Cryptocurrencies facilitate shady deals - Where are the governance principles?

[Sidney Vianna]

Many people believe that cryptocurrencies facilitate shady deals as ransom and ransomware payments, money laundering, criminal, unethical and immoral transactions, corruption, etc...

There are many mainstream corporations that accept payment in cryptocurrencies. Shouldn't a good governance program prohibit such practices? If you participate in a program that can be so manipulated for evil purposes, aren't you complicit?

Thoughts and comments welcomed.

 

[Mark Meer]

For perspective, I've re-worded your initial post:

"Many people believe that the internet facilitate shady deals, fraud, identity theft, criminal, unethical and immoral transactions, etc...

There are many mainstream corporations that use the internet. Shouldn't a good governance program prohibit such practices? If you participate in a program that can be so manipulated for evil purposes, aren't you complicit?"

Or perhaps:

"Many people believe that encryption technologies facilitate shady deals...aren't you complicit?"

Do you see the problem?

 

[Ninja]

It has always been my {understanding/assumption/conclusion} that the lack or severe lessening of regulation around "cryptocurrency" is exactly why is was created, offered, and so immediately desireable.
I suggest that regulating it, and abolishing it would be pretty much the same thing...it would go the way of the Betamax...

I own none of it, and have never been in a position to find a need to do so, so take my view for what it's worth.

Simply to state the counterpoint of the premise:

History has shown us that US dollars facilitate shady deals as ransom and ransomware payments, money laundering, criminal, unethical and immoral transactions, corruption, etc... even with regulation...which is why the regulation exists and evolves over time and our taxes pay so many people to fight such practices...just to attempt to keep it in check and have our "honest" dollars stay worth something.

Cool thread, BTW...looking forward to some interesting an enlightening posts...

 

[Mark Meer]

It has always been my {understanding/assumption/conclusion} that the lack or severe lessening of regulation around "cryptocurrency" is exactly why is was created, offered, and so immediately desireable.
I suggest that regulating it, and abolishing it would be pretty much the same thing...it would go the way of the Betamax...

To my understanding, the main allure of cryptocurrency is the prospect of a money supply that is: (a) asymtotically limited; and (b) not centrally controlled.

These benefits are, in theory, not negated by regulation. However, I'm highly skeptical of government interventions, and their ability to "tinker" with a system without breaking it. There'd be a pretty fine line to walk in crafting any sort of regulation that would not negate benefit (b).

NOTE: I also do not own any crypto, and admittedly my knowledge of it is limited...from what I do know, however, it does seem like an interesting alternative to fiat currencies and the inevitable problems they bring...

 

[Ninja]

Just a curiosity...

The base difference between "real" and "crypto" in terms of value, is where the value is established.
Gold is gold...but valued on what someone's willing to pay.
Currency is nothing, based on "the full faith and credit of the US Government" (whatever that means...)
Crypto is nothing...valued on what someone's willing to pay.

So my curiosity is...right in line (I think) with Sidney's initial starter...
Has Currency ever fallen back on "full faith and credit" or whatever corresponds in other countries, and found nothing there?

If not, it makes it harder to imagine Crypto being 'regulated' by any international body.

Nothing, value based on market perception, being internationally regulated...with regulators paid in crypto...hard to see happening.
The only way I can possibly see that regulation happening is banning it's acceptability for families of financial transactions.

I picture buying controlling interest in a corporation using crypto that is worth pennies the next day...hard to accept.

 

[Mark Meer]

...
Gold is gold...but valued on what someone's willing to pay.
Currency is nothing, based on "the full faith and credit of the US Government" (whatever that means...)
Crypto is nothing...valued on what someone's willing to pay.

I'd say Crypto's value also has an element of "full faith", and that is faith in the algorithms, and supporting infrastructures. Because the technology is relatively new, this element of "faith" has not been yet been established in the general public. I suspect that as systems arise to facilitate transactions, and more people adopt, the value will stabilise.

...Has Currency ever fallen back on "full faith and credit" or whatever corresponds in other countries, and found nothing there?

I'm not sure what you mean... Are you referring to fiat currencies that have experienced hyper-inflation?

If not, it makes it harder to imagine Crypto being 'regulated' by any international body.

There is a distinction to be made here between:
1. Regulating how Crypto is created and valued - An endeavour which, in my opinion, would undermine the potential utility; and
2. Regulating how Crypto is used - this, I think, is more Sidney's concern, but I don't see how you could limit/regulate transactions in practice.

No doubt legions of people are scrambling to work out how to control this, to whatever degree possible. Personally, I'm excited at the prospect of technology revolutionising the way we handle money, and hope the technology is given time to evolve and take hold before the regulators step in...

 

[Sidney Vianna]

Personally, I'm excited at the prospect of technology revolutionising the way we handle money, and hope the technology is given time to evolve and take hold before the regulators step in...

Yep, a lot of people are excited with cryptomonies....$1.1B in cryptocurrency was stolen this year, and it was easy to do

 

[Mark Meer]

Yep, a lot of people are excited with cryptomonies....$1.1B in cryptocurrency was stolen this year, and it was easy to do

Again, I think some pause is needed before we call in the regulators...

First, the source of this appears to be a private company with an invested interest in creating a panic. I'm not saying their analysis isn't true, only that they might be presenting it in a way that overstates the problem...

Second, the very existence of the company is evidence of the market responding organically to emerging issues as the technology proliferates. They offer all sorts of solutions for digital protection...and I suspect there are many other companies doing the same. Insofar as this pans out to be a serious problem, more and more companies will seek such solutions...why do regulators have to step in?

If it turns out that stealing cryptocurrency is so "relatively easy to do" as the article would suggest, then it won't be long until nobody uses it. As Ninja and I have been discussing, the medium itself has no inherent value except what people ascribe to it. If it turns out to be a totally insecure investment, nobody will invest. Give the market time to calibrate...

 

[Sidney Vianna]

Who said anything about cryptocurrencies being regulated?

 

[Mark Meer]

Who said anything about cryptocurrencies being regulated?

Admittedly, in your original post where you ask "Shouldn't a good governance program prohibit such practices?", I automatically assumed you meant regulation. Apologies if I misinterpreted.

...but if that's not what you meant, what DO you mean by a "good governance program"?