[ineedasername]

This is the paradox of wanting crypto to be both widespread and free of government influence. It cannot gain "market share" without interacting in some form or fashion with the regulatory structures already in place, putting it under de facto regulation of any jurisdiction of the people who want to use it.

[shawnz]

I don't think it is a paradox at all but simply a separation of concerns. I believe government regulation is essential to a healthy economy, but it can still be useful to have methods to store and transact value outside of centralized control in case there is a failure of government.

It's kind of like how the fourth amendment makes it easier to commit crimes, but we accept it as a society anyway because it is more important to provide opportunities for individuals to defend themselves against government overreach. It is part of the checks and balances that ensure a healthy democracy.

[nepthar]

I agree. There is nothing to suggest that something can't both behave in a regulatory environment and exist if that environment fails. Cars, for instance - They require registration so long as the body enforcing registration exists. If that changes, cars can still run.

[ineedasername]

The paradox is in both wanting the cars (well, crypto) alive & function and also not be subject to the regulatory environment, while that environment is alive & functioning. That seems to be the dream of a certain subset of crypto enthusiasts: Widespread crypto that bypasses existing regulations. I don't think it can get to that point. In order to gain widespread adoption, you need on-ramps & off-ramps for people to actually use it. Those are the regulatory choke points for crypto. Like an unregistered car you can drive on your own property, but the minute you take out on the highway you're obligated to play by the rules that govern the highway.

You can't buy crypto without the consent of banking systems that are subject to regulatory frameworks. You can't make a loan payment with crypto without converting it to the local currency, putting it in a bank, and writing a check or ACH transfer or getting the bank to convert it to local cash.

The vast majority of major transaction that require money cannot be done with crypto, and as that changes they will still only be done with crypto by interfacing with systems subject to regulatory structures. That keeps unregulated crypto in relatively small scale shadow economies. Sort of like cash, except cash is more or less dead as a means of making large transactions.

[pmiller2]

What exactly makes XRP worth anything, though? Isn't it theoretically pegged to the USD?

[shawnz]

Yes, XRP is a bad example of what makes cryptocurrencies useful/interesting for many reasons. I'm just speaking to them in general

[pmiller2]

Well, okay, what makes BTC inherently worth anything, then? Who cares that someone, somewhere, some time ago, solved some useless math problem? Why dedicate the equivalent of 7 nuclear power plants' worth of electricity[0] to it, when we could use that electricity to offset fossil fuel consumption?

I have literally have yet to have anyone explain this adequately beyond the level of "there's a market for it, so, obviously people think it's worth something."

---

[0]: https://news.bitcoin.com/the-bitcoin-network-now-consumes-7-...

[llamataboot]

There’s lots of things worth lots of money that don’t have much use value. So yes, in a market, the definition of price/value is generally where supply and demand meet.

As for why people currently /want/ bitcoin, I assume some people find it a good speculation instrument, some people hope that it will be a more stable store of value than fiat currencies, some people have political reasons for wanting to own some, some technical, etc

What’s to explain beyond what’s there at face value? People “want” bitcoin enough to buy it, other people are willing to sell it...

Now as we move further and further away from BTC (not including significantly different cryptocurrencies - ethereum has other advantages for example) into like dogecoin, which has held value for years, it’s clear that we are getting mostly into pure speculation territory. But from a market perspective, even that territory is fine, just don’t want to be the last one holding the bag...

[pmiller2]

This is roughly what I've been telling the HODLers among my friends and acquaintances for years: there is no intrinsic, fundamental reason why BTC has value. It has value because people say it has value. And, if that sounds awfully like the "fiat currency" they tend to heap so much derision on, well, it should.

The USD is nothing more than an "economy token" to show how much one is winning capitalism. Likewise, BTC is some sort of economy token, but I'm not sure what it means. I'm sure the bottom will fall out of BTC far sooner than the USD, and I will welcome that day, because then we can repurpose the electrical power that runs the BTC network toward productive uses, rather than propping up some financialized mirage.

[noxer]

Demand. Just that. And no, its obviously not pegged to the USD or to anything. Price is a direct result of supply and demand. It has value because people pay for it.

[seibelj]

XRP is centralized - it was issued by a centralized corporation, the ledger is permissioned (which is why it’s so fast) so not just anyone can join the network in a meaningful way, and the way it was distributed is highly suspect.

Cryptocurrencies like bitcoin are entirely different. Ripple is not like bitcoin and the regulations of the USA and other countries will affect bitcoin’s value but not determine bitcoin’s continuing existence unlike XRP.

