) is how they need to hear it. Other than the articles linked above, does anyone know of any credible voices in the North American indigenous community who could/are sound/ing the alarm?
posted by kneecapped at 5:05 PM on June 30


It's funny, back when I read the novel 'Cryptonomicon' I got the impression that a new alternative currency system would have to be backed by some kind of hard assets?

And see all I can remember from Cryptonomicon is some stuff about Alan Turing and finally understanding the physics behind how people get the bends.
posted by nickmark at 5:29 PM on June 30 [4 favorites]


I haven't seen any evidence of folks revelling in the misfortune of the general public that has been harmed by cryptocurrencies; quite the opposite, it's a glee in seeing the scam artists, grifters, hype accounts, shitcoin boosters and whales—those who feast on the average people who are getting sucked into investing their life savings on a digital tulip—getting burned for once. Even if it's temporary, or worse, part of more market manipulation, still, some assholes are unhappy tonight.

I also confess to chuckling when Seth Green had four NFTs stolen out of his crypto wallet - and because he was working on making a TV series about them somehow, had to shut down production buy them back again first.
posted by EmpressCallipygos at 5:35 PM on June 30 [5 favorites]


I seem to remember financial crimes writer Jeffery Robinson saying something to the effect of, not necessarily in his _Bitcon_ book, "unless you can clearly explain it to an 8 year old kid, it's a scam".
posted by mikelieman at 5:38 PM on June 30 [4 favorites]


I know/am acquainted with a few Bitcoin zillionaires

You know them, and they yet live? Where have you gone Scarabic, a nation turns it's lonely eyes to you...
posted by aramaic at 7:05 PM on June 30 [4 favorites]


This is an actual extract from a Bean governance proposal - its so clearly fit for Metafilter bean plating purposes its scary…like are unripe Beans deleted posts or flagged comments or something else

If I can monetize deleted posts I'm all in on that.

Great, now whoever owns the IP and trademarks for that silly marketing microcurrency Beenz is going to rise out of the grave like a kaiju and start wrecking the joint.

Speaking of kaiju, where is Oracle/Sun and their army of Sadaurkar death squad lawyers when you really need them? I thought they used to be all over anything that even looked at their Java/Bean trademarks funny.
posted by loquacious at 7:09 PM on June 30 [1 favorite]


You know them, and they yet live?

I recently learned that someone I know was doing some contract work with someone founder-ish enough of a certain special interest group to have a lengthy wiki page and an interesting collection of legal action against them and my first reaction was instant dread and dismay and being worried about the safety of the friend of a friend because a number of different kinds of people would definitely like to have a chat with this person.

It's bad enough I'm definitely not going to drop any names or confirm or deny anything..
posted by loquacious at 7:13 PM on June 30


I vaguely follow along cryptocurrency dramas - and have been watching the Bean protocol following a flash loan attack drained their treasury. Bean just have the most amazing set of language, with beans (coins), silos (decentralized governance), fields (credit), weather (interest rates) and barns (a treasury) and barn raises (Recapitalization) and the like. So you just get mad sounding financial information like “users are rewarded with weather for sowing $BEAN into the Field”.

Ack. This is somebody harnessing the darkest patterns MMOs have developed for getting money out of people, all these toy currencies and collectables and modifiers to make it almost impossible to keep track of how much real-world money you're spending. (They've come a long way since Microsoft charged $15 for DLC that you had to pay for with Microsoft Points sold in groups of $10.)
posted by straight at 9:56 PM on June 30 [2 favorites]


Firstly, I feel the need to say that the mindset described here:

I apologize if you are one of those people who thinks that reddit feels kind of like a digital shantytown and/or that anything posted on reddit is highly suspect.

is incredibly dangerous in retrospect, given that fascism is spreading among young white American males like a cancer in part because it gestated in 4chan, a place many people believe to be less of a shantytown and more of a sewer.

