SEC charges Ripple and two executives(sec.gov)
sec.gov
SEC charges Ripple and two executives
https://www.sec.gov/news/press-release/2020-338
282 comments
Recent discussion: https://news.ycombinator.com/item?id=25502764
The case revolves around the question of whether XRP is a security or not. The SEC has given the definitive guidance on the topic, which is based on the Howey case:
> The U.S. Supreme Court's Howey case and subsequent case law have found that an "investment contract" exists when there is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.[5] The so-called "Howey test" applies to any contract, scheme, or transaction, regardless of whether it has any of the characteristics of typical securities.[6] The focus of the Howey analysis is not only on the form and terms of the instrument itself (in this case, the digital asset) but also on the circumstances surrounding the digital asset and the manner in which it is offered, sold, or resold (which includes secondary market sales). Therefore, issuers and other persons and entities engaged in the marketing, offer, sale, resale, or distribution of any digital asset will need to analyze the relevant transactions to determine if the federal securities laws apply.
https://www.sec.gov/corpfin/framework-investment-contract-an...
Ripple (as distinct from the XRP token it created), currently holds a large block of uncirculated XRP created at the beginning of the network. This network does away with mining in favor of the Ripple Protocol Consensus Algorithm:
https://ripple.com/files/ripple_consensus_whitepaper.pdf
This protocol foregoes mining in favor of a system without proof-of-work. The tradeoff (or feature, depending on how you look at it) was that the distribution mechanism would involve Ripple itself giving away and selling XRP. This gave Ripple complete control of the money stock at the network's inception.
This is very different from how Bitcoin currency distribution works.
> The U.S. Supreme Court's Howey case and subsequent case law have found that an "investment contract" exists when there is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.[5] The so-called "Howey test" applies to any contract, scheme, or transaction, regardless of whether it has any of the characteristics of typical securities.[6] The focus of the Howey analysis is not only on the form and terms of the instrument itself (in this case, the digital asset) but also on the circumstances surrounding the digital asset and the manner in which it is offered, sold, or resold (which includes secondary market sales). Therefore, issuers and other persons and entities engaged in the marketing, offer, sale, resale, or distribution of any digital asset will need to analyze the relevant transactions to determine if the federal securities laws apply.
https://www.sec.gov/corpfin/framework-investment-contract-an...
Ripple (as distinct from the XRP token it created), currently holds a large block of uncirculated XRP created at the beginning of the network. This network does away with mining in favor of the Ripple Protocol Consensus Algorithm:
https://ripple.com/files/ripple_consensus_whitepaper.pdf
This protocol foregoes mining in favor of a system without proof-of-work. The tradeoff (or feature, depending on how you look at it) was that the distribution mechanism would involve Ripple itself giving away and selling XRP. This gave Ripple complete control of the money stock at the network's inception.
This is very different from how Bitcoin currency distribution works.
In layperson terms with Bitcoin you can’t sue the network. With ripple you can.
Bitcoin wasn’t sold by a company entity and xrp was.
Bitcoin wasn’t sold by a company entity and xrp was.
Then so was Ethereum, yet they seem to be off the hook. And they are also moving to a distribution model where the owners gets to mint and sell too.
Thus far, it was said that it was sufficiently long ago for the initial distribution to not matter anymore. But all that is true for Ripple, too.
Not to defend Ripple or any one else project, but a casual observer could be forgiven to suspect more things have happened behind the scenes than what is being communicated.
Thus far, it was said that it was sufficiently long ago for the initial distribution to not matter anymore. But all that is true for Ripple, too.
Not to defend Ripple or any one else project, but a casual observer could be forgiven to suspect more things have happened behind the scenes than what is being communicated.
Although, Ethereum's "genesis block" was mined using PoW.
Miners and node operators had to generate the data for the Genesis Block by themselves by scraping the Bitcoin chain which contained the crowdsale transaction data. The Ethereum Foundation only provided a script for scraping the Bitcoin chain. See here: https://blog.ethereum.org/2015/07/27/final-steps/
(The genesis block contains all the ETH token allocations for each crowdsale account)
Another technicality is that Ether was sold as a commodity, for the purpose of using it for "gas" to use for computational resources. Ripple on the other hand is not used for gas, you don't pay for computing resources. You only pay a tiny fee in XRP per transaction.
Miners and node operators had to generate the data for the Genesis Block by themselves by scraping the Bitcoin chain which contained the crowdsale transaction data. The Ethereum Foundation only provided a script for scraping the Bitcoin chain. See here: https://blog.ethereum.org/2015/07/27/final-steps/
(The genesis block contains all the ETH token allocations for each crowdsale account)
Another technicality is that Ether was sold as a commodity, for the purpose of using it for "gas" to use for computational resources. Ripple on the other hand is not used for gas, you don't pay for computing resources. You only pay a tiny fee in XRP per transaction.
Ethereum transferred their funds to a Swiss foundation (a "Stiftung") if I remember correctly. And they are not moving to a distribution model where they can mint ether. They can still finance their operations from the initial 12 million ethers credited to the foundation - of which about 460k remain (that's currently about $280 mio: https://etherscan.io/address/0xde0b295669a9fd93d5f28d9ec85e4... )
>>And they are also moving to a distribution model where the owners gets to mint and sell too.
You're conflating the multitude of individual ETH owners, who now have the ability to stake ETH to get a right to become a validator and earn new ETH, with a singular entity in control of the vast majority of XRP.
You're conflating the multitude of individual ETH owners, who now have the ability to stake ETH to get a right to become a validator and earn new ETH, with a singular entity in control of the vast majority of XRP.
When did ethereum offer tokens for sale?
Ethereum's managers pre-mined 72 million coins, kept about 12 million to sell at later times, and sold many to the public (and also "sold" many to themselves personally, though we only know of the self-buys they chose to disclose-- the structure guarenteed more coins for insiders the more that they raised from the "public" so there was a big incentive for insiders to anonymously participate in the public sale).
They forbid US persons from purchasing in their sale, which might be part of the reason the SEC never took action even though many people ignore the prohibition. You might assume that fact that they've subsequently lied and dissembled about the massive premine, or multiple times reduced the issuance rate of mined coins to prop up the price as they sold their own premined positions might count against them, but apparently not.
They forbid US persons from purchasing in their sale, which might be part of the reason the SEC never took action even though many people ignore the prohibition. You might assume that fact that they've subsequently lied and dissembled about the massive premine, or multiple times reduced the issuance rate of mined coins to prop up the price as they sold their own premined positions might count against them, but apparently not.
>>You might assume that fact that they've subsequently lied and dissembled about the massive premine,
Who's "they". No one has lied about the premine. The crowdsale is well-documented by Ethereum-based information resources and there has been absolutely no effort to conceal or mislead about it.
>> or multiple times reduced the issuance rate of mined coins to prop up the price as they sold their own premined positions might count against them
You're conflating the community, which is the amorphous entity that has reduced the issuance rate, in accordance with a long-standing plan to adjust it to balance the need for security, and the need for token store-of-value functionality, and the Ethereum Foundation, which has no say in the hard forks that the community choose to support or not support.
Who's "they". No one has lied about the premine. The crowdsale is well-documented by Ethereum-based information resources and there has been absolutely no effort to conceal or mislead about it.
>> or multiple times reduced the issuance rate of mined coins to prop up the price as they sold their own premined positions might count against them
You're conflating the community, which is the amorphous entity that has reduced the issuance rate, in accordance with a long-standing plan to adjust it to balance the need for security, and the need for token store-of-value functionality, and the Ethereum Foundation, which has no say in the hard forks that the community choose to support or not support.
> Who's "they". No one has lied about the premine. The crowdsale is well-documented by Ethereum-based information resources and there has been absolutely no effort to conceal or mislead about it.
The founders and managers of Ethereum, who repeatability lie and claim that the premine was ~10% or that it wasn't substantially premined https://twitter.com/VitalikButerin/status/120847121595601305...
The founders and managers of Ethereum, who repeatability lie and claim that the premine was ~10% or that it wasn't substantially premined https://twitter.com/VitalikButerin/status/120847121595601305...
In that tweet Buterin claims that the stake of the founders, including the non-profit Ethereum Foundation, was 11%. They're defining "premine" in a way to exclude "crowdsale", which is perfectly reasonable.
Buterin elaborates on that here:
https://twitter.com/VitalikButerin/status/120909416365814988...
Buterin elaborates on that here:
https://twitter.com/VitalikButerin/status/120909416365814988...
It is absolutely unreasonable. Buterin is willingly committing fraud and you should be ashamed of yourself for defending it. He has a past history of fraud, so it's unsurprising-- it's less clear to me what you get out of it.
A pre-mine doesn't stop being a pre-mine after you've sold it and lined your pockets with the proceeds. When they eventually finish[1] dumping the rest of their coins on misguided members of the public will the pre-mine be 0%? Obviously not.
Moreover, the self same people made purchases in the "crowdsale" and then immediately paid those funds back to themselves. E.g. Hoskinson extracted a million dollars the day the presale closed.
> the stake of the founders, including the non-profit Ethereum Foundation, was 11%
Check your math because 12 million out of 72 million isn't 11%... nor does that include the additional funds 'purchased' in their share offerings (in scare-quotes because it's not really correct to call something a purchase when it was paid back).
Ethereum was 100% pre-mined. They then sold about ~80% of the pre-mine to the public (and to themselves, with no known upper-bound on percentage of the self-sales) and pocketed the proceeds. After that they issued additional coins via mining to the public and diluted their positions but later substantially cut the supply of mining off when the price kept falling. The plan now is to soon eliminate the mining and award the coins that would have been mined to existing large position holders (parties with more than $20k worth of ethereum).
When this transition is complete the issuance will be extremely similar to ripple's -- e.g. a huge amount created by the system's operator, a large portion sold by that operator to the public over time, and a portion given away as lotteries. The primary difference is that in ethereum the lottery part was conducted directly by the system through diluting the operators shares rather than being handed out in airdrops as Ripple did, and -- of course-- the relative amounts of these groups. Ripple has been a lot greedier about it.
[1] Technically they'll never finish, because of the more recent plans to continue to award these massive pre-mine holders with additional coins in perpetuity in exchange for taking them out of circulation, they'll be able to largely preserve their position while continuing to dump on the public.
A pre-mine doesn't stop being a pre-mine after you've sold it and lined your pockets with the proceeds. When they eventually finish[1] dumping the rest of their coins on misguided members of the public will the pre-mine be 0%? Obviously not.
Moreover, the self same people made purchases in the "crowdsale" and then immediately paid those funds back to themselves. E.g. Hoskinson extracted a million dollars the day the presale closed.
> the stake of the founders, including the non-profit Ethereum Foundation, was 11%
Check your math because 12 million out of 72 million isn't 11%... nor does that include the additional funds 'purchased' in their share offerings (in scare-quotes because it's not really correct to call something a purchase when it was paid back).
Ethereum was 100% pre-mined. They then sold about ~80% of the pre-mine to the public (and to themselves, with no known upper-bound on percentage of the self-sales) and pocketed the proceeds. After that they issued additional coins via mining to the public and diluted their positions but later substantially cut the supply of mining off when the price kept falling. The plan now is to soon eliminate the mining and award the coins that would have been mined to existing large position holders (parties with more than $20k worth of ethereum).
When this transition is complete the issuance will be extremely similar to ripple's -- e.g. a huge amount created by the system's operator, a large portion sold by that operator to the public over time, and a portion given away as lotteries. The primary difference is that in ethereum the lottery part was conducted directly by the system through diluting the operators shares rather than being handed out in airdrops as Ripple did, and -- of course-- the relative amounts of these groups. Ripple has been a lot greedier about it.
[1] Technically they'll never finish, because of the more recent plans to continue to award these massive pre-mine holders with additional coins in perpetuity in exchange for taking them out of circulation, they'll be able to largely preserve their position while continuing to dump on the public.
>>Buterin is willingly committing fraud and you should be ashamed of yourself for defending it.
You should be ashamed of yourself for willfully spreading disinformation.
It's a perfectly reasonable argument, and only someone acting in bad faith would characterize it in such a baseless and inflammatory way, as "willingly committing fraud".
The tweet:
>>That includes the presale. Those coins were assigned in an open process anyone could participate in, like mining. It's arguably more accurate to say those coins were mined, the mining algorithm was just sending BTC to 36PrZ1KHYMpqSyAQXSG8VwbUiq2EogxLo2
The expanation found in the tweet stands.
>>Check your math because 12 million out of 72 million isn't 11%...
I'm assuming he's referring to the amount allocated to the Ethereum Foundation and founders as a share of the total amount issued at the time he posted the tweet.
But the primary point is, he's making a case that an amount allocated for an open presale is not a premine.
>>nor does that include the additional funds 'purchased' in their share offerings
The BTC spent went to a non-profit foundation, so not accessible to the founders for personal reimbursement, absent complex fraud.
