>the problem of fraudulent business practices isn't specific to crypto at all

The scale and the percentage of "legit" to "scam" definitely is.

”Lung cancer is not specific to smoking at all”

"Jumping off a building is actually just flying if you don't worry about the landing. We should remember, the problem of landing isn't specific to jumping at all."

And IMO, more than the scale, it's the immature bragging of being totally better than the old stuff. That said this aspect is not only in crypto, it's in the era.. lots of internet thingies are touted that way, your bluetooth connected balance that is not accurate and will fail in 6 monthes.

Sure, that was not the point of my post. It seems that most people have reacted to this half-sentence, I think the technical discussion would have been far more interesting for this forum, especially when it comes to applications outside of blockchains. I could list more examples where substantial losses to real clients (of "normal" businesses) could have been avoided if there was a better way of proving simple facts like bank balances to auditors (it's in fact partly related to my work).

The current process basically looks like this: an auditor will ask the bank to confirm that client X has such and such balance with them. Of course, the bank needs to be sure that the auditor is actually who they claim they are, so they get in touch with their client to confirm that they can tell the auditor their balance. Since this is a bit tricky if the auditor doesn't have a direct line of communication with the bank already, it is often facilitated by the client directly asking the bank to issue a balance confirmation to the auditor, and that's an entry point for impersonation attacks (in an overly simplified manner, that's also what happened at Wirecard). We probably don't need the exact fancy machinery of Merkle sum trees and zero knowledge proofs outlined in the OP, we also don't want to bring in blockchains, but I was wondering whether we could use some of those ideas to make the audit process for normal firms a bit safer.

Many of us were dismissive of everything cryptorelated even when many others became millionaires or billionaires believing into it. If you needed something as pathetic as the FTX fiasco to change your mind, you’re right, that’s unreasonable for sure.

> many others became millionaires or billionaires believing into it

Yeah, being first in a Ponzi scheme tend to work well for some people. For every winner in cryptocurrency there are losers as cryptocurrencies are a zero-sum game.

decidedly negative sum as a lot of energy has been wasted to redistribute wealth

Don't forget money spent paying employees, executives, buildings, leases etc. Mining is just one of the costs of the whole crypto worlds. It's an amazing industry that keeps providing nothing of value (or you can argue it creates negative value) while finding creative ways to spend money on it.

Burning thousands of GPU hours just to update an ineffective database is surely the most prominent one.

Don't forget money spent paying employees, executives, buildings, leases etc. Mining is just one of the costs of the whole crypto world. It's an amazing industry that keeps providing nothing of value (or you can argue it creates negative value) while finding creative ways to spend money on it.

Burning thousands of GPU hours just to update an ineffective database is surely the most prominent one though.

> the problem of fraudulent business practices isn't specific to crypto at all.

Sure, and droughts aren't exclusive to the desert either, but I've been living in a desert for the past 4 months and I'm yet to see it rain.

I hate to no-true scotsman you, but if you kept significant amounts of cryptoasset in a centralised exchange, you weren't living in the desert, you were living in a sandbox.

If one held a coin that appreciated in value from the massive flood of retail investors using CEX, even if you custody your coins and then pointed to the price as some indication of cryptos success over the past 5 years like pretty everyone in the crypto community, and then now claim that wasn’t real crypto, well that an indication of cognitive dissonance.

I like them for reasons separate to their price. This is actually a fairly common view in the community, even among people like Vitalik. /r/ethereum doesn't even allow discussion of the price because that's a whole separate topic that is not necessarily all that interesting to the same people who are enthusiastic about ethereum.

Indeed, Vitalik warned people a few times at various points in the run up that crypto was in a bubble. The current crash is not surprising to anyone who has been paying attention.

> the problem of fraudulent business practices isn't specific to crypto at all.

The problem with crypto is that the bulk of the value is created through seigniorage of the tokens required to make it work, not actual utility derived from its technical features, for example better privacy or enabling new transactions.

So in reality the pump & dump, rugpull and speculative bubble dynamics are characteristic to crypto because there is very limited actual wealth created and a massive conflict of interest from the players to cash in on the juice flowing though their systems, which are nothing else than unregulated and inferior copycats of existing financial institutions, state issued currencies, banks etc.

And Wirecard was a clear fraud. They didn't steal customers deposits so. And, all in all, Wirecards accounting was lightyears better than FTXs, Wirecard held bank liscenses which requires proper book keeping of assets and deposits.