But what I really wanted to type out was a story that's been percolating in my head for a while. It gets to the most basic core of the matter, and might be good to tell to kids. It starts off by freely plagiarising a mathematical parable from one of the Murderous Maths books (Twitter) by Kjartan Poskitt, but then builds upon it in an extremely relevant way.

Ahem.

A traveler in some fantastical land or other is riding an animal of some description down a nondescript path when he comes across a travelling merchant by the side of the road who offers him a strange bauble for 50 gold coins. The merchant claims that anyone who purchases the bauble will experience incredible luck - but after a hundred days have passed, he will die horribly. The only way to dodge the curse it to sell it for someone for fewer gold coins than he bought it for.

The traveler almost buys it - literally and figuratively - but a voice in the back of his head tells him to work backwards from the end. Should you buy it for 1 coin? Of course not; you'll be unable to sell it and thus doomed to die. Ergo, nobody in their right mind would buy it for 1 coin. Should you buy it for 2 coins? Of course not, because you'd have to sell it for 1 coin and, as established, nobody in their right mind would buy it for that price. Ergo, 2 is also out. 3? Not, because 2 is out. And so on - ad infinitum, with higher numbers taking advantage of obfuscation and the nature of the human mind.

And so, the traveler declines the offer. As he rides on, he hears the merchant understandably sputtering upsetly before composing himself - obviously rationalizing that most people don't think like the traveler. The traveler, eager to put the incident out of his head, makes his steed-of-some-description ride faster for a bit. He soon catches up to a merchant's cart ahead of him - nice and fancy, and drawn by a cooler creature with more legs.

This second merchant strikes up a second conversation, and knows exactly how to start it - by correctly guessing that the traveler was too clever to take the first merchant's offer and congratulating him. He expertly segues into an offer of his own - similar, but with no deadly curse and a simple twist. Buy THIS bauble for 50 gold coins, he says, and all you have to do to reap the profits is sell it for MORE than you bought it.

Well. The traveler has a little more trouble working backwards form the end, because numbers don't have an end. Even the hard limits - the number of gold coins in the world, the amount of gold in the world period, the amount of assets of any kind - are distant and fuzzy. But they're there, and so in time, somebody will be the loser. So the traveler steadfastly declines. As he rides on ahead, he notes that this merchant is not perturbed in the slightest - he doesn't even have to remind himself that he'll find fools. Of course he will.

But then another thought occurs to the traveler. He slows his steed for a moment, and asks the merchant over his shoulder what his bauble actually does.

The merchant was not the origin of his response, and historians are utterly flummoxed as to its origin.
posted by BiggerJ at 11:13 PM on June 30 [4 favorites]


@Strange Interlude

The issue is not that there is no thing of value backing the proof of work. The contention is that the blockchain itself is a thing of value in its own right, and the proof of work is a demonstration that you agree with that statement to the degree that the value of your participation in the blockchain exceeds the cost of doing the work.

Unfortunately this is all hideously self-referential and (in retrospect probably provably) unstable, because the ensuing rampant speculation noise swamps any signal as to what that inherent value actually is. It's too messy for Buffett's long-term weighing machine to kick in.

Like, we can see that yes, it would be very good and valuable to be able to have a thing with the properties of bitcoin (well, some of them, anyway) for people for whom the mainstream banking system just doesn't work, if the environmental costs weren't astronomical (which they wouldn't be absent the speculation). That's real value, worth paying real money for. But because the inherent properties of the system make the costs of participating in it completely detached from the real value... well, look on my works, ye mighty, and despair.
posted by regularfry at 2:31 AM on July 1 [2 favorites]


Even as a software engineer and Bitcoin skeptic I was shocked recently when it dawned on me that the whole idea of a public blockchain (which I had assumed from the hype was a brilliant new data structure that could keep on helping the world separate from the fate of cryptocurrency) can't run without these silly coins.