Your conspiracy theories notwithstanding, the founders were on equal footing with every one else in the crowdsale.
You should be ashamed of yourself for willfully spreading disinformation.
It's a perfectly reasonable argument, and only someone acting in bad faith would characterize it in such a baseless and inflammatory way, as "willingly committing fraud".
The tweet:
>>That includes the presale. Those coins were assigned in an open process anyone could participate in, like mining. It's arguably more accurate to say those coins were mined, the mining algorithm was just sending BTC to 36PrZ1KHYMpqSyAQXSG8VwbUiq2EogxLo2
The expanation found in the tweet stands.
>>Check your math because 12 million out of 72 million isn't 11%...
I'm assuming he's referring to the amount allocated to the Ethereum Foundation and founders as a share of the total amount issued at the time he posted the tweet.
But the primary point is, he's making a case that an amount allocated for an open presale is not a premine.
>>nor does that include the additional funds 'purchased' in their share offerings
The BTC spent went to a non-profit foundation, so not accessible to the founders for personal reimbursement, absent complex fraud.
Your conspiracy theories notwithstanding, the founders were on equal footing with every one else in the crowdsale.
> The point is, he's making a case that an amount allocated for an open presale is not a premine.
Simply repeating a lie does not make it true. The creators of ethereum created 72 million ether. They sold 60 million of it to themselves and others and they benefited from the sale. This is precisely what a premine is, and it is almost identical in structure to other premined altcoins.
They subsequently paid the funds received from the presale to themselves in their entirety. The foundation's current funds come from selling a large portion ($100 million USD) of the pre-mined coins at around Ethereum's all time high in 2018. ( https://www.trustnodes.com/2019/12/13/ethereum-foundation-so... ).
> Your conspiracy theories notwithstanding, the founders were on equal footing with every one else in the crowdsale.
100% percent of the funds in the pre-sale were eventually paid back to the founders and their employees starting with a million dollar payment to their CEO the literal day the presale closed (and a few days before he left the org). Anyone who stood to be repaid from their own payments was in a substantially advantaged position.
The earliest presale participants also participated at significantly reduced prices.
"Salting" the tip jar by participating in presales at reduced rates or with rebates was an established fraudulent practice in cryptocurrency prior to Ethereum's creation, one that Ethereum's CEO previously also engaged in prior altcoins.
Moreover, the terms of their presale expressly prohibited the participation of US persons. There is no way in which you can claim there was a broadly equal playing field here.
Even if the presale had been an equal playing field that wouldn't have changed the fact that the issuers of ethereum conducted a security sale which directly enriched themselves to the tune of millions of dollars before the system was even running, and has subsequently benefited them to the tune of hundreds of millions of dollars.
Simply repeating a lie does not make it true. The creators of ethereum created 72 million ether. They sold 60 million of it to themselves and others and they benefited from the sale. This is precisely what a premine is, and it is almost identical in structure to other premined altcoins.
They subsequently paid the funds received from the presale to themselves in their entirety. The foundation's current funds come from selling a large portion ($100 million USD) of the pre-mined coins at around Ethereum's all time high in 2018. ( https://www.trustnodes.com/2019/12/13/ethereum-foundation-so... ).
> Your conspiracy theories notwithstanding, the founders were on equal footing with every one else in the crowdsale.
100% percent of the funds in the pre-sale were eventually paid back to the founders and their employees starting with a million dollar payment to their CEO the literal day the presale closed (and a few days before he left the org). Anyone who stood to be repaid from their own payments was in a substantially advantaged position.
The earliest presale participants also participated at significantly reduced prices.
"Salting" the tip jar by participating in presales at reduced rates or with rebates was an established fraudulent practice in cryptocurrency prior to Ethereum's creation, one that Ethereum's CEO previously also engaged in prior altcoins.
Moreover, the terms of their presale expressly prohibited the participation of US persons. There is no way in which you can claim there was a broadly equal playing field here.
Even if the presale had been an equal playing field that wouldn't have changed the fact that the issuers of ethereum conducted a security sale which directly enriched themselves to the tune of millions of dollars before the system was even running, and has subsequently benefited them to the tune of hundreds of millions of dollars.
>>Simply repeating a lie does not make it true. The creators of ethereum created 72 million ether.
Once again: a distribution established by a process with open access, with all parties on equal footing, can be reasonably considered to not be a premine.
Calling it a lie, and spouting other inflammatory accusations, doesn't change that.
>>100% percent of the funds in the pre-sale were eventually paid back to the founders and their employees starting with a million dollar payment to their CEO the literal day the presale closed (and a few days before he left the org).
I don't believe word you say. If you're claiming a massive embezzlement of the BTC funds, go ahead and prove it. The BTC address is known so you should be able to track every transaction.
Thus far you've exposed yourself as engaged in little more than a disinfo campaign.
>>Even if the presale had been an equal playing field that wouldn't have changed the fact that the issuers of ethereum conducted a security sale
The SEC has already said that since the pre-sale happened before the 2017 ICO bulletin they issued, it was exempt from enforcement action.
Maybe you could start helping crypto adoption instead trying to lord over people by claiming you know better than them what market options they should utilize, and that it's for their own good for those market options to be shut down and disrupted by government agencies.
Once again: a distribution established by a process with open access, with all parties on equal footing, can be reasonably considered to not be a premine.
Calling it a lie, and spouting other inflammatory accusations, doesn't change that.
>>100% percent of the funds in the pre-sale were eventually paid back to the founders and their employees starting with a million dollar payment to their CEO the literal day the presale closed (and a few days before he left the org).
I don't believe word you say. If you're claiming a massive embezzlement of the BTC funds, go ahead and prove it. The BTC address is known so you should be able to track every transaction.
Thus far you've exposed yourself as engaged in little more than a disinfo campaign.
>>Even if the presale had been an equal playing field that wouldn't have changed the fact that the issuers of ethereum conducted a security sale
The SEC has already said that since the pre-sale happened before the 2017 ICO bulletin they issued, it was exempt from enforcement action.
Maybe you could start helping crypto adoption instead trying to lord over people by claiming you know better than them what market options they should utilize, and that it's for their own good for those market options to be shut down and disrupted by government agencies.
> Who's "they".
ETH Cofounders got to keep 10% of the premined pool; Ethereum Foundation also got 10% of the premined pool. I'd presume these are "they".
ETH Cofounders got to keep 10% of the premined pool; Ethereum Foundation also got 10% of the premined pool. I'd presume these are "they".
When did ETH cofounders lie about the premine?
lol, what? This is not how things work in Ethereum. The foundation has the authority to do anything it wants, despite the community's wishes. The DAO bailout hard fork showed that very well.
The Ethereum Classic community wants to have a word with you.
The foundation has no authority over the protocol. It's purely a R&D grant issuer. The protocol is completely consensus based. The foundation doesn't even have its own full node client implementation. You're blatantly trying to deceive people.
In late 2013, with expected delivery December 2014.
I was poor, in college, and turned $70 of Bitcoin during the presale into $40,000 of Ethereum when I sold in late 2017.
Do I get to call myself an angel investor now? ;)
I was poor, in college, and turned $70 of Bitcoin during the presale into $40,000 of Ethereum when I sold in late 2017.
Do I get to call myself an angel investor now? ;)
Not until you get at least one more zero
2014
Thank you for your great writeup and sources.
Been following cryptocurrency for almost a decade now. I would generalize that XRP is an asset that is primarily purchased by speculators with sour grapes that they missed <$1 Bitcoins, and hope to see the same sort of returns despite the significant differences in technology and organizational structure.
I don't feel like there is much 'smart money' investing in XRP, so I think increased regulatory oversight is probably beneficial here.
I don't feel like there is much 'smart money' investing in XRP, so I think increased regulatory oversight is probably beneficial here.
Exactly. I'm "the Bitcoin guy" in my circle as I invested very early, so many friends seek advice and almost every one has the exact logic you mentioned.
Which is why maybe it’s a good investment? I always buy cheap stocks because I know people feel like it’s more affordable, and has potential for larger returns, even if it ‘s not true.
Bitcoin is infinitely divisible. You can buy $50 of Bitcoin, if you want to invest $50. The "affordability" doesn't enter here.
It's not the affordability, it's the leverage.
A $1 increase on a $1 investment is already a 100% return. And it's much easier to imagine a coin to go from $1 to $2 then it is to go from $20k to $40k.
A $1 increase on a $1 investment is already a 100% return. And it's much easier to imagine a coin to go from $1 to $2 then it is to go from $20k to $40k.
> Bitcoin is infinitely divisible
no. it goes down to 8 decimal places. (a satoshi)
no. it goes down to 8 decimal places. (a satoshi)
The dollar price of a single unit of any tradable security-like thing is completely arbitrary: market cap, market depth and inherent value are all that really matter.
Cheaper units are almost certainly not indicative of something being a better investment, I'd say the opposite is more often true: ex. penny stocks or any of the long-tail cryptocurrencies that trade at fractions of a penny.
Cheaper units are almost certainly not indicative of something being a better investment, I'd say the opposite is more often true: ex. penny stocks or any of the long-tail cryptocurrencies that trade at fractions of a penny.
In cryptocurrencies, "market cap" is basically a complete fiction, and totally nonsensical.
I mostly agree with what you're saying. But there is another aspect to this, based on the "greater fool" theory of investing. A lower-priced stock or cryptocurrency could be more likely to attract a larger number of unsophisticated buyers (Robinhood customers etc.)
Especially for low-priced cryptocurrency, the marketing pitch of "it's like bitcoin for $1" could be very appealing, if you spread it on Reddit and other forums.
So from a pump-and-dump perspective it may be more promising.
Especially for low-priced cryptocurrency, the marketing pitch of "it's like bitcoin for $1" could be very appealing, if you spread it on Reddit and other forums.
So from a pump-and-dump perspective it may be more promising.
> Especially for low-priced cryptocurrency, the marketing pitch of "it's like bitcoin for $1" could be very appealing, if you spread it on Reddit and other forums.
If you went back a decade in time while you were at it, maybe. But there's been such a relentless tide of cryptocurrency-related scams being spammed on forum boards since Bitcoin hit popular awareness that the only thing I can think of that would be less appealing is someone trying to flog discount pharmaceuticals.
If you went back a decade in time while you were at it, maybe. But there's been such a relentless tide of cryptocurrency-related scams being spammed on forum boards since Bitcoin hit popular awareness that the only thing I can think of that would be less appealing is someone trying to flog discount pharmaceuticals.
Protecting greedy and ignorant people is good?
Everyone is greedy and ignorant to certain extent. Protecting people from being abused through trickery they don't have the smarts to defend themselves against (which, again, is everyone, for sufficiently smart trickery) is good.
Does Jed McCaleb (original Ripple founder and current Stellar CTO) get off scot-free? He's sold XRP worth $175m and owns $billions more. But it looks like he may be saved by the statute of limitations! He left in 2013 and a quick search indicates that the statute of limitations may be 5 years. It would be pretty crazy if this was all ruled illegal and he got to keep it all because the SEC took longer than 5 years to get in gear.
Will they go after Stellar next?
Will they go after Stellar next?
They certainly should, Stellar is pretty much structured like Ripple.
Another interesting fact about McCaleb: he started MtGox (and sold it to magical tux)
Another interesting fact about McCaleb: he started MtGox (and sold it to magical tux)
> and sold it to magical tux
After it was robbed once and was insolvent without disclosing it...
Also the 2011 big mtgox theft after the acquisition came in via Jed's still present administrative account (he retained administrative access because part of the terms of the sale entitled him to a share of revenue).
After it was robbed once and was insolvent without disclosing it...
Also the 2011 big mtgox theft after the acquisition came in via Jed's still present administrative account (he retained administrative access because part of the terms of the sale entitled him to a share of revenue).
I decoded some more of the indirectly referenced parties in this reddit post: https://www.reddit.com/r/CryptoCurrency/comments/kiddap/sec_...
[deleted]
FYI: I collect a best of crypto quotes over at open blockchains, see https://github.com/openblockchains/crypto-quotes
To quote Nouriel Roubini, Economist:
No use ever, past, present and future for XRP and Ripple products... it is already flopping after spending a fortune and printing a huge amount of totally useless XRP. (Now the XRP army of Twitter trolls, bots, hired guns and zealots will attack again...)
To quote Nouriel Roubini, Economist:
No use ever, past, present and future for XRP and Ripple products... it is already flopping after spending a fortune and printing a huge amount of totally useless XRP. (Now the XRP army of Twitter trolls, bots, hired guns and zealots will attack again...)
Crypto currency n general seems like a great way to learn about and understand why we have the financial rules for so many other things that we do.
I like how after every big Crypto scandal you see calls for "Well we should have X to prevent this from happening", and X is something virtually identical to a regulation/monetary policy put in place after some banking scandal or panic. History repeated itself on an accelerated scale thanks to the internet.
