The problem is that any "legitimate" use case is negated many times over by all the illegitimate ones. It would be like saying let's legitimise terrorism because sometimes the terrorists might (just might) be freedom fighters, when in actual fact terrorism on the whole does way more harm than it does good. In the opening example, sure some money may have got through to Ukraine via cryptocurrency (although some was stolen by scammers pretending to be Ukraininans, and more much money was transferred more securely and efficiently through traditional means), but any good that did was completely undone many times over by Russia's use of cryptocurrency. Put politely, cryptocurrency is a net negative for our society and environment (by a considerable margin).
You are making blanket statements without backing it up with evidence. Even if you do back it up with evidence, it will be anecdotal, since Russia has been actively working on crypto infrastructure and reserves, while Ukraine hasn't. Also, you are comparing individual Ukranians with the Russian state.
Also; Bitcoin isn't net negative for society and environment. Another blanket statement given without any form of evidence. Please note that the environment FUD has been refuted many, many times over.
> Please note that the environment FUD has been refuted many, many times over.
And here you are making a blanket statement without backing it up with evidence.
Bitcoin spends more than $1M/hr through proof-of-work, https://www.crypto51.app/ , essentially out-spending any doublespenders. This is wasteful.
If the inflationary reward were reduced or eliminated, the transaction fees were more in line with the externalities. But mining budget would also drop, which means less security (which means more waiting for large transfers to gain additional confirmations).
As such, a "Bitcoin Green" fork with reduced mining rewards would be very welcome by me at least.
PoW security is a vector, and doesn't flip from secure to insecure at some specific point. A gradual reduction in mining hash rate doesn't render the chain noticeably less secure.
Feel free to fork Bitcoin and use it as an alternative. Please note that this has been done in the past, and will probably be done in the future. There is a reason why the economic majority remain with Bitcoin, even though PoW isn't energy neutral.
> PoW security is a vector, and doesn't flip from secure to insecure at some specific point.
The network does flip from secure to insecure whenever the cost of mounting a 51% attack dips below the amount an attacker could expect to gain. Markov and Schoar [0] made a convincing case last year that as minted rewards from mining drop, the active mining pool will naturally shrink and become more and more vulnerable. PoW does not prevent misbehavior; it establishes an incentive system to encourage participants to behave properly, and that incentive is subject to realignment by market forces.
It's not a network-wide flip. Certain victims suffer only, and they are very few - the ones not waiting for enough confirmations after receiving a large amount. For example, right now with a cost of mining of $1M/h, after receiving $2M, you should wait for 2 hours (12 confirmations), before accepting it as settled.
I am going to criticize your blanket statements without backing it up with evidence by making other blanket statements also not backed up with any evidence.
This article completely ignores the "embodied carbon" emissions and e-waste generated by the mining ecosystem [0]. Electricity usage is not the whole story.
Without Bitcoin, Ransomware would essentially not exist. With Bitcoin, 37% of global organizations said they were the victim of some form of ransomware attack in 2021.
Beyond that, there are plenty of inflation hedges that don't require massive damage to the environment. Look into Series I Savings Bonds from TreasuryDirect.gov. Currently yielding 9.6%. There's gold, silver, productive assets like stocks and rental properties.
I think Cryptocurrency is one of the worst hedges against inflation anyone could come up with.
A lower bound of the benefits provided by the network (the transaction fees paid) is 50% higher than the ransomware. I am surprised it is that low, and am sad that the scammers are so successful.
But at what point does banning something become warranted? Roads, planes, cities, and spoons are also used by criminals. And "it is better that ten guilty persons escape than that one innocent suffer."
I'd rather argue that paying ransoms should be illegal, since it amounts to directly financing criminal activity.
> gold, silver, productive assets like stocks and rental properties
It isn't just ransomware. It's money laundering, terrorist financing, drug trafficking, human trafficking and so much more.
Think about it for a second - of those $900 million in transaction fees, how many of them were transactions involving legal vs illegal activities? Anyone involved in legal activities would have a much easier time and lower fees using ACH, wire transfers and other methods.
Well, that is upsetting me. I am profoundly disappointed, but I think you have a serious point.
I will look for some more data on illegal activity. I hope the data is not accurate, but I would only be lying to myself if I refused to believe reality.
I accept that the lower bound of the value of the network does not surpass the illegal activity. But most of the volume should still be presumed innocent.