[greggturkington]

This is also why the SEC can sue Ripple but not, say, Vitalik Buterin. They specifically do not consider BTC, ETH and other currencies as securities.

[seibelj]

Correct - they explicitly said BTC and ETH are not securities. However ETH's launch was conducted via ICO, where people sent BTC in return for ETH, and the exact same launch style was later declared de-facto illegal security sales with companies being penalized.

The SEC essentially caved to the crypto industry and said (paraphrasing) "Yes, ETH was launched as a security, but it became 'decentralized enough' where it is now a commodity". But gave no guidance on how any other coin could become "decentralized enough" to accomplish the same feat, to the detriment of the US crypto industry which has fallen way behind offshore entities.

[ineedasername]

I read that more as the SEC saying "We didn't reall know what we were dealing with at the time." And their thinking and policy decisions have evolved.to fit both their understanding and evolving crypto scene.

[noxer]

Same should apply to XRP then because it exist way longer than ETH. But unlike ETH, XRP was never sold in return for and arbitrary amount of BTC/USD it was first given away for free and later sold at market value.

[ineedasername]

Date of origin may not matter as much as when it came to the SEC's attention. The SEC allowed BTC & ETH under a set of policies & understanding of crypto. That understanding evolved, changing policy, and then XRP got on their radar under the new policy regime. It probably helps that ETH was at least nominally tied to the USD.

Keep in mind I'm not defending the SEC's decision, just speculating on how the policy decisions might have been made & justified.

[arcticbull]

I think they should shut them both down :)

[noxer]

>XRP is centralized

Useless statement XRP is the token there is no definition what makes the token centralized or not. Half the tokens owned by one party? or maybe a quarter is enough already? Its a useless statement as there is no common definition. no one talks about token decentralization anyway. Its about the control over the network that should not be centralized.

>the ledger is permissioned

This is factually wrong. Anyone can transact on the ledger there is no permission required form anyone and no one has the power to exclude someone.

>so not just anyone can join the network in a meaningful way

Also factually wrong. You can "join" the network in any possible way (node/full node/validator/participant/developer/you name it). You can change the code and send in you amendment. If 80% think is worth adding its added. If not its probably because the proposal was garbage not because someone has the power to block your amendment. So far there has been 1 amendment not supported by ripple that still reached the 80% support. Ripple could do absolutely nothing against that.

XRPs existence is also not determined by the USA. XRP would exist without ripple or the USA as long some people run the software it exists. Even if all would go offline it could be restarted any time.

[jeofken]

The best case would be a parallel economy developing, where you can hide yourself from government. No burglar can cost you as much as government. I sadly have yet to find a client for coding who wants to pay in crypto and not report it to the state...

[ineedasername]

That would only work on a small scale. Large scale, truly massive adoption can't occur until the major financial institutions are on board. If businesses can't legally accept it, put it in a bank, make loan payments with it, all of the normal things you do with money-- or have off ramps to convert to currency to allow that-- then you won't get widespread adoption.

[jeofken]

This is true for large business. But an independent contractor, a hair dresser, a carpenter, a plumber, or any number of other people can do business without involving the violent and coercive group known as the state

[ineedasername]

As I said, small scale. All of those people in those jobs may want to buy a car, a house, go food shopping at a store that doesn't take crypto... If they're only paid in crypto, they can't do those things unless there's on-ramps and off-ramps from crypto currencies. Those ramps are bottlenecks subject to the regulations of the jurisdictions in which they take place.

At best, even if a shadow economy built up to facilitate those transactions, tax agencies (IRS for those of us in the US) will knock on a lot of doors and say "you have lots of stuff. That means you're receiving value of some sort. You owe us a cut of that, pay up."

[sokoloff]

Without you giving a discount equal to their marginal tax rate, they would likely be both complicit in tax fraud and paying more after taxes.

[jeofken]

Without tax I could provide my service at a lower rate and still make more, which I would then invest in the most efficient way I could, unlike government.

“Tax fraud” makes it sound like one breaks a contract - but I never agreed with the state who threatens me to include them in any transaction I make.

[juancampa]

Would you consider that be unethical?

[jeofken]

If ethics exists it must be universal - otherwise ethics is just = power.

If ethics is universal, rules apply equally to anyone.

Let’s say theft is not moral, unlike receiving a gift. Both are cases of receiving without payment - the difference being that “giver” giving voluntarily or not. The same goes for how sex is moral, but rape is the furthest from moral, or how work is moral but slavery isn’t.