I think the other observation is that money schemes have became so huge and out of control that they are now legal and regulated. We wouldn’t have had the stock market otherwise.
I had the honor of meeting Nouriel at the World Economic Forum, at an event held by CV VC (a Swiss blockchain/crypto-focused VC which also invested in my startup).
He gave a scathing talk criticizing cryptocurrencies and blockchains and all other things in the space. I shook his hand afterwards and told him that while I disagreed with some of his opinions, I really respected his conviction to give a talk to a room full of "crypto zealots" and stick to his opinions.
A very kind fellow in conversation, but he sure knows how to deliver bitter critique.
He gave a scathing talk criticizing cryptocurrencies and blockchains and all other things in the space. I shook his hand afterwards and told him that while I disagreed with some of his opinions, I really respected his conviction to give a talk to a room full of "crypto zealots" and stick to his opinions.
A very kind fellow in conversation, but he sure knows how to deliver bitter critique.
Watched Nouriel absolutely destroy Joe Lubin in a debate at Lubin's conference, in front of hundreds of Eth (and presumably Lubin) supporters, who by the end had no doubts who won. And yes, quite a nice guy in private conversation.
I think the best quote was from Matt Levine in his "Money Stuff" Bloomberg column. I can't find it right now but it was essentially he was talking about paper key practices and said:
"Imagine you go into a room of computer scientists and say: 'I've developed the most secure form of money possible, it's so secure you can't keep it on your computer and you have to dig a hole in your backyard and keep it there' you'd be laughed out of the room."
"Imagine you go into a room of computer scientists and say: 'I've developed the most secure form of money possible, it's so secure you can't keep it on your computer and you have to dig a hole in your backyard and keep it there' you'd be laughed out of the room."
Easier than digging a hole in my backyard for a $million in cash.
That's probably true. Cash becomes very unwieldy in large amounts. In part this is intentional to make it more difficult to carry $millions across borders undetected. It's not a coincidence that US$ in excess of $20 denomination is rare.
In Europe, there's the E500 bill, which is a bit more practical for large amounts, and some have expressed a desire to withdraw it from circulation for this reason.
In Europe, there's the E500 bill, which is a bit more practical for large amounts, and some have expressed a desire to withdraw it from circulation for this reason.
The 500EUR bill exists because Germans want it to exist. Historically Germans have been adverse to things like credit cards and other third-party financial records, largely because of the whole Nazi state thing.
It's more related to the superinflation during the Weimar period than the Nazi state. The Nazi's rise can be directly correlated (if not caused) by the inflation.
That's why the Bundesbank have always been inflation hawks and had to be convinced that the Euro would remain similar in focus to the Deutschmark.
Whether that is still true after 2008 is an interesting question :)
That's why the Bundesbank have always been inflation hawks and had to be convinced that the Euro would remain similar in focus to the Deutschmark.
Whether that is still true after 2008 is an interesting question :)
I don't understand the connection. Surely inflation hawks would want generally smaller bills? But even then only the stupidest among them would also think this could be achieved via printing specific denominations rather than interest rate and other real fiscal policy.
My understanding as an expat was the same as alasdair's - 2010-2015 I saw plenty of Germans drop a couple 500s to pay for hotel stays, major appliances, etc. Few people had a credit card and those that did didn't want to use it domestically. It's changing now but people still carry more cash and true credit card payments are still often impossible even as bank cards are now more common.
I guess you could argue this is also related to Weimar inflation, but I don't think it's so specific. Germany has seen multiple major regime changes in the space of one lifetime.
My understanding as an expat was the same as alasdair's - 2010-2015 I saw plenty of Germans drop a couple 500s to pay for hotel stays, major appliances, etc. Few people had a credit card and those that did didn't want to use it domestically. It's changing now but people still carry more cash and true credit card payments are still often impossible even as bank cards are now more common.
I guess you could argue this is also related to Weimar inflation, but I don't think it's so specific. Germany has seen multiple major regime changes in the space of one lifetime.
The rise Nazi is more a result of the sweeping austerity program Brüning's administration embarked on at the onset of the Great Depression. The hyperinflation episode took place in 1922-1923, Nazi's took power in 1933. It's a bit like blaming Bill Clinton for the slow 2010s recovery.
The scale of the cutback that Brüning enacted from 1930 to 1932 is truly staggering. The authors estimate that Brüning cut German government spending by about 15 percent, after inflation, from 1930 to 1932. He raised income taxes on high earners by an average of 10 percent, and slashed unemployment, pension, and welfare benefits. The economic consequences were horrific. GDP fell by 15 percent, as did government revenue. Unemployment increased from 22.7 percent to 43.8 percent. Brüning came to be known as the “Hunger Chancellor.”
The scale of the cutback that Brüning enacted from 1930 to 1932 is truly staggering. The authors estimate that Brüning cut German government spending by about 15 percent, after inflation, from 1930 to 1932. He raised income taxes on high earners by an average of 10 percent, and slashed unemployment, pension, and welfare benefits. The economic consequences were horrific. GDP fell by 15 percent, as did government revenue. Unemployment increased from 22.7 percent to 43.8 percent. Brüning came to be known as the “Hunger Chancellor.”
Depends where you live... in Asia in the 17/1800s, people literally buried gold and silver in their backyards
Umm, this is sort of what Turing, arguably the father of computer science, actually did once (allegedly)
https://www.reuters.com/article/us-markets-saft/saft-on-weal...
https://www.reuters.com/article/us-markets-saft/saft-on-weal...
Yeah good thing you stayed out of this no use crypto currencies stuff for the last five years, you would have lost a fortune, because well, it has no use and nobody wants it.
Roubini sure called that one.
Roubini sure called that one.
Market can stay irrational, yadda yadda.
Sure, make that argument after it's down over a 2 or 3 year period. Not before
You pointed to the duration of the bull run, I spoke of the general principle that bubbles can persist for quite some time. Why do we need to observe the (predicted) bubble's pop before agreeing that bubbles have varying timelines? This statement could be removed from the Bitcoin context and still make sense.
Ironically, this could increase the exchange rate for XRP. Ripple controls a large block of uncirculated token that it sells. With this legal action, I suspect that supply will no longer be entering the market.
Unlike Bitcoin, which issues new currency units through mining, XRP is issued by Ripple. The case against Ripple appears to revolve around this point: is the XRP token a security?
Unlike Bitcoin, which issues new currency units through mining, XRP is issued by Ripple. The case against Ripple appears to revolve around this point: is the XRP token a security?
Jed McCaleb, one of the founders of what would become Ripple, has still a few billions XRP left (https://cointelegraph.com/news/ripple-co-founder-jed-mccaleb...) and he is selling as fast as he is allowed to (http://jedmccaleb.com/blog/my-settlement-victory-with-ripple...).
If history is any indicator, the fundamentals don't actually matter.
The only things that matter are hype, and people buying/selling according to what people think other people are going to do.
Nearly every crypto-related story comes with narratives that it's good for the exchange rate for various reasons, but ultimately the price goes up (temporarily) because people expect other people to expect the price to go up and want to get ahead of it.
The only things that matter are hype, and people buying/selling according to what people think other people are going to do.
Nearly every crypto-related story comes with narratives that it's good for the exchange rate for various reasons, but ultimately the price goes up (temporarily) because people expect other people to expect the price to go up and want to get ahead of it.
Yes, so much this. Fundamentals never mattered in crypto.
The true winners of crypto will be the ones who can come up with better models of human nature and hype, and all the factors at play, and leverage that to their success, just like the true winners at casinos are those who can learn to count cards, except with crypto they won't be able to kick you out.
It's also a market where market manipulation and insider trading is fair game, and that needs to be modelled in as well.
It's an interesting time we live in, and it's an interesting anarchic economy with its own interesting set of problems to solve.
The true winners of crypto will be the ones who can come up with better models of human nature and hype, and all the factors at play, and leverage that to their success, just like the true winners at casinos are those who can learn to count cards, except with crypto they won't be able to kick you out.
It's also a market where market manipulation and insider trading is fair game, and that needs to be modelled in as well.
It's an interesting time we live in, and it's an interesting anarchic economy with its own interesting set of problems to solve.
Not even centralization? What happens if the SEC simply confiscates the servers? Wouldn't trading simply cease completely rendering all XRP instantly useless?
In the short term, the market is a voting machine. In the long term, it is a weighing machine. If there is "real" value there it will be reflected in the price and if there is not, that will be reflected in the price as well.
The problem is that humans are impatient and even "short term" may be a couple of decades before it all shakes out.
The problem is that humans are impatient and even "short term" may be a couple of decades before it all shakes out.
I still think there's a pretty clear correlation between technical innovation of cryptocurrencies and their market cap, even though there are certainly exceptions to this rule (ripple being the prime exemplar)
For an illiquid commodity like gold, I could see this being true. But in the crypto markets, participants have plenty of other choices. More likely is the "fire sale" scenario that was so wonderfully depicted in the film "Margin Call". Early investors are willing to unload at pennies on the dollar just to survive another day ;)
Looks like CrossTower has already de-listed XRP from its exchange. Incredible how fast information gets digested in crypto markets!
https://thecryptoreport.com/an-sec-victory-in-ripple-case-wo...
Looks like CrossTower has already de-listed XRP from its exchange. Incredible how fast information gets digested in crypto markets!
https://thecryptoreport.com/an-sec-victory-in-ripple-case-wo...
Gold futures are very liquid. They are as liquid as stocks. Any commodity future is much more liquid than any crypto.
XRP holders: So, what you're telling me, is that the music is about to stop, and we're going to be left holding the biggest bag of odorous excrement ever assembled in the history of capitalism.
You: I’m not sure that I would put it that way, but let me clarify using your analogy. What this model shows is the music, so to speak, just slowing. If the music were to stop, as you put it, then this model wouldn't even be close to that scenario. It would be considerably worse.
You: I’m not sure that I would put it that way, but let me clarify using your analogy. What this model shows is the music, so to speak, just slowing. If the music were to stop, as you put it, then this model wouldn't even be close to that scenario. It would be considerably worse.
XRP is a security, so is Ethereum, as both have been issued to collect initial funding. Bitcoin is not a security because it hasn't been issued to collect funding.
To me the distinction is very clear and simple. However if I really needed money I still would probably issue an ICO and claim it is not a security because there is a big possibility that it will go unnoticed as SEC goes only after the bigger fish.
To me the distinction is very clear and simple. However if I really needed money I still would probably issue an ICO and claim it is not a security because there is a big possibility that it will go unnoticed as SEC goes only after the bigger fish.
The SEC disagrees re: Ether
https://www.axios.com/sec-official-ether-is-not-a-security-9...
https://www.axios.com/sec-official-ether-is-not-a-security-9...
Ethereum does not follow the SEC's definition of "decentralized":
However, in Ethereum's case, it is designed to literally implode due to ice age if Vitalik doesn't intervene. The SEC was probably not cognizant of this fact when they made their statement.
https://ethgasstation.info/blog/what-is-ethereums-ice-age/
If the network on which the token or coin is to function is sufficiently decentralized – where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts – the assets may not represent an investment contract.However, in Ethereum's case, it is designed to literally implode due to ice age if Vitalik doesn't intervene. The SEC was probably not cognizant of this fact when they made their statement.
https://ethgasstation.info/blog/what-is-ethereums-ice-age/
Core dev of ETH here. There are at least 100 people from independent teams unrelated to the Ethereum Foundation working on the transition to proof of stake for ETH, which just launched this December 1st. https://www.coindesk.com/ethereum-2-0-beacon-chain-goes-live.... This did not require any "Vitalik intervention". My team is not even affiliated with the Ethereum Foundation and we maintain one of the main implementations of the protocol: https://github.com/prysmaticlabs/prysm
The existence of Ethereum Classic disproves your assumptions of Vitalik's unlimited power over the course of the development of Ethereum.
Ethereum Classic is completely irrelevant to the wider Ethereum ecosystem.
There is no real world use. It probably wouldn't even exist without Grayscale.
There is no real world use. It probably wouldn't even exist without Grayscale.
You’re missing the point. The point is that the chain can fork at anytime. If the community doesn’t like the difficulty bomb, they fork it. Ethereum classic is an example of that happening.
It so happens that the consensus of the majority decided to stick with Ethereum rather than classic. But still no single person or entity gets to decide.
It so happens that the consensus of the majority decided to stick with Ethereum rather than classic. But still no single person or entity gets to decide.
Forks can not be functional for any practical purpose. Because every release is time limited, you have to stick to the official release at every time, or else fork completely.
The Ethereum foundation kept a huge stash from the pre-mine, so you'd have a hostile actor with a large position on your forked chain, enough to crash the price of any nascent chain. This combination is a governance model rooted in game theory.
Ethereum Classic shows pretty well how this works in practice. There was controversy around the DAO, yet no fork could be kept functional. It is a Grayscale project which they will keep around as long as people are willing to speculate on it. Nobody pretends it has any real use.