Are there any resources to read about Russia's use of cryptocurrency during wartime? It seems purely hypothetical at this stage. I thought, like China, they would ultimately ban it to prevent civilians from easily exiting the Russian economy. (another legitimate use of cryptocurrency that is often overlooked)
> I thought, like China, [Russia] would ultimately ban it to prevent civilians from easily exiting the Russian economy. (another legitimate use of cryptocurrency that is often overlooked)
You're kind of proving GP's point here. Evading capital controls is a criminal activity, and, though this is an example of a crime that we would all agree is morally righteous, you're still arguing that cryptocurrency is good because it makes crime easier.
Good catch, but assuming evading capital controls is crime, then this becomes a debate of victimless crime. Under normal circumstances, it's not victimless, because it can hurt the economy and everyone in it. Who is the victim of a Russian civilian evading their establishment? I don't see the criminals running the establishment as a victim; they already did the most damage to their economy, and they're still the perpetrators of other crimes with many victims. Cryptocurrency makes everything pertaining to money easier, unfortunately crime too depending on what is considered crime, and I think it's still a net benefit. No matter what happens, we can't rely on implicit control of money as an easy way to punish crime anymore, no amount of debating or essays or letters will close that box.
> Cryptocurrency makes everything pertaining to money easier, unfortunately crime too
This is where you lose me. Cryptocurrency makes most transactions considerably more difficult, and so far, the one segment of the economy that has consistently been willing to accept those tradeoffs is the criminal world. No one is going to argue that the law is always right or that criminals are always wrong -- after all, Oskar Schindler and Aristides de Sousa Mendes were criminals -- but what you are arguing here is that it's important to retain a tool to subvert the law for when the law becomes unjust.
I'm not saying you're wrong! I just happen to believe the harm of bad crime enabled by crypto outweighs the positive effects of crypto-enabled crime, but that's a personal opinion and one that might change if the world does. People in the US make a similar argument about guns (that retaining the ability to overthrow a tyrannical government is worth the extra gun crime we have to ensure); I disagree with them, too, but I would not be so sure if I lived in eastern Ukraine today or Berlin in 1941.
I see it as a kind of gold, or perhaps in a less cliche way of putting it, a sovereign unit of account. I call it easier because it can be handled entirely digitally with no great expenses to transfer it around the world unlike gold, therefore easily being used on the smartphones of people who need it. It is true that the tech currently has many shortcomings in accessibility now, but I see none that can't be overcome with further development. For an example, see Celo's development of a decentralized phone-number-to-EVM-address linking system. Actually, a lot of the projects surrounding Celo are what inspire me to publicly defend cryptocurrency, but I don't bring it up much because I'd be accused of shilling them.
Anyway, I think that cryptocurrency enables lots more non-criminal and should-be-non-criminal activity that can far outnumber the harmful-criminal activity. Perhaps it's already that way, or perhaps it will be so in the future. "In the future" is admittedly another pro-crypto cliche, but we're seeing results headed in that trajectory like the ones mentioned in the financialinclusion letter.
Depends on what you consider legitimate or not. Many proponents of crypto hold the view that taxation is theft by definition, and any tax evasion, therefore, not only legitimate, but also a moral obligation.
Are you seriously comparing cryptocurrency with terrorism? One is a inherently neutral tool, functionally almost identical to cash, the other is a inherently harmful violent action.
I mean there are plenty of countries where the idea of free trade being inherently harmful is accepted as common knowledge, but the US isn't one. Your view is one of extremism.
Maybe we need to modernize Godwin's law with "terrorism".
They are clearly not and it’s daft to suggest they are. They are using an extreme example that should be easy to agree on to establish a principle or point that then once understood should be used to analyse the actual, less obvious, thing they are criticising.
Whether or not their point is a good one is a separate issue.
My point is that this is an apples and oranges comparison. An appropriate comparison would be between banning terrorism and banning sending cryptocurrency to enemy governments. Thankfully both are already banned so there's no need to debate on this.
> Are you seriously comparing cryptocurrency with terrorism?
Well, terrorism is a way of framing things; it's how the momentary victor labels the momentary loser. Cf. WW2; "terrorists" during the war became heroes when the war ended, and victory switched sides.
Cryptocurrency on the other hand, provides zero benefits, while contributing immensely to C02 emissions and global warming, which could end life on earth as we know it.
So the comparison might not turn to crypto's advantage.