Tax is money collected under threat of violence - pay, or be punished. It can thus not be moral if morality is universal.

It is also bound to be inefficient - spending “other people’s money” is easy, but when you spend it yourself, you ensure it is invested where it creates the greatest value, unless you’re an addict. This is evident as governments waste money in any way that can to buy rulers the currency they need most - votes or special interest groups goodwill.

[kypro]

Something I struggle with personally is how much money I give the government despite having significant ethical concerns over how my money is being spent.

I know my taxes have contributed to the death and suffering of countless people. I try to remind myself that it also helps some people, but I still struggle to justify my lack of resistance knowing that at least some amount will be used in ways I consider evil.

I think there is some pragmatism needed here though. As individuals we don't really have any incentive to pay taxes if they were optional. I think what's needed is more localised spending and the ability for local communities to withhold tax collectively when concerns are raised about how federal governments might spend it. This would give individuals far more input into how their tax money is spent and the system overall would be far more consensual and prompt people to ask if they're okay with x amount being spent developing nuclear weapons or killing civilians in distant lands. I do find it quite odd that the default assumption is that you're a bad person if you don't pay taxes. I suspect someone who avoids tax then contributes an equivalent amount to charity is almost certainly more ethnical than a tax payer like myself.

[jeofken]

If you are interested in universal morals, the effects of incentives, and a world without coercion, I’d recommend checking out the website of the Mises Institute or the podcast of Stefan Molyneux. Good night from a small socialist European country!

[ineedasername]

Probably illegal pretty much anywhere.

[jeofken]

Legal != ethical

[ineedasername]

Ethics are subjective. Asking "Is it ethical?" to a large group of people is little better than asking "Is chocolate the best flavor of ice cream?"

Legality is a more concrete and easier to give a firm answer to. If you want to have a reasonable conversation on the internet with random strangers of different belief systems, questions like "is it ethical" go right out the window.

[jeofken]

Are you objectively sure it’s subjective?

Ethics must be objective/universal, although cheating it is common and alluring.

Because ethics are universal the rules make sense even for children. It is wrong to lie, steal, rape, and kill, while it is right to honestly tell stories, receive gifts, have sex, and give life. In these words definition lies whether the receiving party partakes voluntary or is forced to.

Legality on the other hand is defined by who controls most guns. If might is right, why should not the strong group genocide the weak?

[root_axis]

lol, how do you propose to power your mining rig and connect to the internet without a government?

[jeofken]

Assuming free people could not create internet and electricity infrastructure is like an East German assuming free markets could not provide a Trabant alternative

[ineedasername]

So long as governments exist you will need to pass your data through government-controlled spaces. You may produce your own electricity, you may create your own wireless mesh WAN spanning a continent even, but that continent might contain the US, and the FCC will come knocking on doors and knocking down you signal towers. You cannot operate on any significant scale without touching on something under the regulatory jurisdiction of nation-states. This is not a problem of imagination, it's the current structure of power. East Germans undoubtedly both imagined and were often aware of Trabant alternatives outside of East Germany. But their dominant power structure did not easy allow for home grown competition.

[jeofken]

We agree. Reread my comment - I said it was “just like” the similie.

Just like East Germans lived under forced government monopoly and regulations in the car market but most could dream of Benzes and BMWs, you and I can dream about a world where voluntary relationships replace government force in areas such as internet, conflict resolution, health insurance (where I live we only have government health care, and like for Trabants, there are long lines...), road management, and all other tasks government bureaucrats so selflessly have relieved us of

[stouset]

People like that have existed and yet in 100% of cases they’ve been outcompeted by and swallowed up by people who form governments. Funny that.

[jeofken]

The same argument was surely made by slave owners since the beginning of history, but westerners managed to abolish slavery, and after that industry was invented

[root_axis]

Individual's could not build nor maintain the infrastructure that underpins the internet, for that you need government.

[Barrin92]

https://unherd.com/2020/12/libertarianism-never-ends-well/

given that free people can't even fend off a bunch of garbage stealing bears I have little confidence that they can get an electricity grid running.

The East Germans were wrong to assume that central planning is very good, they weren't wrong to assume that public governance and central authority is pretty good, which it is.

[ineedasername]

What exactly are you proposing? Anarcho-capitalism or some variant?

[jeofken]

If you follow to it’s end the principle that makes gifts moral but theft immoral, or sex moral but rape immoral, or work moral but slavery immoral, yes you reach “anarcho-capitalism”

[ineedasername]

Okay, I see where you're coming from then. I disagree, but I understand your premises & therefore your comments much better.