fluidistic said:Crypto is ''protected'' by cryptography and a rather complex system involving blockchain, which governements aren't. I can see pros and cons for both sides.
It means that as long as we're unable to exploit a potential flaw in how they (the cryptos) work, they have a value in that they can be used to prove ownership of addresses on a blockchain.phinds said:What does that even mean in terms of its value?
What does that have to do with their VALUE? I can own a bucket of mud but that doesn't make it valuable.fluidistic said:It means that as long as we're unable to exploit a potential flaw in how they (the cryptos) work, they have a value in that they can be used to prove ownership of addresses on a blockchain.
Imagine a Wikipedia in which every article is a bank account statement, anyone can access to any page. However, people can only edit specific articles, their own "bank accounts", thanks to cryptography. When you buy a good or do a trade with someone else, both articles get updated with a new line indicating the transaction.phinds said:What does that have to do with their VALUE? I can own a bucket of mud but that doesn't make it valuable.
Not many, apparently. And based on the volatility there doesn't seem to be much agreement about what that value should be.fluidistic said:People value the fact that they have control over their own article, they can prove to the world of what they own, and they can do trades with such a system.
A couple million people "only". Yes, the volatility is extremely high, although it used to be much higher in the past.russ_watters said:Not many, apparently. And based on the volatility there doesn't seem to be much agreement about what that value should be.
The thing is, most new, groundbreaking technologies are obviously useful. This one isn't. Indeed, I'm pretty sure I don't want those things. They don't sound like useful features to me.
My Visa card, on the other hand, is very useful.... but I'm not buying and selling visa bucks for the privilege of using it. That would be weird.
Well they aren't worthless but then again who likes a currency that fluctuates that much.fluidistic said:I haven't been convinced by logical arguments that they are worthless.
Historically, Zimbabwe. Brazil. Argentina. Weimar Germany. Venezuela.artis said:who likes a currency that fluctuates that much.
"Election close in battleground states"artis said:I guess as long as bitcoin isn't accepted in the mainstream and used by some 50+ % of population it is safe to say it will remain an outsider.
I don't think that's true. I think you answered the wrong question/have it backwards: They had instability, but I don't think they wanted it.Vanadium 50 said:Historically, Zimbabwe. Brazil. Argentina. Weimar Germany. Venezuela.
So...not a currency, but and appreciating asset. The book I keep recommending, "The Only Investment Guide You'll Ever Need", tells a story from the '80s of people converting their dollars to Mexican Pesos and holding them in Mexican banks due to the higher interest rate of the banks and pegging of the Peso to the dollar. Not exactly the same thing but close....well....close to what the more dubious exchanges are promising. Anyway, that worked great until dollar peg was removed.In cryptios case, people who plan to exchange fiat currency for crypto now, and exchange it back when it's worth more. They don't want stability.
Certainly, I use dollars because I have to, and if I had to use bitcoin I'd use bitcoin. But that doesn't provide a path or reason to get from point A to point B. It's a cart before the horse argument. Steve Jobs didn't sell a lot of iPhones by asking people "why not?" and saying they should prove it to him, he sold them by showing him why they should.fluidistic said:If you were paid in cryptos, the visa story would be different. Adoption is so low that it's currently a hassle to deal with cryptos vs visa. But if common stores, and a new Amazon-like website would pop up, one that accepts several kinds of cryptos, things would be quite different....
I haven't been convinced by logical arguments that they are worthless.
I see your point, but they "wanted" it in the sense that they made decisions known to lead to it, to avoid making other more difficult decisions. Like governmental financial responsibility. ("That's just crazy talk!")russ_watters said:They had instability, but I don't think they wanted it.
The governments, yes. This is an argument for why the people might want crypto. Of course, these are people rebelling against the government. Cryptobros make that argument about why we shouldn't trust fiat in general, but it only really could apply to unstable countries. Is that enough? I think it's unlikely, and that may hurt a lot of people in those 3rd world countries.Vanadium 50 said:I see your point, but they "wanted" it in the sense that they made decisions known to lead to it, to avoid making other more difficult decisions. Like governmental financial responsibility. ("That's just crazy talk!")
Yup, counterculture-ers always believe they are morally righteous, even when they're stealing long distance phone service (Jobs) or buying drugs.Vanadium 50 said:As for BTC and its ilk being a currency, it is in the sense that one can use it to buy things unavailable elsewhere, like illegal drugs, and having one's mother-in-law whacked. And people are shocked, shocked, to finding out there is fraud, theft and other criminal activity going on.