The Ethereum foundation kept a huge stash from the pre-mine, so you'd have a hostile actor with a large position on your forked chain, enough to crash the price of any nascent chain. This combination is a governance model rooted in game theory.
Ethereum Classic shows pretty well how this works in practice. There was controversy around the DAO, yet no fork could be kept functional. It is a Grayscale project which they will keep around as long as people are willing to speculate on it. Nobody pretends it has any real use.
>>The Ethereum foundation kept a huge stash from the pre-mine, so you'd have a hostile actor with a large position on your forked chain, enough to crash the price of any nascent chain.
This is completely false. The Ethereum Foundation has less than 0.5M ETH, or less than 1% of the total supply.
This is completely false. The Ethereum Foundation has less than 0.5M ETH, or less than 1% of the total supply.
the existence of Ethereum classic doesn't affect the governance of Ethereum in the same way that stellar does not make a difference to the governance of ripple.
Stellar is more like LTC as McCaleb took Ripple's code and forked it.
But Ethereum Classic and Ethereum share a common blockchain history and it proves that the community doesn't always follow blindly the proposals of the Ethereum devs.
That event (a part of the community splitting of on a hardfork and forming Ethereum Classic) has affected the governance of Ethereum ever since. Not directly, but indirectly.
Every hardfork is now checked for contentious changes very thoroughly. The last major change that didn't make it because of that was the proposed change to the mining algorithm (granted, ProgPOW had other problems as well).
But Ethereum Classic and Ethereum share a common blockchain history and it proves that the community doesn't always follow blindly the proposals of the Ethereum devs.
That event (a part of the community splitting of on a hardfork and forming Ethereum Classic) has affected the governance of Ethereum ever since. Not directly, but indirectly.
Every hardfork is now checked for contentious changes very thoroughly. The last major change that didn't make it because of that was the proposed change to the mining algorithm (granted, ProgPOW had other problems as well).
Ethereum's Ice Age is real, but saying it will "implode if Vitalik doesn't intervene" is wrong on so many levels, and is incredibly misleading, if not outright dishonest.
---
The "Ice Age" is a builtin feature of the Ethereum chain, where the mining difficulty deliberately ramps up to an unreasonably level past a certain number of blocks. The only thing which can reset this is for nodes to update to a revised consensus algorithm.
The point of this is to essentially force a periodic "vote of confidence" -- instead of nodes passively not updating their software, every few years they HAVE to, or the difficulty bomb comes into play. Which means when a major hard fork update is proposed, no one can sit on the sidelines, they have to either choose the proposed fork, or propose an alternative for consensus to rally around. This cycle repeated every year or so, and has gone pretty smoothly so far.
The point of this is to encourage active participation, so nodes can't sit there and cast "passive no" votes to everything, they're incentivized to actively participate in the network's evolution.
Even if a node doesn't update, mining just slows down. Nothing anywhere in that process will cause the Ethereum network to "implode", that's IMO a rather emotionally charged way of describing things.
---
As to "requiring Vitalik's intervention" -- that's just an outright falsehood.
Not only is Vitalik not directly involved in the coding of any of the multiple independent Ethereum clients anymore, but there is a very large group of developers (of which the "founders" are a very small %) which work out the proposals for updates. And anyone can propose an update -- the software and the high level specs are all open source (and most are on github).
Proposing a full milestone update of the Ethereum network is complex, and probably more work than a single individual could pull off reliably -- but that's the whole point. There is no gatekeeper (and definitely not Vitalik), and the only way these things are accepted is because the larger community (validators/miners, folks running nodes, user community) all feel involved enough to accept or reject proposals.
You could remove every single founding developer, every incorporated organization, and the Ethereum network and it's developers would keep going. And the value of the token derives from it's use on the network, not on those companies turning a profit (and most of them are non-profits).
---
All of the above, along with numerous other aspects of the new beacon chain, are designed to incentivize decentralization of assets and control, as well as active over passive participation.
I think the SEC was quite well aware of the situation, and made the right call about Ethereum.
---
The "Ice Age" is a builtin feature of the Ethereum chain, where the mining difficulty deliberately ramps up to an unreasonably level past a certain number of blocks. The only thing which can reset this is for nodes to update to a revised consensus algorithm.
The point of this is to essentially force a periodic "vote of confidence" -- instead of nodes passively not updating their software, every few years they HAVE to, or the difficulty bomb comes into play. Which means when a major hard fork update is proposed, no one can sit on the sidelines, they have to either choose the proposed fork, or propose an alternative for consensus to rally around. This cycle repeated every year or so, and has gone pretty smoothly so far.
The point of this is to encourage active participation, so nodes can't sit there and cast "passive no" votes to everything, they're incentivized to actively participate in the network's evolution.
Even if a node doesn't update, mining just slows down. Nothing anywhere in that process will cause the Ethereum network to "implode", that's IMO a rather emotionally charged way of describing things.
---
As to "requiring Vitalik's intervention" -- that's just an outright falsehood.
Not only is Vitalik not directly involved in the coding of any of the multiple independent Ethereum clients anymore, but there is a very large group of developers (of which the "founders" are a very small %) which work out the proposals for updates. And anyone can propose an update -- the software and the high level specs are all open source (and most are on github).
Proposing a full milestone update of the Ethereum network is complex, and probably more work than a single individual could pull off reliably -- but that's the whole point. There is no gatekeeper (and definitely not Vitalik), and the only way these things are accepted is because the larger community (validators/miners, folks running nodes, user community) all feel involved enough to accept or reject proposals.
You could remove every single founding developer, every incorporated organization, and the Ethereum network and it's developers would keep going. And the value of the token derives from it's use on the network, not on those companies turning a profit (and most of them are non-profits).
---
All of the above, along with numerous other aspects of the new beacon chain, are designed to incentivize decentralization of assets and control, as well as active over passive participation.
I think the SEC was quite well aware of the situation, and made the right call about Ethereum.
Or XRP can just evaporate since the infrastructure required to actually distribute it will no longer be available once the company goes bankrupt (having to pay the various fines and lawsuits that follow).
Ironically, the underlying cryptocurrency infrastructure has little to do with the exchange rates. Most traders aren't actually moving cryptocurrency around so much as trading numbers back in forth inside of the exchanges. I suspect that speculators would continue to trade XRP as long as they're allowed to do so on exchanges, but most exchanges are smart enough to start delisting currencies when they get in trouble like this.
It's truly fascinating how little the underlying technology of cryptocurrencies matters to the exchange rates and how they're traded.
It's truly fascinating how little the underlying technology of cryptocurrencies matters to the exchange rates and how they're traded.
There have certainly been altcoins trading where during periods where there were literately zero reachable nodes running on the internet for them.
Fun fact: Ripple actually lost some of the early history of their ledger! Everything before block 32569 was lost.
Fun fact: Ripple actually lost some of the early history of their ledger! Everything before block 32569 was lost.
Most traders aren't actually moving cryptocurrency around so much as trading numbers back in forth inside of the exchanges.
Yes. That's why Coinbase got out of margin trading. They claim the SEC made them do it. But all the SEC did was to say that "delivery" meant delivery to the customer's wallet, not an entry on Coinbase's books. Coinbase was willing to exit margin trading rather than actually pay out.
Yes. That's why Coinbase got out of margin trading. They claim the SEC made them do it. But all the SEC did was to say that "delivery" meant delivery to the customer's wallet, not an entry on Coinbase's books. Coinbase was willing to exit margin trading rather than actually pay out.
I'm not sure it's entirely unreasonable on Coinbase's part to disallow margin trading if the margined securities are required to be delivered to the customer's wallet, and not just noted in their account. TD Ameritrade certainly doesn't let you transfer long stock bought on margin off the site - and for good reason! If the market moves against you, TD needs the assurance that they can liquidate your collateral (the stock bought on margin) before your total account value drops below zero - they give you some warning (a margin call) to deposit more funds, if you fall too low in balance, they'll automatically liquidate you. It seems like Coinbase was doing basically the same thing, allowing you to buy on their books but not take the securities off site. The SEC basically says that Coinbase can do that, but then they need to follow the regulations just like stock brokers. If they want to offer margin and not have to comply with regs, then they needed to deliver to their customers (which would allow customers to avoid liquidation / margin calls). So while Coinbase might be being a little disingenuous here, it's more about avoiding regulation than about "actually paying out".
Sorry, CFTC, not SEC. Here's the actual rule.[1] This refers to "delivery" when the futures contract is closed out, not while it is pending.
This follows the procedure for physical commodities, like grain. A key point there is that the organization storing the grain is totally separate from the trading process. What you're trading is a warehouse receipt for grain in a grain elevator somewhere. You can "take delivery" by getting the warehouse receipt and starting to pay storage charges. At that point your broker no longer has access to the asset. Eventually someone buys it who actually intends to use it, and they have it loaded onto a train or truck.
The key point here is separation between the broker, exchange, and storage facility. Cryptocurrencies use cryptographic wallets instead of warehouses, so "delivery" means delivery to the user's wallet.
[1] https://www.cftc.gov/PressRoom/PressReleases/8139-20
This follows the procedure for physical commodities, like grain. A key point there is that the organization storing the grain is totally separate from the trading process. What you're trading is a warehouse receipt for grain in a grain elevator somewhere. You can "take delivery" by getting the warehouse receipt and starting to pay storage charges. At that point your broker no longer has access to the asset. Eventually someone buys it who actually intends to use it, and they have it loaded onto a train or truck.
The key point here is separation between the broker, exchange, and storage facility. Cryptocurrencies use cryptographic wallets instead of warehouses, so "delivery" means delivery to the user's wallet.
[1] https://www.cftc.gov/PressRoom/PressReleases/8139-20
Interesting, thanks for the explanation. I didn’t know about that rule.
Markets don't actually move the tokens from one wallet to another, the network specific to the currency has to do that. Since Ripple is centralized, if the company goes out of business, the network does too. You will not be capable of trading it at all if that happens.
In the future they could turn into something like Rai stones, where it's impractical to move them but people still trade ownership anyway.
XRP exists independent of Ripple . The XRP in circulation cannot be destroyed by Ripple or any other entity.
Thats a good point, if demand remains the same.
But otherwise this document spells out everything that Ripple/XRP critics have been trying to drill into XRP Army conscripts for half a decade.
That Ripple is in the business of selling XRP and uses ambiguity between the context of “ripple” and deflection to say there are third parties using enough XRP to make it scarce in the future. When this was never happening, and to this day is not happening.
The complaint mentions a third party that paid to get XRP this year to use a Ripple Labs product. They bought the XRP from Ripple to the tune of $70mm and immediately sold it on the public markets.
I think the illusion is shattered with this complaint. But XRP should be able to retain its transfer usage, just back at 2013 price levels.
But otherwise this document spells out everything that Ripple/XRP critics have been trying to drill into XRP Army conscripts for half a decade.
That Ripple is in the business of selling XRP and uses ambiguity between the context of “ripple” and deflection to say there are third parties using enough XRP to make it scarce in the future. When this was never happening, and to this day is not happening.
The complaint mentions a third party that paid to get XRP this year to use a Ripple Labs product. They bought the XRP from Ripple to the tune of $70mm and immediately sold it on the public markets.
I think the illusion is shattered with this complaint. But XRP should be able to retain its transfer usage, just back at 2013 price levels.
That would be kind of cool in a sense, because it would do exactly the opposite of what the SEC would want. The SEC may then start to realize that they don't have the power to control the crypto market, and that it's going to blow up on them every time they try to attack. The higher price could also be used to fund better lawyers and lobbying against the SEC.
Not necessarily in support of Ripple specifically, but I do think having something that can actually challenge the SEC and reduce them to tears is a good thing. There are lots of things about the capital economy that could use change.
Not necessarily in support of Ripple specifically, but I do think having something that can actually challenge the SEC and reduce them to tears is a good thing. There are lots of things about the capital economy that could use change.
I don't think the SEC wants to control what users can do here, only prevent entities like Ripple from trying to conduct scams. So I think this action actually benefits everyone exactly as intended.
Ripple is everything you don't want in a cryptocurrency:
- centralized (as witnessed by the fact that the SEC has an actual target to go after)
- "pre-mined" (initial Ripple crowd gave themselves everything and once in a while toss a handful of XRP to the plebs)
- controlled by scammers
Except for your third point, those are true for most cryptocurrencies that are actively being traded, with a few exceptions.
It is certainly true for Ethereum, which pretty much invented or at least popularized the ICO concept, and that is the second most traded cryptocurrency in existence.
It is certainly true for Ethereum, which pretty much invented or at least popularized the ICO concept, and that is the second most traded cryptocurrency in existence.
ripple is not the same as XRP
ripple could disappear and XRP would still exist and and otherwise be functional
ripple could disappear and XRP would still exist and and otherwise be functional
> I'm very glad the ecosystem is doing what it's supposed to
It's still up 128% over the past year. I'd guess this will actually have a Streisand Effect and the added publicity will cause the price to rise in the semi-short term.
