And if you do hold the private keys to your crypto, all you hold is an IOU from a risky market full of fraud and rug pulls.

Many coins have failed, many more will fail, and many if not all will drop to zero as the mania subsides. When that happens it doesn’t matter where your keys are if the market turns illiquid in seconds during a crash.

You hold "an IOU from a market"? I'm not sure that's how that works.

Markets have varying levels of risk.

I mean it still kind of matters where your keys are if the market turns illiquid. Its the difference between losing an asset and not.

I can definitely see a lot of cryptocurrencies losing a ton of a value but they do have a legitimate use for remittances. If you're transferring $1000 it doesn't matter if you convert it into 1 bitcoin or 100 bitcoins since your wife is cashing it out the next day for 20,000 pesos.

Your argument applies equally to fiat finance too: in case of a catastrophe it all goes to zero or turns illiquid.

The fact is that billions in locked value have accrued securely over the years in battle tested protocols like curve, aave and yearn.

Well that level of risk certainly applies to some risky instruments (say CDOs), but I'd say there is far less risk in VWRL say than speculating on the value of a plethora of currencies which are almost purely vehicles for speculation rather than used for everyday transactions.

Doesn't matter if you own your keys if nobody wants to buy your Crypto/NFT etc.

Re your numbers, I'm afraid I don't trust any of the numbers in this market as none of them are audited.

> I'm afraid I don't trust any of the numbers

You don’t have to. That’s the point. It’s a trustless infrastructure, with public data that anybody can audit. There are countless independent services that are reporting the same numbers, from querying the blockchain data.

Uhm, no, the pricing is mostly provided by exchanges which have been found guilty of wash trades, money printing, front running and every crime in the financial playbook, and most definitely are not audited.

So while the blockchains provide public records of transactions, the prices are not set by the blockchains and participants are anonymous enough to be difficult to track.

The smart-contract exchanges agree on the same prices too, though. They can't lie, because the entire exchange is public record on the blockchain.

Uniswap, Cowswap, Kyber, Balancer, they all agree.

It’s a crypto issue. You can figure that out by restating their advertising/business model using ‘cash’ instead of crypto, and asking yourself how long they could go before getting shut down.

Hint: they likely could never have even gotten to the point of taking customer deposits, or would have been shut down within weeks or months at most by regulators.

Then the issue isn't with crypto itself, but with the regulation of crypto.

Which is a philosophical issue with crypto - the first cryptocurrencies were designed specifically to avoid government regulation.

But here we're talking about exchanges. Resistance to government censorship/control only applies to on-chain activity, not centralized custodians.

Most of the custodians work very hard to side step regulation and enable scams, albeit not necessarily openly on the second part, and are enabled by the on-chain primitives.

Pretty hard to avoid gov’t oversight/regulation when a USD Wire and ACH goes through the fed, for instance.

Easier when it goes through a blockchain which they can’t control.

Which is why a lot of exchanges (and all the sketchy ones) use things like Tether and stablecoins, and avoid US banks.

It's wild to me that crypto bros will screech about decentralization and how the government shouldn't be able to tell you what to do with your money, then turn around and screech for goverment oversight and regulation. Absolutely nonsensical group of people.

It does kind of feel like cryptocurrency is sort of a collective Dunning-Kruger syndrome of programmers and finance.

Programmers see all this bureaucratic regulatory red tape and decide to try and make something more efficient by removing it and claim that they've saved finance by reinventing it.

Then one by one, they start seeing why each of these regulations exist; the regulations didn't exist to keep the little person down, it was to protect against scams. And then they suddenly want regulation on their funny money, at which point cryptocurrency just kind of becomes a worse version of real currency.

Let’s, uh, not bring up the same thing about social media heh.

It's almost as if "crypto bros" are not a hive mind, but are ordinary people who hold unique and conflicting sets of beliefs.

Forums make it worse, IMO. Frankly, it’s nearly impossible on many to even keep track of who is being responded to half the time, let alone personalize them.

It’s like taking to some floating Janus head sometimes.

In person interaction doesn’t work that way.

I wasn't expressing any opinion on how crypto should or shouldn't be regulated. I was only pointing out that if someone is concerned that banking regulations don't apply to crypto exchanges, then their concern is about regulations, not about crypto itself.

If the largest value prop of the industry (and historically crypto primitives) is that it is un-regulatable (and unregulated/get rich quick) the industry doesn’t get a free pass.

> It’s a crypto issue. You can figure that out by restating their advertising/business model using ‘cash’ instead of crypto

Yeah, I think it falls down pretty quickly; if nowhere sooner, then at the point where “We issue our own cryptocurrency” turns into “We issue our own cash”.

It’s called counterfeiting or ‘chuck-e-cheese tokens’ or ‘issue our own stock’.

All point out the same issue, as both have various regulatory precedents and/or obvious real life issues.

In FTX’s case it’s impossible to hold your keys, right. The condition to get interest payments is to allow them to manage your funds and invest/loan/etc.

Is there any crypto “bank” that promises to pay interest while you hold your own keys?

There are decentralized staking mechanisms, but you do take risk in exchange for the interest rewards.

If interest rates are any indication, depositing DAI on Aave for example is seen by the market as lower risk than US Govt treasuries.

This makes some sense, as with treasuries you run the risk of not having access to your cash when you need it because of trade and settlement windows. Funds in Aave are 100% liquid.

How would holding keys to a crypto wallet full of FTT prevent large-scale fraud via currency manipulation and subsequent devaluation of your holdings?

This is indeed a failure of crypto, because FTX was the one primarily in control of the coin supply.

Bitcoiners ask the same thing about holding a bank account full of dollars, or in many other countries (like Lebanon, etc.) even worse currency, or they can just freeze your account, etc.

Anyway, it should be clear to people that the 7% in an outside currency has to come from somewhere. And most of this stuff has been a zero-sum game so the money comes from:

1) Investors who bought the top

2) Traders who got liquidated

3) IPO investors who bought shares in a money-losing business model like WeWork

4) Advertisers whose ads didn’t pay off (yes, advertising is a zero-sum game too)

Sadly, most people do not realize it’s a zero sum game and the bagholder class only grows and grows until the speculative bubble pops.

> Bitcoiners ask the same thing about holding a bank account full of dollars

It’s a good question. The answer is deposit insurance and, perhaps, narrow banking. Not self custody for the masses.

If you have enough money, you will not be immune to rubber hose decryption attacks or other shows of force.

Either you live in a country where you can trust your money system, or you don't.

It's always been my take that the reason ideological Bitcoin ghouls are so enthusiastic about directly contradicting their entire argument against government control over money, by lobbying countries like El Salvador to adopt Bitcoin as a national currency, is because they recognize (cf. lead pipe attack) that there is ultimately no replacing men with guns when it comes to defending the value of money. Quote back by math quote doesn't cut it when someone has a mortar aimed at the middle of your mining farm. Or even someone with a couple Jerry cans of gasoline, matches, and nothing to lose after some anon creep chilling in a Thai brothel pulled their life savings to fund his 'tech nomad' lifestyle.

And since they are too fragmented and comically self-serving to organize anything like their own soveriegn state, they need to piggyback off an existing one.