Here in Britain last year I experienced Blockchain for the first time when there was a COVID testing app that ran it. We were relying on it for news about when it was OK to leave the house. It was janky and buggy and felt like the UI had been rushed out, but there were these crypto people on Twitter talking about how awesome it was that it was legitimizing not just Blockchain but some coin they were trying to pump up.

I'm glad that crypto has been able to help some people get out of desperate situations, but it feels like for every person helped by it to get out of dire straits there must have been some huge number of X other people who were ripped off by it, like with the betting shops on our high street.
posted by johngoren at 3:01 AM on July 1


Here in Britain last year I experienced Blockchain for the first time when there was a COVID testing app that ran it. We were relying on it for news about when it was OK to leave the house. It was janky and buggy and felt like the UI had been rushed out, but there were these crypto people on Twitter talking about how awesome it was that it was legitimizing not just Blockchain but some coin they were trying to pump up.

Got any details about what this app was named? I know there were lots of talk about it a few years ago but nothing came of it because putting a blockchain into things is goddamn stupid, which most people realized long before the beta stage.
posted by ymgve at 5:51 AM on July 1 [1 favorite]


Two people who provide intelligent explanations and ruthless criticisms of web3 and cryptocurrencies. Molly White's Web3 is going just great and Ed Zitron's Where's Your Ed At
posted by Jackson at 6:42 AM on July 1 [6 favorites]


Motley Fool is sin vergüenza when it comes to still promoting cryptocurrency.

This is the start of an article today:

"Bitcoin has soared more than 500% over the past two years. Since its launch, Bitcoin has climbed more than 3,300%. If you missed out on getting in early on the world's biggest cryptocurrency, you may be regretting it right now -- but don't."
posted by dances_with_sneetches at 6:44 AM on July 1 [1 favorite]


It's funny, back when I read the novel 'Cryptonomicon' I got the impression that a new alternative currency system would have to be backed by some kind of hard assets?

It's been a few years since I read it, but IIRC (spoilers ahoy!) the heroes save the day and start their own currency, backed by their discovery of an enormous hoard of gold hidden in a cave in the jungle by the Japanese military when they realized they were going to lose the second world war. The twist is, the gold is completely inaccessible even to modern technology (they can't fly it out in helicopters or drive it out in trucks because Reasons), but it EXISTS, so that's enough of a physical value store for them to start their version of cryptocurrency.

In the novel they're kind of laughing at the absurdity of the whole thing, but even Neal Stephenson's prescient over-the-top crypto-satire-money is built on a way more stable foundation than the blockchain.
posted by Mayor West at 7:38 AM on July 1 [2 favorites]


If you’re one of the folks that is using / working in crypto because you’re on the margins of society and struggle to thrive in mainstream employment, and you need help with something or just to chat, feel free to reach out to me. Otherwise, I very much understand why people are blowing off steam and generalising about crypto in a way that elides the existence of folks on the margins, and I guess I’m lucky that I’ve got the resilience to deal with it. I am also glad that there’s an AskMe like service organised by queer leftists in web3 to help web3 content creators on the margins, because this website isn’t necessarily the best space for it anymore. Believe you me, if I could work a straight job and still be able to access sleep, I would
posted by The Last Sockpuppet at 9:07 AM on July 2


when I read the novel 'Cryptonomicon' I got the impression that a new alternative currency system would have to be backed by some kind of hard assets?

I've been following the crypto space since the 90s, when people involved in it called themselves "cypherpunks" and it was more about applying the then-regulated "strong crypto" to everyday communications and stuff. (GPG-encrypted email, Mixmaster remailer networks, Nym anonymous posting services, Freenet before it was just CP, that sort of thing.)

I can only imagine the utter laughingstock that someone would have made of themselves by suggesting that a currency backed by nothing would work. That was absolute anathema to the folks involved in the scene back then—which had a strong goldbug / Austrian School flavor—who believed the problem with so-called "fiat" currencies was that they weren't backed by anything and thus could be inflated by an irresponsible government into valueless-ness.