It's still up 128% over the past year. I'd guess this will actually have a Streisand Effect and the added publicity will cause the price to rise in the semi-short term.
Ethereum was also 60% pre-mined, somehow VCs behind it are able to protect it
but i agree Ripple is the worst
Saying "60% pre-mined" doesn't really make sense without more context since the supply changes over time and currently has no cap. There was 60 million eth pre-mined for the initial sale (and another 12 million for the devs). Which, all in, makes it approx 64% of today's supply.
they're only fine because they did it cleverly via a Swiss Foundation
if they did it via US company, they would be hit with similar lawsuit
I wonder how that translates to stablecoins. Tether seems sketchy, but USDC seems solid.
- USDC was regulated from the start and has been submissive to regulators. I don't foresee issues for them.
- Ripple blatantly flaunted regulation from the start.
- Tether is illegal for U.S. persons: "Any individual who is a U.S. Person and any entity that is a U.S. Person is prohibited from using the Site or any Services" (https://tether.to/legal/) They are unregulated. I've called Tether "Satan hell spawn" to people that ask me about it.
- Ripple blatantly flaunted regulation from the start.
- Tether is illegal for U.S. persons: "Any individual who is a U.S. Person and any entity that is a U.S. Person is prohibited from using the Site or any Services" (https://tether.to/legal/) They are unregulated. I've called Tether "Satan hell spawn" to people that ask me about it.
... but it didn't. The SEC did. XRP has a $40B "market cap", which sums up the crypto mentality in general.
Meh, I don't really get why people think "market cap" is the total valuation of something. If I sold Bob a billion XRP for 1 penny, then I sold Tim 1 XRP for $40, then told Bob not to sell, and Tim can sell his for $40 (because he wants to at least get that much back), then XRP's "market cap" is worth $40 Billion, but in reality it's probably worth $40.
I get that there is a lot more money in it than that, but let's be honest about something, if half the people sold Bitcoin tonight - they HAVE to get out today, it's "market cap" would likely go from nearly half-trillion to probably $300M overnight. Even though technically it should only cut in half right?
I get that there is a lot more money in it than that, but let's be honest about something, if half the people sold Bitcoin tonight - they HAVE to get out today, it's "market cap" would likely go from nearly half-trillion to probably $300M overnight. Even though technically it should only cut in half right?
Actually this thinking is incorrect, at least for company valuations. You're discussing shares being exchanged for arbitrary random values. In a regulated market prices will always be at the marginal level where buyers and sellers exchange at the equilibrium price.
Market cap is only meaningless if the participants in the market are trading at random prices, which they're not.
To validate this theory, just look at M&A. Companies get bought at close to or above their market capitalisation every day of the week.
Market cap is only meaningless if the participants in the market are trading at random prices, which they're not.
To validate this theory, just look at M&A. Companies get bought at close to or above their market capitalisation every day of the week.
Except we're not talking about companies, we're talking about currency. Companies have intrinsic value: they own assets, they produce something of value. Currency does not.
Look at the market cap of a company in bankruptcy. Assets are a tiny fraction of a going concern's market cap.
Facebook's main store of value is eyeballs, which can evaporate quickly.
Facebook's main store of value is eyeballs, which can evaporate quickly.
Are you trying to tell me crypto will not deliver internet 2.0
Nothing prevents you from selling a company for any price, and sometimes there's disagreement about company valuation.
People confuse acquisitions with selloffs. The reason an aquisition goes near share recent share price but a selloffs doesn't, is that an aquisition is new information that someone wants the stock, and a selloff is new information that almost no one does.
AJRD was just bought by LMT this week for a 25% premium, as one example.
This applies to every market cap? If every Apple stock holder would try to sell it today, the market cap would plummet.
It would but unless we're talking about complete economic collapse there's a bottom to it - Apple's real estate, intellectual property, inventory, brand, etc. all cost something. Even if we completely discount all future earnings (which assumes again Apple never earns a cent - doesn't look plausible unless there's total collapse of the industry). This means there would be people that would be willing to buy at that bottom price - of course, the opinions of people at which price is the bottom would differ, but it's unlikely - again, barring full collapse of the economical system - there won't be any.
With virtual coins, the bottom is literally zero. It is completely plausible that one day just nobody wants to buy $CRAPCOIN at any price. If for BTC there's probably always be some market (one has to pay the ransomware and buy drugs somehow ;) for novelty coins there's no reason to have any hard bottom, and thus no real downwards limit to "capitalization".
With virtual coins, the bottom is literally zero. It is completely plausible that one day just nobody wants to buy $CRAPCOIN at any price. If for BTC there's probably always be some market (one has to pay the ransomware and buy drugs somehow ;) for novelty coins there's no reason to have any hard bottom, and thus no real downwards limit to "capitalization".
If you can make more money from shitposting than from apple stock, it doesn't matter that it's technically not zero.
Unless you are making a complex hedge investment like options trading, that not interesting.
For long holder, the difference between 10x upside and 1000x upside is interesting, but the difference between 0.9x downside and 1.0x downside is not, because you haven't invested literal all your wealth in the asset.
For long holder, the difference between 10x upside and 1000x upside is interesting, but the difference between 0.9x downside and 1.0x downside is not, because you haven't invested literal all your wealth in the asset.
>If every Apple stock holder would try to sell it today, the market cap would plummet.
This is often repeated but not necessarily true. I don't own a particularly large amount of Apple stock, but if the price dropped even a little bit, and if I knew the drop was due to nothing more than this weird thing where everyone was selling for some reason, I might decide to own more. If aliens sent out a mind control signal that caused every Apple shareholder to start selling, the buyers (whoever they were, maybe the aliens? ;) ) would compete with each other to buy.
To give you a concrete example, let's say I am the only owner in the world of a flying car. One day, I decide to sell it. 100% of the owners of flying cars have decided to sell, but the price would clearly not drop to zero! The idea that everyone selling implies the price will drop to zero applies to pure Keynesian beauty contests where 100% of the value is in owning something perceived to be valuable. For currencies that is completely true, but for companies that is less true.
This is often repeated but not necessarily true. I don't own a particularly large amount of Apple stock, but if the price dropped even a little bit, and if I knew the drop was due to nothing more than this weird thing where everyone was selling for some reason, I might decide to own more. If aliens sent out a mind control signal that caused every Apple shareholder to start selling, the buyers (whoever they were, maybe the aliens? ;) ) would compete with each other to buy.
To give you a concrete example, let's say I am the only owner in the world of a flying car. One day, I decide to sell it. 100% of the owners of flying cars have decided to sell, but the price would clearly not drop to zero! The idea that everyone selling implies the price will drop to zero applies to pure Keynesian beauty contests where 100% of the value is in owning something perceived to be valuable. For currencies that is completely true, but for companies that is less true.
> This is often repeated but not necessarily true.
This is always true. It doesn't have to go to zero to qualify as plummeting.
This is always true. It doesn't have to go to zero to qualify as plummeting.
I would suggest that my flying car example is one where it's not true. Another example would be intermediate industrial products: everyone who has intermediate chemicals is trying to sell them! Everyone who buys them uses them up as fast as they can, which means that at any given moment, virtually every owner of the intermediate industrial chemical is trying to sell it.
The price of stocks decrease if everyone sells them.
Your examples are incompatible.
Your examples are incompatible.
Well if everyone is selling then nobody is buying and the quoted stock price remains unchanged.
See how ridiculous it is to nitpick purely hypothetical situations?
See how ridiculous it is to nitpick purely hypothetical situations?
It's not hypothetical because it happens. Stocks don't operate in low-entropy hypothetical planes of existence, they trade on markets. If your ask has no bids you lower your ask. Sellers will keep lowering it and if there's no bids it will get very near zero in which case the exchange will likely de-list the stock. A hypothetical where you sell one flying car doesn't illustrate a comparable dynamic.
That argument could be applied to anything
What you're really looking for is the fact that Apple shares have an intrinsic value related to the company's assets and future cash flows. Bitcoin, on the other hand, has an intrinsic value of zero, so it could theoretically plummet all the way to zero. Same goes for some companies' stocks
What you're really looking for is the fact that Apple shares have an intrinsic value related to the company's assets and future cash flows. Bitcoin, on the other hand, has an intrinsic value of zero, so it could theoretically plummet all the way to zero. Same goes for some companies' stocks
>That argument could be applied to anything
Yeah, it could be applied to anything. Its conclusion is true for everything. Prices will not actually go to zero when everyone sells, unless there is no intrinsic value.
Yeah, it could be applied to anything. Its conclusion is true for everything. Prices will not actually go to zero when everyone sells, unless there is no intrinsic value.
Apple presumably isn't misleading investors, so its market cap is accurate. Valuations are really just numbers based on supply and demand, so if everyone wanted to sell Apple it would be worth nothing.
What crypto enthusiasts miss is that owning a share of Apple grants you a right to a portion of their current cash + future profits (net of debt). A Bitcoin grants you nothing but that Bitcoin - that’s what people mean when they say stocks have “intrinsic value”. Apple will never go to zero because they have a boatload of cash and the ability to make more. If there are fewer shareholders, existing ones just get a larger portion of the profits but the market cap will never drop below the current cash - debt.
There's no such thing as market cap for a currency (after all, market caps are measured as a function of currency), but nobody knows what on earth a crypto unit is supposed to be, do or mean, so it gets weird little slices of each finance category.
According to the SEC, XRP isn't a currency, so it does have a market cap.
I understand within the community that opinions vary.
Your example is collusion/price fixing, and is very illegal. I think no matter what is being traded in most jurisdictions.
https://en.wikipedia.org/wiki/Price_fixing
If you remove the collusion, then market cap appears to me to be a fair valuation.
If there is a shock to the system and everyone wants to immediately sell (despite previously wanting to hold), I would argue that to be a sudden change in the valuation.
https://en.wikipedia.org/wiki/Price_fixing
If you remove the collusion, then market cap appears to me to be a fair valuation.
If there is a shock to the system and everyone wants to immediately sell (despite previously wanting to hold), I would argue that to be a sudden change in the valuation.
How can someone track cash inflows to crypto currencies?
You summarized this very well!
A lot of post-Bitcoin "cryptocurrencies" are nothing but a cargo cult: https://www.youtube.com/watch?v=qmlYe2KS0-Y
A lot of post-Bitcoin "cryptocurrencies" are nothing but a cargo cult: https://www.youtube.com/watch?v=qmlYe2KS0-Y
Is there an example of a cryptocurrency company that isn't centralized?
You need to use centralized exchanges in order to buy in or cash out. Even small entities trading on platforms like LocalBitcoins need to adhere to KYC laws.
If you were to use cryptocurrency as actual money, I can't see it being cost effective, legal or convenient to only trade with fly-by-night currency exchangers in South America in order to buy and sell cryptocurrency "anonymously".
You need to use centralized exchanges in order to buy in or cash out. Even small entities trading on platforms like LocalBitcoins need to adhere to KYC laws.
If you were to use cryptocurrency as actual money, I can't see it being cost effective, legal or convenient to only trade with fly-by-night currency exchangers in South America in order to buy and sell cryptocurrency "anonymously".
Bitcoin has centralized exchanges, but no centralized organization or exchange.
What about mining pools? Top 3 pools now have more than 50% of hashing power (meaning total control of the network), and corporate agreements between 3 entities are not exactly rare.
Bitcoin isn't a company, though.
Well, the development of Bitcoin Core is highly susceptible to corporate influence as seen by what Blockstream did in the past (which is less now and more diverse), but still, it can happen again in the future should there be any contentious issues in the community.
Why is it that Lightning Network seems to be the only L2 solution with Bitcoin? Because it’s a Blockstream product.
Why is it that Lightning Network seems to be the only L2 solution with Bitcoin? Because it’s a Blockstream product.
Lightning isn’t a blockstream product - their L2 product was Liquid and it lost to Lightning
Whoops, you’re right.
It’s still odd that Blockstream had significant number of developers working on the core protocol.
It’s still odd that Blockstream had significant number of developers working on the core protocol.
It was founded by core developers.
I once bought BTC from an ATM. Paid cash. Absolutely no KYC.
Those have cameras and if you look into darknet busts, a lot of people were de-anonymized through Bitcoin ATMs.
How come people don't do the minimum precautions? I mean just wear a hoodie, a cap and sunglasses. And IR LEDs for bonus points.
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The US Securities and Exchange Commission is the crypto "ecosystem"?
If I understand the GP's point correctly, the SEC would be helping to keep the weak and ill-informed around.
I think GP considers SEC part of the ecosystem (at least as a regulator, or at least as an exogenous market force) that helps keep cull the weaklings.
"Weak"? What a strange adjective to use for such a situation.
