2759

Funnily enough, they make this old gag eerily accurate:

2760

I need to exit this topic and go back to being an amused observer. I don’t understand this stuff and I don’t want to invest the effort to understand it.

This does seem to be fueled by greed, but isn’t that the basis of just about all financial investing? Put your money in and pull it out later with a profit? There seems to be a bit of bubble fever about crypto, though. It’s still early enough to get in on the bubble while it’s still expanding, seems to be the sentiment. But if everyone is talking about it, isn’t it already too late?

The icing is that crypto is beyond government regulation, which seems interesting, but it also seems like it means there are even more ways to invest and get fucked over.

2761

Yes, unless you are building something to exploit the crypto-rubes yourself.

I think there is also a LOT of crypto-millionaires and crypto-thief-millionaires who all desperately need mom and pop and institutional investors to come in so they can trade out their meme-coins for FIAT currency to actually pay for their lambos and condos.

2762

I don’t want to over-sell this, as there is plenty of speculation in traditional financial markets (though that is not something I recommend retail investors participate in), but the difference in principle is that most vanilla non-crypto investments give an inherent return (eg interest, dividend) which is in some way based on underlying economic value generation. No matter what happens to the valuation of the asset, as long as the underlying enterprise is around, you’ll be getting a steady income. Or failing that (eg many tech company stocks), the shares give you a quasi-ownership right over the assets and future cashflows of the issuing company. which a) put a floor on the valuation and b) give you something to seize, in theory, if the enterprise fails. Almost no crypto does that (even the ones that purport to share future cashflow don’t generally come with the statutory or even contractual protections of share ownership), and certainly not cryptocurrency like bitcoin or ether. That doesn’t necessarily make crypto a bad thing (lots of non-traditional “investments” have similar characteristics, especially commodities, and to a certain extent fiat cash). But there are plenty of other reasons to stay away from it, especially the rampant fraud and hacking.

2763

BTW, David Gerard also has a breakdown of the Beanstalk attack, in rather more layman’s terms:

2764

What’s a legitimate use of a flash loan? It seems weird to borrow money and return it within the same transaction, but there must be some use case where that is desired by the user and the recipient.

2765

I’m struggling to think of any, really, but I’m sure it reduces friction for something. In a traditional market context it might improve liquidity around market making, but it doesn’t seem necessary for that, and especially in a market structure where holding a large proportion of a given token often leads directly to absolute control of said token, it does seem like it’s rife for abuse. It seems like proof-of-stake coins would be especially vulnerable.

2766

There’s some potential use cases here, but it mostly seems like a security hole by design.

2767

Arbitrage mostly. If I see 2 exchanges with a price difference then a flash loan allows me to better take advantage of that. Usually the arbitrage difference is small and requires volume to make it worth it, so if I can borrow a ton of money, buy the asset at X, sell it at Y, then repay the loan all within a single blockchain transaction, it allows me to better take advantage of the opportunity.

2768
2769
2770

That’s hilarious! It’s hard to imagine nobody spotted it… which makes the alternative so absolutely terrible.

2771

They also introduced the swastika emojis on today … (checks notes) Hitler’s birthday. Really, April 20th? Are stoners all secret Nazis?

(According to webisgoinggreat.com, Binance has since changed the emojis to be something else.)

2772

I haven’t laughed this much in a while! I forgot it was Adolf’s B-day, of all days. I’m not usually one to pepper my Whatsapp buddies but this one needs to be shared.

2773

I’ve always been skeptical of cyrto, hated the ecological impact of bitcoin in particular, but never had an active hatred of crypto until this last week.

That’s when my brother-in-law, a terrific caregiver, was just conned out $12,500 most of her life saving by some SOB, who convinced her to to send him money via Bitcoin.

She is about 27, studying to upgrade from current CNA to an RN, she has been an absolute angel taking care of my brother-in-law who has Parkinson and dementia. Extremely honest, a couple of years she was victim of identity theft which has been very difficult to deal with.

Last week her computer was hacked, and message was on her computer (just like on a TV show). Something about the Federal reserve has frozen your accounts and you need to send $12,000 in Bitcoin to unfreeze. Why she didn’t contact, the police, my sister, her finance is a mystery but she didn’t.

Instead she went to one of the only/few Bitcoin ATM in the state, and made 3 depositing of just over 12000 total bought some fractions of a bitcoin which then dutifully transferred over to the scammers wallet. She was heartbroken, and begged the woman, who the store where Bitcoin ATM was located to help her, but of course she couldn’t help.

I suppose if the money had been wired it also likely would have been gone, although wires can be reversed, cash can be recovered, checks can be stopped. But Bitcoin you are pretty much hosed.

At a first approximation, crypto is for criminals.

2774

Actually, to about 12 decimal places. Sure, it may be for “anonymity”, but crypto tumblers are purpose built cryptocurreny laundering services. That which isnt outright fraud are boondoggles.

2775

Sorry to hear this, that’s awful. Bitcoin/crypto is one of the few technologies I’d welcome being made illegal, its impact seems overwhelmingly negative both on society and the environment.

2776

That’s a terrible story, sorry to hear it.

My sense is that if she had called the police or some other authorities, they would have done nothing at all. All of these scammers seem to operate with total impunity. I get phone calls from people every day, who claim to be the Social Security police or the Federal Reserve Bank police or whatever. Apparently they don’t have any fear at all. All of them are trying to frighten vulnerable people into sending them money. It doesn’t matter how many times you report them, they never stop. You can try to block their numbers, but they’re all fake caller ID numbers, taking advantage of legal caller ID spoofing capabilities intended for call centers.

2777

She did go to the cops after the fact, and of course, there is nothing for them to do.

If you are a hospital or business that pays millions in Bitcoin ransom, the FBI will watch the coins, but for the small-time stuff no help.

2778

Yeah. The thing that surprises me is that these scammers are pretending to be federal law enforcement officers or representatives of federal agencies. You would think that would be enough to get federal authorities interested, but nope.