There were a whole series of virtual currency experiments / attempts in the early 2000s, including "E-Gold" and "1MDC", which were based on (theoretical) physical gold held in vaults, and in the case of 1MDC, on e-gold account holdings. This all came crashing down in 2007, when the US government finally decided it had enough of E-Gold's laissez-faire attitude towards KYC regulations (introduced in the wake of 9/11) and its use by cybercrime gangs, and shut the whole business down. (You were able to get your E-Gold's value out, but only by identifying yourself in compliance with US KYC regs, so haha lol sucks to be you, Bulgarian cybercriminals.)

We of course do not know who "Satoshi" is (at present), but my guess is that they probably took the absolute wrong lesson from E-Gold/1MDC: rather than realizing that an unregulated banking or money-transfer system will inevitably become a haven for criminals, child pornographers, terrorists, etc., they apparently decided that it was the centralization and nexus under US law that was the problem. Bitcoin "solves" this problem but in doing so, throws out the traditional requirement for an alternative currency be backed by a physical, stable store of value. (Though you can still see the Austrian School thinking in the hard upper limit to the number of BTC that can be "mined", which essentially guarantees deflation over time.)

This brings me back to my earlier point, which is that I don't believe the conspiracy theories about BTC being a CIA/NSA/Illuminati plot, because it's just too stupid. When it originally came out, most people with any understanding of finance realized it wouldn't work well. I'm on record (on my ancient blog) as saying so, and I still believe I'll be vindicated eventually: what I (and a lot of others) did not anticipate was the sheer number of "greater fools" that could be brought into the game to keep the value of something essentially ephemerial and valueless (except insofar as a really shitty transaction network for criminals has value) continually increasing in perceived value for such a long time.

Turns out the old adage about the "market remaining irrational longer than you can remain solvent" is very true; someone who tried to short BTC in those early days (not that there was an easy way to do that) would have had a bad time.

But the fundamental problem—that BTC has no value (it's not a claim on future economic productivity, or bullion in a vault, or barrels of oil, or even gold/iron/lead/whatever still in the ground, nor can you pay taxes in it, nor is it "legal tender for all debts" as defined by people with guns)—still remains.

Now, if I was the CIA or NSA, what I'd be doing is setting up one of those money-laundry "tumblers", because they're the key to the whole criminal enterprise at the moment. As others have noted, Bitcoin is very much not untraceable. It's extremely, publicly traceable; the only reason criminals can get away with using it without exposure is because of the "tumblers" that launder money for you, for a fee. If you operate a tumbler, you could keep records on what money is going from where to whom (and you're pretty much guaranteed that the only money flowing through the tumbler is dirty as hell, because who else would pay for such a service?), and have an unparalleled view of the black market economy.
posted by Kadin2048 at 10:12 AM on July 2 [6 favorites]


I haven't understood how any traceable interaction to a tumbler hasn't led to anti-money-laundering financial death sentences making it impossible to get money out.

Bitcoin is down recently, but it's still about double its pre-covid price. It was the most marginal investment during the Everything Bubble and huge inflow from financial and monetary stimulus. In a strange way, it did what was advertised (increased valuation during fiat currency expansion, M2 went from 15.5T to 21.8T), but much more than proportionally for the reasons discussed above. I wouldn't be surprised if it calms down to something a little higher than its 2019 valuation. When will people admit it has no value? I have no clue, but I wouldn't be surprised if the fantasy lives indefinitely.
posted by a robot made out of meat at 11:05 AM on July 2


I haven't understood how any traceable interaction to a tumbler hasn't led to anti-money-laundering financial death sentences

Yeah, I am honestly a bit flummoxed why there hasn't been more direct action taken against the tumbler operators. Maybe because that opens up a legal can of worms about whether Bitcoin is really "money" and subject to financial regulation? Perhaps the USD/BTC exchanges are easier targets, the way the regulations are currently written.