All of the bullets in your comment explain why Ripple is bad, and you’ve somehow twisted that logic into justifying that it’s good with your last sentence. It’s elitist at best, outright evil at worst. I’m not really sure what goal it serves.
If your point is that we should just “take all the warning labels off of everything and let the situation resolve itself,” no thanks. I don’t have the time to research the exact origin of everything I put in my mouth. I have to trust that when I buy food, someone out there has at least made an attempt to minimize the chances that it contains loads of mercury.
Are you running extensive tests on everything you eat and drink? The air you breathe? Sure, companies might not want to ruin their reputation by selling such goods, but, then again, we have Ripple. So which is it?
Or maybe I just need to be more selective about which companies I choose, right? Despite seeing exit scam after exit scam, incompetent blunder after blunder, that will surely protect me better than the SEC et al doing their damn jobs.
No. I want oversight. Sure, that doesn’t mean I can let my guard down; I still have to be selective. But at least there’s a pretty low chance that the brand-name toothpaste I use tonight—or the <insert snake oil here> I use instead—is slowly killing me.
If your point is that we should just “take all the warning labels off of everything and let the situation resolve itself,” no thanks. I don’t have the time to research the exact origin of everything I put in my mouth. I have to trust that when I buy food, someone out there has at least made an attempt to minimize the chances that it contains loads of mercury.
Are you running extensive tests on everything you eat and drink? The air you breathe? Sure, companies might not want to ruin their reputation by selling such goods, but, then again, we have Ripple. So which is it?
Or maybe I just need to be more selective about which companies I choose, right? Despite seeing exit scam after exit scam, incompetent blunder after blunder, that will surely protect me better than the SEC et al doing their damn jobs.
No. I want oversight. Sure, that doesn’t mean I can let my guard down; I still have to be selective. But at least there’s a pretty low chance that the brand-name toothpaste I use tonight—or the <insert snake oil here> I use instead—is slowly killing me.
OP might be falling into a wishful thinking fallacy, and assumes that with time there will be "progress", and somehow - even if it takes many false starts, and we have to go through fire and flames - but we'll end up with a better/great/fair world with a stronger/better/fair cryptocurrency ecosystem.
Also it seems OP considers SEC part of the ecosystem that helps weeding out the scammers.
Also it seems OP considers SEC part of the ecosystem that helps weeding out the scammers.
I think you are misunderstanding their point: The SEC did do their jobs and they shut down this investment scam, which they would not have been able to do in the case of Bitcoin because it's not controlled by a single American business like Ripple.
It for sure wasn't irony. We're basically all pretty evil dudes.
I've just read the Wikipedia page on Ripple. Can somebody explain in clear terms what the point of XRP is supposed to be?
Is it supposed to be a faster Bitcoin? Is it supposed to be a less Chinese-controlled (supposedly) cryptocurrency than Bitcoin?
Let's for the sake of discussion give them the benefit of the doubt.
Is it supposed to be a faster Bitcoin? Is it supposed to be a less Chinese-controlled (supposedly) cryptocurrency than Bitcoin?
Let's for the sake of discussion give them the benefit of the doubt.
The narrative was that Ripple was going to become the protocol used by banks to transfer money around, especially across borders.
The pitch was that Ripple, the company, was going to sell XRP, the cryptocurrency, to the general public in order to fund all of their growth. Then, when banks ostensibly adopted XRP for their banking needs, the banks would be forced to pay exorbitant amounts of money to buy the artificially-scarce XRP from all of the speculators who got in early.
Everyone conveniently ignored the fact that large banks are not dumb, and they had no real reason to use a currency literally invented out of thin air to power their transactions. If banks really wanted to use cryptocurrency to trade among themselves, they'd obviously just roll their own cryptocurrency. Or they'd just copy-paste the permissively licensed Ripple code and call it something like BankCoin. No one could ever give me a good reason why banks would have no choice but to buy up arbitrary XRP from general public speculators.
The pitch was that Ripple, the company, was going to sell XRP, the cryptocurrency, to the general public in order to fund all of their growth. Then, when banks ostensibly adopted XRP for their banking needs, the banks would be forced to pay exorbitant amounts of money to buy the artificially-scarce XRP from all of the speculators who got in early.
Everyone conveniently ignored the fact that large banks are not dumb, and they had no real reason to use a currency literally invented out of thin air to power their transactions. If banks really wanted to use cryptocurrency to trade among themselves, they'd obviously just roll their own cryptocurrency. Or they'd just copy-paste the permissively licensed Ripple code and call it something like BankCoin. No one could ever give me a good reason why banks would have no choice but to buy up arbitrary XRP from general public speculators.
One possible reason was blackmail. if XRP/Ripple got a few of the key members in the CEO group entrapped, they could easily force the banks to buy XRP. It didn't go too well.
My understanding: Ripple is a company that aims to build a faster bank transfer protocol (faster than SWIFT, for example).
To achieve that speed, banks transfer a digital currency (XRP) issued by Ripple instead of traditional currencies. It takes a few seconds for XRP transactions to settle, instead of days for traditional currencies via SWIFT.
The value of this currency is decentralized, in the sense that people trade it with other currencies (which is also how Bitcoin, Ethereum etc. are valued).
In the eyes of the SEC, the fact that XRP is directly issued by Ripple makes it similar to issuing shares. Even if Ripple doesn't control the value of the shares (XRP), they still manage the supply.
To achieve that speed, banks transfer a digital currency (XRP) issued by Ripple instead of traditional currencies. It takes a few seconds for XRP transactions to settle, instead of days for traditional currencies via SWIFT.
The value of this currency is decentralized, in the sense that people trade it with other currencies (which is also how Bitcoin, Ethereum etc. are valued).
In the eyes of the SEC, the fact that XRP is directly issued by Ripple makes it similar to issuing shares. Even if Ripple doesn't control the value of the shares (XRP), they still manage the supply.
SWIFT used to take a days. Since Ripple was started, SWIFT have already created their new SWIFT gpi platform (which they say settles most cross-border payments in in minutes), signed up 4000+ members and apparently are now is doing over $300bn in transfers a day. Most developed countries already have free, real-time domestic transfers (UK Faster Payments, Australia's New Payments Platform, etc.), and it looks like SWIFT have just announced a next step of further integrating with these to speed up cross-border payments to seconds [0].
For small payments though, I've just used something like TransferWise which is great and really fast too.
The biggest problem with Ripple was that there was never actually any compelling need for the XRP token, because you'd need an extra currency conversion for a cross border payment... So I believe mostly the only way that they'd got partners to test out their system was to actually pay them from money they'd got selling XRP tokens to speculators.
1. https://www.swift.com/our-solutions/swift-gpi/instant-cross-...
For small payments though, I've just used something like TransferWise which is great and really fast too.
The biggest problem with Ripple was that there was never actually any compelling need for the XRP token, because you'd need an extra currency conversion for a cross border payment... So I believe mostly the only way that they'd got partners to test out their system was to actually pay them from money they'd got selling XRP tokens to speculators.
1. https://www.swift.com/our-solutions/swift-gpi/instant-cross-...
In fiat transfer systems transactions aren't fast, they are submitted fast and are assumed to be complete enough for you to walk out, but they take usually about a month to properly complete. And TransferWise uses bank transfers as backend.
Where geographically are you basing that on? In another reply 6nf mentions Osko etc. on the New Payments Platform in Australia, which is fully settled in real-time, 24/7, but even before we had that our Bulk Electronic Clearing System (BECS) cleared and settled everything twice daily on business days and Real-Time Gross Settlement (RTGS) has existed for years for high-value domestic payments.
Cross-border payments have usually taken longer, but the point of my comment is that that is very quickly changing (and already has come a long way in just the last few years). So you may be thinking of older technology or places with less advanced banking systems than what a lot of countries have now?
Cross-border payments have usually taken longer, but the point of my comment is that that is very quickly changing (and already has come a long way in just the last few years). So you may be thinking of older technology or places with less advanced banking systems than what a lot of countries have now?
I'm talking about Visa. You walk out right away, and transaction completes in background after a month.
That's rapidly changing. We have instant confirmed P2P bank transfers now in Australia via Osko and other services.
You probably talk about UX than underlying technology. https://nppa.com.au/fraud-and-security/ they say they have fraud control similar to that of banks.
>If you suspect you have been tricked into paying someone you should contact your financial institution immediately and report it to the police.
If you pay erroneously, what happens next?
>If you suspect you have been tricked into paying someone you should contact your financial institution immediately and report it to the police.
If you pay erroneously, what happens next?
If you overpay, you'll need to contact your friend or whoever and ask them to send it back.
If someone tricks you into sending them money, that's just fraud same as credit card fraud or wire transfer fraud or crypto scamming fraud. What are you getting at?
This is exactly as safe as the previous system which took up to 48 hours to transfer the money.
If someone tricks you into sending them money, that's just fraud same as credit card fraud or wire transfer fraud or crypto scamming fraud. What are you getting at?
This is exactly as safe as the previous system which took up to 48 hours to transfer the money.
> It takes a few seconds for XRP transactions to settle, instead of days for traditional currencies via SWIFT
Just want to note that interbank transfers via Fedwire are (a) close to free and (b) instantaneous.
Just want to note that interbank transfers via Fedwire are (a) close to free and (b) instantaneous.
Fedwire is instantaneous for US domestic transfers, whereas international Fedwire transfers to non-Fedwire banks still rely on SWIFT as far as I know. The Ripple company offers solutions to replace SWIFT using XRP as the exchange currency.
> international Fedwire transfers to non-Fedwire banks still rely on SWIFT as far as I know
International wires are a bit of a mess. But there are alternatives to SWIFT.
Also, SWIFT is just a messaging protocol. The actual settlement is handled separately. This was Ripple’s original pitch, but it changed along the way.
International wires are a bit of a mess. But there are alternatives to SWIFT.
Also, SWIFT is just a messaging protocol. The actual settlement is handled separately. This was Ripple’s original pitch, but it changed along the way.
Is there a precise overview/description somewhere about how international wire transfer actually works?
If I want to send someone a few USD and I know their IBAN or SWIFT + name, address, what does my bank do? Is there a Visa/MC for wire transfer? (I know that SWIFT operates a network for banks, but then how do banks settle? Is the SWIFT message a legal claim?)
If I want to send someone a few USD and I know their IBAN or SWIFT + name, address, what does my bank do? Is there a Visa/MC for wire transfer? (I know that SWIFT operates a network for banks, but then how do banks settle? Is the SWIFT message a legal claim?)
Assuming you mean sending some USD from the US to an overseas recipient, it goes a bit like this:
1. Your bank sends a secure message to the overseas bank through the SWIFT network (this is where the SWIFT number is used for routing the message) to the recipient's bank, detailing the transaction.
2. Through the SWIFT standard message format, the overseas bank validates whether the account exists in their bank. Some additional screening is done at this stage to detect fraud, money laundering, etc.
3. Your bank and the overseas bank have a predefined agreement on a correspondent account, i.e. a bank account in the US owned by the overseas bank to receive USD. If everything checks out, your bank wires the money via a domestic system like Fedwire to settle the transaction.
4. The overseas bank confirms that the money was wired to their US account, and then adjusts the recipient's balance accordingly.
1. Your bank sends a secure message to the overseas bank through the SWIFT network (this is where the SWIFT number is used for routing the message) to the recipient's bank, detailing the transaction.
2. Through the SWIFT standard message format, the overseas bank validates whether the account exists in their bank. Some additional screening is done at this stage to detect fraud, money laundering, etc.
3. Your bank and the overseas bank have a predefined agreement on a correspondent account, i.e. a bank account in the US owned by the overseas bank to receive USD. If everything checks out, your bank wires the money via a domestic system like Fedwire to settle the transaction.
4. The overseas bank confirms that the money was wired to their US account, and then adjusts the recipient's balance accordingly.
Thanks!
Is there a routing system between SWIFT members based on who has settlement (nostro/vostro) accounts between each other?
Is there a routing system between SWIFT members based on who has settlement (nostro/vostro) accounts between each other?
Does this mean that banks participating in international transfer need to have bank accounts located in each of the countries they participate in exchanges with?
> Does this mean that banks participating in international transfer need to have bank accounts located in each of the countries they participate in exchanges with?
Or have accounts with banks that have accounts overseas, yes. For example, Fidelity piggybacks on JPMorgan for a lot of its overseas transfers.
Or have accounts with banks that have accounts overseas, yes. For example, Fidelity piggybacks on JPMorgan for a lot of its overseas transfers.
This sounds exactly like Facebook / Mark Zuckerberg's Libra cryptocurrency.
The currencies (Diem and XRP) would be similar in nature, since they're not mined but centrally issued, and their value is determined by a combination of factors (the issuance, decay, and trading).
As far as I know Libra/Diem is more customer-facing, whereas Ripple is mostly marketed to banks for faster international transfers.
As far as I know Libra/Diem is more customer-facing, whereas Ripple is mostly marketed to banks for faster international transfers.