This is a really good point.russ_watters said:Nobody else really wants their bank statements to be public.
Reminds me of those that build their own "backyard bunkers" , hasn't anyone told them that the modern day nuclear war would be so devastating that such bunkers and basements full of stuff make almost no difference.russ_watters said:I had a co-worker in 2009 who was literally burying gold and ammunition in his back yard
By example!russ_watters said:Cryptobros make that argument about why we shouldn't trust fiat in genera
Meanwhile on Coindesk - Bloomberg reports Binance Mistakenly Mixed Crypto Exchange's Customer Funds With B-Token CollateralThe redacted sections include "trade secret(s) or confidential research, development, or commercial information," one of the filings show.
The findings show BlockFi's exposure to Sam Bankman-Fried's collapsed crypto empire was greater than previous disclosures had indicated.
As of January 14, unredacted filings show BlockFi had $415.9 million worth of assets linked to FTX and $831.3 million tied to Alameda. However, lawyers representing BlockFi previously said the firm had $355 million in digital assets stuck on FTX, and loaned $671 million to Alameda.
So customers' dubious assets get replaced by even more dubious (volatile) assets.Binance, the world’s largest crypto exchange by trading volume, mistakenly kept collateral for some of the crypto assets it issues in the same wallet as funds belonging to its customers, Bloomberg reported Tuesday, citing an unidentified Binance spokesperson.
The exchange issued 94 so-called Binance-peg tokens (B-Tokens), and reserves for almost half of those are stored in a cold wallet called Binance 8, Bloomberg said. The wallet contains more tokens than required for the number of B-Tokens issued. Since the tokens are supposed to be backed 1:1, the excess indicates the collateral is being mixed with customers’ tokens, according to Bloomberg.
Accidentally? Or is he laying the groundwork for the defense "nobody this dumb could pull off a swift caper like this."Astronuc said:accidentally reveals
https://finance.yahoo.com/news/hack...-from-crypto-investors-in-2022-132405068.htmlHackers stole $3.8 billion from crypto investors in 2022, a 13% increase from 2021 and marking a new all time high for annual theft of digital coins.
This rise in crypto hacks is just the latest indicator to underscore how security within the digital asset market, especially Decentralized Finance (DeFi), remains a major obstacle for the industry.
According to a new report by blockchain forensics firm Chainalysis, DeFi protocols accounted for $3.1 billion, or 82%, of all crypto stolen by hackers, up 9% from 2021.
"Bridges are an attractive target for hackers because the smart contracts in effect become huge, centralized repositories of funds backing the assets that have been bridged to the new chain," Chainalysis said in its report.
Notable cross-chain bridge hacks last year included Nomad ($190 million) in August, Harmony ($100 million) in June, Ronin ($625 million) during March, and Wormhole ($326 million) at the beginning of February.
Notable cross-chain bridge hacks last year included Nomad ($190 million) in August, Harmony ($100 million) in June, Ronin ($625 million) during March, and Wormhole ($326 million) at the beginning of February.
artis said:This is getting so technical I would need a special course on what is a "cross chain bridge" before I can understand the importance of whatever was hacked.
Vanadium 50 said:The bridge seems to be a classic case of solving the wrong problem.
The problem is you have zillions of illiquid cryptocurrencies. Like 100x as many as national currencies, Proping up the system is unhelpful. Propping it up in a manner that permits fraud doubly so.
If I wanted to exchange Iranian Riols for Vietnamese Dong, I would probably have to go through a major currency like Euros or Yen. Annoying, yes, but is this really a problem?
I think you're missing what "the problem" is here. For crypto believers, The Problem is always fiat currencies. This bridge solves that problem.Vanadium 50 said:The bridge seems to be a classic case of solving the wrong problem.
The problem is you have zillions of illiquid cryptocurrencies. Like 100x as many as national currencies, Proping up the system is unhelpful. Propping it up in a manner that permits fraud doubly so.
If I wanted to exchange Iranian Riols for Vietnamese Dong, I would probably have to go through a major currency like Euros or Yen. Annoying, yes, but is this really a problem?