If I were a government, I'd go very hard (like, "human sushi drone strike" hard) at the tumbler operators, but leave the rest of the network in place, at least for a while. Let people do their dirty deeds on the blockchain and then use it to pull the rug out from under them periodically.
posted by Kadin2048 at 1:25 PM on July 2


" I am honestly a bit flummoxed why there hasn't been more direct action taken against the tumbler operators."

"Now, if I was the CIA or NSA, what I'd be doing is setting up one of those money-laundry "tumblers" ... and have an unparalleled view of the black market economy.

Possibly a question asked and answered?
posted by tavella at 5:47 PM on July 2 [2 favorites]


On the topic of whether cryptocurrency is a net positive or negative for people at the margins of society who aren’t harming anyone, a relevant article was just posted in the ICE dragnet thread:

Major cryptocurrency exchange signs $1.4 million deal to help ICE track crypto trades
posted by eviemath at 8:12 PM on July 2 [2 favorites]


The current generation of tumblers are "blinded" - not even the centralized coordinator knows which inputs are matched to which outputs (if there even is a centralized coordinator - some exist purely as smart contracts)
posted by ymgve at 2:27 AM on July 3


Of course I've always known all this stuff was nonsense (and as someone who's been interested in cryptography since I was an undergraduate sneaking into graduate intro to cryptanalysis seminars, I've known about bitcoin since way before it was cool) but even I am amazed at the sheer grift.

I've tried to understand the "steelman" case for these various high yield schemes and every time I just come up against the question: even in the best possible case, what underlying economic activity could you be lending to that pays this kind of return? I mean they sold it as the democratisation of finance at precisely the time where finance was dirt cheap and every half cocked scheme was securing angel and series A round from VCs? "we're making money by funding things that others can't" doesn't work as a case when everything is being funded.

There's a delusion/coping mechanism in the crypto community that people are opposed to Bitcoin because they're not the ones making money. I don't want to make money by shorting Bitcoin. I want the environmental and financial damage to end with as little pain visited on the powerless as possible.

I accidentally made quite a bit of money out of it (I wanted to see if I could use an FPGA to mine bitcoin way back in the day as a way to learn SystemVerilog) and I still think it's dumb. A friend of mine made 7-digit fuck-you money and he also thinks it's dumb.

The problem with the idea that this is going to liberate finance from central malefactors and allow the funding of otherwise unreachable groups is that first, they will ultimately need to interact with a fiat banking system in order to use it, and then of course they run into the same problem and second that if it was every used for that on a large scale, it would be immediately banned. If it was used for large scale sanctions busting, the first thing that would happen is the US would ban any US regulated entity (and because of the way that the dollar touches all banking, that's basically every financial institution in the world) from transacting with a cryptocurrency exchange. Now what? Empire doesn't have a technical fix.
posted by atrazine at 5:54 AM on July 4 [4 favorites]


"Now, if I was the CIA or NSA, what I'd be doing is setting up one of those money-laundry "tumblers"

I think they have already done just that, tumblers have not been reliable for laundering money for some time, instead they are using NFTs: "I'm not a criminal, I just drew a picture of a monkey and sold it to some very kind internet fraudsters who paid me $400,000 for it"
posted by Lanark at 6:00 AM on July 6 [1 favorite]


Shorting crypto is harder than you might think. Short term price spikes end up creating automated margin calls. Even if you're certain ethereum is going to zero in a month, if it spikes tomorrow and you can't cover your margin requirements, you're out of the game.

a follow-up: Uprise lost 99% of client funds while shorting LUNA during its price crash.
posted by BungaDunga at 7:52 AM on July 6


Now a “publicly-traded crypto lender” called Voyager has filed for bankruptcy, having lent too much of their customers’ money to other imploding ponzi schemes, and both Cryptadamus and Ed Zitron are back with esoteric and witheringly angry takes.
posted by mubba at 12:53 PM on July 6 [2 favorites]


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