And Diem is/will be a stablecoin backed by USD (I think?)
Which has now been rebranded to Diem.
Other comments are incorrect.
As I recall Ripple was originally a network-of-issuers for multiple issuer-specific tokens model, it wasn't supposed to be a single-issuer/single-token. The XRP token itself was never intended to be the asset, it was only a cost-token that fuelled the exchange of other issuers' tokens, similar to offline community exchange systems (CES). Ripple the company post-dates Ripple the project, which AFAIK was originally solidly non-commercial in motivation. I was part of the early commercialization of Ripple sort of by proxy while building Kraken, although I was opposed to the move. Aside from the money people, there were some good engineers involved with the right intentions, drawing from solid experience and with an awareness of CES and attempts at networking thereof.
The whole central banking thing was a post-facto marketing push as crypto went mainstream AFAIK. I believe some of the people changed at some point, but I didn't have time to focus on Ripple and never met them. I believe the Ripple narrative mirrors my overall experience with crypto: nice technical ideas by people with positive social visions, suddenly people get paid to do it, utopian visions rapidly replaced with money people, regulatory ingress effectively destroys the USP, whole thing turns in to a scam, regulations become warped in to a system of protectionism and government effectively in cahoots with the dominant players. A real education in human behavior.
As I recall Ripple was originally a network-of-issuers for multiple issuer-specific tokens model, it wasn't supposed to be a single-issuer/single-token. The XRP token itself was never intended to be the asset, it was only a cost-token that fuelled the exchange of other issuers' tokens, similar to offline community exchange systems (CES). Ripple the company post-dates Ripple the project, which AFAIK was originally solidly non-commercial in motivation. I was part of the early commercialization of Ripple sort of by proxy while building Kraken, although I was opposed to the move. Aside from the money people, there were some good engineers involved with the right intentions, drawing from solid experience and with an awareness of CES and attempts at networking thereof.
The whole central banking thing was a post-facto marketing push as crypto went mainstream AFAIK. I believe some of the people changed at some point, but I didn't have time to focus on Ripple and never met them. I believe the Ripple narrative mirrors my overall experience with crypto: nice technical ideas by people with positive social visions, suddenly people get paid to do it, utopian visions rapidly replaced with money people, regulatory ingress effectively destroys the USP, whole thing turns in to a scam, regulations become warped in to a system of protectionism and government effectively in cahoots with the dominant players. A real education in human behavior.
The SEC is clearly suing Ripple the company here. We’re all talking about this part of your comment, which doesn’t really disagree with the other comments:
> whole thing turns in to a scam
Ironically, the narrative that Ripple the project was unrelated to Ripple, the scammy company, was also frequently used to hype XRP in the early days.
It was a convenient way to give two narratives to the same cryptocurrency. People could either choose to believe in the Ripple (the company) banking system, or they could choose to believe in Ripple (the project, the technology). Win-win for speculators.
> whole thing turns in to a scam
Ironically, the narrative that Ripple the project was unrelated to Ripple, the scammy company, was also frequently used to hype XRP in the early days.
It was a convenient way to give two narratives to the same cryptocurrency. People could either choose to believe in the Ripple (the company) banking system, or they could choose to believe in Ripple (the project, the technology). Win-win for speculators.
Just read this other thread it corrects the misinformation here
https://news.ycombinator.com/item?id=25502764
Other thread seems to agree that the modern version of Ripple, the version being sued by the SEC and the version of XRP that cryptocurrency speculators have been trading, is problematic.
No one is really disagreeing that Ripple was something else entirely before it became the popular Ripple/XRP scam, but that doesn't really matter in the context of this SEC lawsuit.
No one is really disagreeing that Ripple was something else entirely before it became the popular Ripple/XRP scam, but that doesn't really matter in the context of this SEC lawsuit.
This is true. Especially if you look at what Jed Mcaleb helped to cocreate with Stellar, you can see the original idea of Ripple expressed clearly in what has been done with XLM.
Ripple is centralized. It's basically another PayPal.
OK, but I'm asking why they need a cryptocurrency. Paypal certainly doesn't need one.
Because you can't collect dumb money from dumb people with the pitch of "I'm starting a competitor to PayPal, invest in me."
But you can if you hint that if they buy your crypto tokens, those tokens will go to the moon.
But you can if you hint that if they buy your crypto tokens, those tokens will go to the moon.
FYI: I collect a best of crypto quotes over at open blockchains, see https://github.com/openblockchains/crypto-quotes
To quote Nouriel Roubini, Economist:
No use ever, past, present and future for XRP and Ripple products... it is already flopping after spending a fortune and printing a huge amount of totally useless XRP. (Now the XRP army of Twitter trolls, bots, hired guns and zealots will attack again...)
To quote Nouriel Roubini, Economist:
No use ever, past, present and future for XRP and Ripple products... it is already flopping after spending a fortune and printing a huge amount of totally useless XRP. (Now the XRP army of Twitter trolls, bots, hired guns and zealots will attack again...)
OK, but you can find such quotes for everything. "We estimate the global demand to be about 3 computers" "nobody will need more than 16KB of memory" and so on.
(I'm not a fan of XRP, anyways)
(I'm not a fan of XRP, anyways)
afaik, Nouriel Roubini is a permabear. If your mental ML model predicts downfall all the time, you'd be right some time. Roubini has been bearish on stocks and BTC for a while now, which implies bullishness on USD, something I fail to understand given the rampant printing.
a broken clock is right twice a day, in his case he is right about once a decade.
As much as a permabear he is, you can notice he's starting to change his tone on BTC overall as of late.
Must have missed it. Can you share a link?
It's been a scam coin since the beginning. Should be shut down and stopped..
Interestingly enough, back in the day when ripple was first starting it was heavily promoted by the wall street crowd as being superior to bitcoin because it was "regulated". The logic was that ripple could better be incorporated into the traditional financial system because it would be easier to allow for know your customer and anti-money laundering compliance.
As someone who is a huge supporter of decentralized/unregulated crypto like BTC, I am just laughing my butt off watching the SEC rip ripple to pieces like this. Hope it shuts down.
As someone who is a huge supporter of decentralized/unregulated crypto like BTC, I am just laughing my butt off watching the SEC rip ripple to pieces like this. Hope it shuts down.
I worked in banking innovation back in 2017 and yep, that was very much the sentiment. The bank I worked for was willing to work with Ripple.
It gained credit when google ventures invested in it back when it was open coin. I laughed at the thought of a competitor to bitcoin. Like what’s the point. But when Btc had its issues, I knew then I was wrong.
XRP is way better than bitcoin when it comes to usability. BTC fees very high and it's very slow.
No surprise, Stellar was a pre-mined shix-coin, you have no idea how hard it was for me (Bitcoiner) at IBM listening to those imbeciles go on and on about the 'panacea' they were going to build with solidity (the worst most convoluted language I've ever encountered), hyperledger patchwork solutions and operating on ripple and stellar [0].
Those guys seriously had no idea what they were talking about 95% of the time, and despite being being one of the few that had both a Consultant with (at the time 8 years in Crytocurrency) and Developer roles prior to having my own fintech startup in Bitcoin for 4 years before that I was always the 'debbie downer' when I tried to explain the limitations of this technology and brought people back to Earth. Especially at the time as we were dealing with the war leading up to Segwit and Bcash hardfork and barely starting to make inroads with Lightning Network proofs of concept in the Bitcoin community. I'm glad I left when I did, but IBM had everything going for it in that space and despite that they still managed to cock things up because they're too blinded by their old contracting business model instead of actual innovation. They lost their vision a long time ago, and subsisting on Government and Military contracts is what probably made them this complacent.
In short, now after ~10 years in Crypto you'd be an idiot to deal with xrp and I don't feel bad for anyone that gets burned; I'd prefer it died without with no State intervention, but as some of you may know we've dealt with a lot of that in Bitcoin and only came out stronger while this may kill this project entirely. Just keep that in mind when you see why Bitcoin keeps defying every possible analyzer's projections and why even its main detractors (JP Morgan et al) have had to eat their weight in crow and are trying to get in after having ruined the banking Industry yet again with their largess and corrupt business model.
0: https://thexrpdaily.com/2019/01/27/stellar-partner-ibm-confi...
Those guys seriously had no idea what they were talking about 95% of the time, and despite being being one of the few that had both a Consultant with (at the time 8 years in Crytocurrency) and Developer roles prior to having my own fintech startup in Bitcoin for 4 years before that I was always the 'debbie downer' when I tried to explain the limitations of this technology and brought people back to Earth. Especially at the time as we were dealing with the war leading up to Segwit and Bcash hardfork and barely starting to make inroads with Lightning Network proofs of concept in the Bitcoin community. I'm glad I left when I did, but IBM had everything going for it in that space and despite that they still managed to cock things up because they're too blinded by their old contracting business model instead of actual innovation. They lost their vision a long time ago, and subsisting on Government and Military contracts is what probably made them this complacent.
In short, now after ~10 years in Crypto you'd be an idiot to deal with xrp and I don't feel bad for anyone that gets burned; I'd prefer it died without with no State intervention, but as some of you may know we've dealt with a lot of that in Bitcoin and only came out stronger while this may kill this project entirely. Just keep that in mind when you see why Bitcoin keeps defying every possible analyzer's projections and why even its main detractors (JP Morgan et al) have had to eat their weight in crow and are trying to get in after having ruined the banking Industry yet again with their largess and corrupt business model.
0: https://thexrpdaily.com/2019/01/27/stellar-partner-ibm-confi...
I’m anti-xrp but the smugness in your post is insufferable. Segwit has failed to reach even 50% adoption after all these years, future protocol upgrades are a decade away, and the lightning network is a centralized mess. Small blockers hijacked the network via block stream and ruined bitcoins scalability at the behest of their $400 mil investors. /r/Bitcoin is one of the most censored subreddits, ironic for a centralized platform. All you have now after years of stagnation is digital scarcity. Meanwhile ETH has shipped phase 0 of 2.0, is already 50% faster on 1.0, and is not slowing down any time soon. Your smug “we can/have done nothing wrong” attitude literally caused the BCH/BSV forks and have done nothing but hold crypto back.
>/r/Bitcoin is one of the most censored subreddits
This is the core attitude of every Bcasher -- they want complicated technical arguments requiring decades of distributed systems experience to be hashed out by clueless people on Reddit. It makes absolutely no sense unless the absolute point of it all was to sabotage Bitcoin's actual merit: decentralization and immutability.
Gavin started pulling this shit after developing a relationship with the CIA. One wonders Bitcoin XT, Bitcoin Unlimited, Bitcoin Cash, one attempt after another to ruin the decentralized nature of the Bitcoin protocol. Thankfully nobody bought what these guys were selling.
This is the core attitude of every Bcasher -- they want complicated technical arguments requiring decades of distributed systems experience to be hashed out by clueless people on Reddit. It makes absolutely no sense unless the absolute point of it all was to sabotage Bitcoin's actual merit: decentralization and immutability.
Gavin started pulling this shit after developing a relationship with the CIA. One wonders Bitcoin XT, Bitcoin Unlimited, Bitcoin Cash, one attempt after another to ruin the decentralized nature of the Bitcoin protocol. Thankfully nobody bought what these guys were selling.
This is the core attitude of every Bitcoin maximalist, they’re so wrapped up in their own ethos that all criticism must come from the others in the Bitcoin camp (bch, Btsv, btwhatever).
They literally can’t imagine a world where actual crypto diehards sold their BTC in disgust years ago for huge profit to move into better, more decentralized projects with functional communities.
They literally can’t imagine a world where actual crypto diehards sold their BTC in disgust years ago for huge profit to move into better, more decentralized projects with functional communities.
> Segwit has failed to reach even 50% adoption
By what metrics? The node count has increased since then and the hashrate keeps increasing to record highs, you have no way to prove what you just said and it borderlines absurd hyperbole/total BS. Block size wasn't the issue to solve the issues Bitcoin was having, if it were BCash would not be an entire waste of time/resources as no one uses it and it has no volume to speak of. And this is all after Ver/Jihan (speculation) were spamming the network to clog the mempool with low fee txs, and it still didn't work as that made Bitcoin hit its first 20k ATH mark.
> Small blockers hijacked the network via block stream and ruined bitcoins scalability at the behest of their $400 mil investors.
'Small blockers' also known as the Core Developers understood that Jihan and Ver were corrupt imbeciles with nothing but greed driving their motives, and it was clear Roger had no idea about the tech in question and his arguments fell apart under basic scrutiny. Bcash is living proof of that reality and has no tx volume and a only a percentage of of BTC's value despite taking Jihan's majority hash rate with them. And both STILL mine Bitcoin anyway...
> /r/Bitcoin is one of the most censored subreddits, ironic for a centralized platform.