Ok, I guess I've fallen for cryptobro parlance/spin. How about "government sponsored currencies"?Vanadium 50 said:Cryptocurriencies are fiat currencies. Thy just have different people doing the fiating.
That's a weird comparison.Amazing fact - there are 20x as much BTC in circulation as USD in physical circulation.
Interesting read. It would appear some actors are manipulating Bitcoin - in the open.As Griffin and Amin Shams, then a doctoral candidate at McCombs who’s joined Griffin in several gumshoe investigations, screened for misdeeds in 2017, they were fascinated to see that a little-known token that’s supposed to be backed one-for-one to the dollar was getting printed in large quantities. That clue led the pair to another: When new batches appeared, the price of Bitcoin seemed to jump. It looked like someone, or a group, was using that freshly printed “free money” to inflate Bitcoin’s price for their own profit. He and his coauthor Shams sifted through an incredible 200 gigabytes of trading data, equal to the troves that the Smithsonian Institution collects in two years, and followed sales and purchases from 2.5 million separate wallets.
In 2018, they coauthored a groundbreaking study showing that a single, still unidentified, Bitcoin “whale” almost single-handedly drove the token’s giant run-up in late 2017 and early 2018 by distorting the trading in the token.
Toward the end of 2022, another mystifying trend caught Griffin’s eye. Despite the crypto crash and myriad other negative forces, every time Bitcoin briefly breached the $16,000 floor, it bounced above that level and kept stubbornly trading between $16,000 and $17,000. Almost unbelievably, as the crypto market has continued to unravel into 2023, Bitcoin has gone in the opposite direction, trading up 35% since Jan. 7 to $23,000.
“It’s very suspicious,” Griffin told Fortune. “The same mechanism we saw in 2017 could be at play now in the still unreal Bitcoin market.”
I don't think that's what a cross chain bridge is. What you describe relates more to a liquidity pool.Office_Shredder said:A cross chain bridge is basically an atm for crypto. If you have bitcoin and you want ethereum, one way to do that is sell your bitcoin for dollars, then buy ethereum with dollars, all on a centralized exchange. That's annoying, so the exchanges will do you one better and let you trade bitcoin for ethereum directly. But using an exchange sucks (see ftx). A cross chain bridge is a decentralized protocol that works kind of like any crypto thing works - the rules are well defined, and everyone agrees on what operation is happening. The operation in this case is you can send bitcoin to an address, and specify where you want your ethereum, and it willsend ethereum to you. To support this is needs a pot of ethereum (and bitcoin, since it permits moves both ways). Investors put their coins "in the bridge", and the bridge makes money by charging you a fee for your transfer.
Of course i haven't said what the relative value of ethereum and bitcoin is on this bridge. They usually just look at on- exchange trading I believe (I'm a bit fuzzy on how this actually works in practice in a decentralized way). The traditional way to hack a bridge is to manipulate on exchange trading prices, and then do a big swap at a price that everyone agrees is dumb, but the bridge doesn't know that.
Bitcoin and ethereum are actually a really bad example for this - You want to pick a really illiquid alt coin that's worth nothing, buy a bunch, then manipulate the price up, then swap is at a bridge for bitcoin.
I'm very much an amateur so the details here are questionable, but I think this is the broad stroke description of what is happening. I believe there are other attacks that look more like real hacks, where you carefully understand the protocol and figure out some way that the bridge will get confused by what ratio to swap at.
https://www.yahoo.com/finance/news/prosecutors-sam-bankman-fried-helped-170639354.html
- Four new charges against Sam Bankman-Fried were unsealed on Thursday.
- Prosecutors say FTX.US was denied opening a California bank account as it wasn't a licensed money services business.
- So SBF created a new company to take customer deposits, an indictment says.
When a California bank refused to give FTX an account in early 2020 because it wasn't registered as a money services business, prosecutors say that Sam Bankman-Fried started a new company to skirt that prohibition, and subsequently made false statements on a due dilligence questionnaire.
The allegations form part of new charges against Bankman-Fried unsealed this week for conspiracy to commit bank fraud, and conspiracy to operate an unlicensed money-transmitting business – two of four new counts that were made public Thursday. The bank's name was not revealed in the court filing.
While the company didn't appear to have any links to FTX or its sister hedge fund, Alameda, the SEC said "Bankman-Fried had directed FTX to have customers send funds to North Dimension in an effort to hide the fact that the funds were being sent to an account controlled by Alameda."