I'm not disputing that, I've had several posts of mine censored since I joined in 2012, its hardly where I would say anything but meme shix-postin takes place with the occasional useful post, like the one from Andy who is pilot testing his LN Tesla charging system. Theymos and his Mods are not who I would trust to be the arbiter of 'free speech' that much is correct. Only uninformed tourists go there to get their information about BTC.
> Your smug “we can/have done nothing wrong” attitude literally caused the BCH/BSV forks...
Not true as I may be an early adopter I had only reluctantly put myself in the spotlight due to my startup when it was necessary and turned down many more offers to speak after I exited my startup so I hardly have 'influence,' but lets say I did: and if it did I'm glad it did, because Bcash Ver/Jihan were cancer and we were stagnating with people like Gavin, the Foundation, Hearn etc... They're all dead weight and I'm glad we excised them before they all brought us down with them. I'm not satisfied where we are in terms of progress after so many lost years, but I'm glad to see Bitcoin has made as much progress as it has.
I'd say that we proved what we sought out to do, and still have more work to do. Mistakes were definitely made, we still do not have privacy features on by default like mixing to enhance security on the mainchain. Something that I thought we should have been focused on and implemented long ago. LN is coming along nicely, too, but still needs way more work to accommodate the influx txs to operate at the level we all feel it should, but again, progress takes time.
I'm not even going to touch the ETH non-sense you spouted off about. The fact that Cryptikitties is the most notable thing to have ever come from ETH proves why smart contracts was always Vitalk's vaporware de-jour and I cannot comprehend what it sought or will ever do after so many years meandering in obscurity and countless hacks.
But Solidity is total garbage and having it forced on me was what made it so easy for me to leave tech as things had gone incredibly wrong if corps thought that made any sense. IBM had so much anti-Bitcoin propaganda in its course material, and was so often repeated despite most there (including the higher up execs and CEO) not knowing more than buzzwords.
When being empirically proven correct to detractors is seen as 'smug' that is one of the points of validation and metrics I use when we proved the impossible. I've seen it enough times in various Industries to know that, so interpret all of this as you will.
By what metrics? The node count has increased since then and the hashrate keeps increasing to record highs, you have no way to prove what you just said and it borderlines absurd hyperbole/total BS. Block size wasn't the issue to solve the issues Bitcoin was having, if it were BCash would not be an entire waste of time/resources as no one uses it and it has no volume to speak of. And this is all after Ver/Jihan (speculation) were spamming the network to clog the mempool with low fee txs, and it still didn't work as that made Bitcoin hit its first 20k ATH mark.
> Small blockers hijacked the network via block stream and ruined bitcoins scalability at the behest of their $400 mil investors.
'Small blockers' also known as the Core Developers understood that Jihan and Ver were corrupt imbeciles with nothing but greed driving their motives, and it was clear Roger had no idea about the tech in question and his arguments fell apart under basic scrutiny. Bcash is living proof of that reality and has no tx volume and a only a percentage of of BTC's value despite taking Jihan's majority hash rate with them. And both STILL mine Bitcoin anyway...
> /r/Bitcoin is one of the most censored subreddits, ironic for a centralized platform.
I'm not disputing that, I've had several posts of mine censored since I joined in 2012, its hardly where I would say anything but meme shix-postin takes place with the occasional useful post, like the one from Andy who is pilot testing his LN Tesla charging system. Theymos and his Mods are not who I would trust to be the arbiter of 'free speech' that much is correct. Only uninformed tourists go there to get their information about BTC.
> Your smug “we can/have done nothing wrong” attitude literally caused the BCH/BSV forks...
Not true as I may be an early adopter I had only reluctantly put myself in the spotlight due to my startup when it was necessary and turned down many more offers to speak after I exited my startup so I hardly have 'influence,' but lets say I did: and if it did I'm glad it did, because Bcash Ver/Jihan were cancer and we were stagnating with people like Gavin, the Foundation, Hearn etc... They're all dead weight and I'm glad we excised them before they all brought us down with them. I'm not satisfied where we are in terms of progress after so many lost years, but I'm glad to see Bitcoin has made as much progress as it has.
I'd say that we proved what we sought out to do, and still have more work to do. Mistakes were definitely made, we still do not have privacy features on by default like mixing to enhance security on the mainchain. Something that I thought we should have been focused on and implemented long ago. LN is coming along nicely, too, but still needs way more work to accommodate the influx txs to operate at the level we all feel it should, but again, progress takes time.
I'm not even going to touch the ETH non-sense you spouted off about. The fact that Cryptikitties is the most notable thing to have ever come from ETH proves why smart contracts was always Vitalk's vaporware de-jour and I cannot comprehend what it sought or will ever do after so many years meandering in obscurity and countless hacks.
But Solidity is total garbage and having it forced on me was what made it so easy for me to leave tech as things had gone incredibly wrong if corps thought that made any sense. IBM had so much anti-Bitcoin propaganda in its course material, and was so often repeated despite most there (including the higher up execs and CEO) not knowing more than buzzwords.
When being empirically proven correct to detractors is seen as 'smug' that is one of the points of validation and metrics I use when we proved the impossible. I've seen it enough times in various Industries to know that, so interpret all of this as you will.
> Bitcoin keeps defying every possible analyzer's projections
It does not. Several people claimed Bitcoin would be in the $100K-$1,000K range by now.
It does not. Several people claimed Bitcoin would be in the $100K-$1,000K range by now.
They’ve moved onto talking about Stock-to-Flow model
Bitcoin still has serious environmental costs regardless of its use case. (Which for a currency the 7 TPS cap makes it a joke and as an asset has crazy volatility.)
Stellar is being sued too?
Can someone clarify why XRP is considered a security by the SEC but bitcoin and ethereum are not? Is it something intrinsic in the tech, or is it just that XRP is "managed" by Ripple, a company, whereas BTC/ETH are not?
ETH was classified as a security, but the regulators declined to take action. It seems they feel like they have a better case for intent to deceive here.
https://news.ycombinator.com/item?id=25511198
> Unlike Bitcoin, which issues new currency units through mining, XRP is issued by Ripple
Nobody can "print money" with bitcoin. That isn't the case with Ripple
> Unlike Bitcoin, which issues new currency units through mining, XRP is issued by Ripple
Nobody can "print money" with bitcoin. That isn't the case with Ripple
Also: who would the SEC sue in the case of Bitcoin?
This has been clarified in prior statements:
The SEC does not considers Bitcoin a security, as it's "decentralised enough". Nobody is running Bitcoin alone, selling them alone...
The Ethereum sale was probably a security offering, but it is now "decentralised enough" too for the same reasons.
The SEC does not considers Bitcoin a security, as it's "decentralised enough". Nobody is running Bitcoin alone, selling them alone...
The Ethereum sale was probably a security offering, but it is now "decentralised enough" too for the same reasons.
Look like xrp is going to zero. lawyers from both sides will fight for years over the fate of the table scraps that remain. similar to Enron , in which the stock price went to zero in less than 3 months and the legal battle would ensure for over a decade about what to do with the little money that remained.
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good. i'm amazed this didn't happen sooner. i have no idea how they can call eos and the dao a security offering and not xrp. xrp is one of the most obvious securities ever created.
Related HN discussion about the SEC’s suit:
https://news.ycombinator.com/item?id=25510979
https://news.ycombinator.com/item?id=25510979
Shouldn't these be combined?
Different source articles (SEC.gov and Axios). I don’t believe it’s standard to combine in this case. I expect @dang will make a determination shortly.
I'm no fan of Ripple, but any prohibition on securities-related investment contracts completely violates the freedom of contract.
Price hasn't zero'd out. Says a lot about the sophistication of the holders.
Partially
First a securities designation and being forced to report financials doesn't completely destroy the transactional use case, so thats a big misconception in the crypto world. It would be incredibly inconvenient though and I doubt counterparties for the few Ripple products that are powered by XRP will ever want to hold and use XRP.
First a securities designation and being forced to report financials doesn't completely destroy the transactional use case, so thats a big misconception in the crypto world. It would be incredibly inconvenient though and I doubt counterparties for the few Ripple products that are powered by XRP will ever want to hold and use XRP.
Doesn't bode well for XRP Capital:
http://arringtonxrpcapital.com/2017/11/28/announcing-arringt...
http://arringtonxrpcapital.com/2017/11/28/announcing-arringt...
Some of Trump's men now acting like they should so they can keep their job with Biden?
Nocoiners will blame technology for this.
It doesn't matter how good the technology is if it's controlled by scammers.
who cares what nocoiners think? bitcoin used to be considered a ponzi scheme for terrorists and criminals. short term sentiment doesn't really matter. in the long run the actual technology will speak for itself whether that be good or bad.
Usually posts talking about the same subject are removed almost immediately on HN, but not in the case of Ripple news.... You are very selective about what you sensor.
Disclosure: I have no stake in Ripple
Disclosure: I have no stake in Ripple
Hm? SEC actions against ICOs and whatnot have been regularly covered on HN.
Even cryptocurrency aside, government enforcement against unlawful forms of non-traditional finance is something many people are interested in.
More than a few people here have faced the decision of accepting a more traditional legal fund-raising model or trying some vaguely legal ICO scheme that put them in direct competition in the fundraising market with outright scammers and had to make hard decisions.
Enforcement actions make it clear that people who chose to avoid those waters weren't just leaving money on the table for no reason.
Even cryptocurrency aside, government enforcement against unlawful forms of non-traditional finance is something many people are interested in.
More than a few people here have faced the decision of accepting a more traditional legal fund-raising model or trying some vaguely legal ICO scheme that put them in direct competition in the fundraising market with outright scammers and had to make hard decisions.
Enforcement actions make it clear that people who chose to avoid those waters weren't just leaving money on the table for no reason.
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XRP has the highest market cap? I think I've seen more places that take Dogecoin then take XRP.
Market cap doesn't mean much at all in crypto. XRP's is high because the circulating supply is 45 billion XRP - 2500 times more than BTC, 400 times more than ETH, etc.
I could create a blockchain and issue a quintillion coins and if I manage to get it listed and sell some for a fraction of a penny it'll have a bigger market cap than the rest of crypto combined.
I could create a blockchain and issue a quintillion coins and if I manage to get it listed and sell some for a fraction of a penny it'll have a bigger market cap than the rest of crypto combined.
Also, 'circulating supply' is a misnomer for XRP. The vast majority is held by a small population of individuals who would crash the price if they tried to liquidate
It says third highest in the third sentence of article.
Just came her to complain that Axios articles are written in a very stupid format and that I hope the site burns down with all its editors trapped inside the server farm
Hey, can you please not post unsubstantive comments to HN? We're trying for something different here and you've unfortunately done a lot of it. Name-calling is particularly not desirable: https://news.ycombinator.com/newsguidelines.html.
I don't want to ban you because posts like https://news.ycombinator.com/item?id=23450857 are much better.
I don't want to ban you because posts like https://news.ycombinator.com/item?id=23450857 are much better.
Weird hill to die on but ok, like it’s not great but extreme hyperbole is unnecessary imo.
US govt getting hungry for tax revenue. Expect more actions like this being taken in 2021.
Or they're just, you know, prosecuting crime, which is their job.
Taxes are part of the social contract for living in the US. If you don't like it then you can try finding a different country to live in. But don't act surprised when trying to skirt around the contract gets you in trouble.
Are you aware that the USA taxes worldwide income of US citizens?
You can renounce your citizenship and pay the related fees/taxes for X years. Granted, you need to leave early and not just right before a windfall but if you really philosophically disagree with the contract (rather than just being greedy) then that's not much of an issue. Of course, most people who talk about this are totally fine with having the advantages of the social contract but wish to skip out once they need to pay up for them.
I don't like it particularly but let's be specific here. There is a threshold until which you don't get taxed. I remember it used to be about 90K USD/Year but I am too lazy to google right now.
Right, so basically the majority of middle to upper-middle class expats. People with enough money to be 'fat cats' have tax shelters.
What contract?
I don't remember signing anything.
Do you?
I don't remember signing anything.
Do you?
Have you signed any contracts at all in your life? The protections and restrictions from that contract are enforced by the same mechanism, via the same social contract.
Did you sign anything agreeing to not murder?
I didn't realize we were suppose to sign social contracts, must've missed that memo.
Honestly, if you don't know what terms like "social contract" mean, you should go read what it is, not just antagonize the person who's sharing an educated opinion with you.
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SEC is pretty far from the tax collecting end of the house. Whatever their sins, greed for tax revenue is not a fair one.
Cryptocurrencies are already taxed. The amount the SEC will collect here if they win will be peanuts compared to tax revenue and they aren’t going after regular folks but instead the alleged security issuer. They also have to do this because according you the definition there are plenty of bad actors using the same schemes to sell investments to folks so they have to enforce to reduced fraud overall.
And?
Go fight them in court if you thought you would win, the crypto folks should have enough money for now.
Go fight them in court if you thought you would win, the crypto folks should have enough money for now.
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