[ExI] bitcoin again

[Stathis Papaioannou]

On Sat, 26 Nov 2022 at 02:12, spike jones via extropy-chat <
extropy-chat at lists.extropy.org> wrote:

>
>
> Do pardon my naïve queries and thanks to all who have the patience to
> educate a well-meaning geezer.
>
>
>
> I was with my college buddies yesterday for our annual festival of
> gratitude for… well pretty much everything that has happened to us.  We
> have been a very fortunate generation.
>
>
>
> The subject of FTX came up.  I am no hipster on that subject but I have
> friends who are (you) and they don’t.  They are all geezers too.  So we
> shared our misconceptions, and I came up with a new one, of which perhaps
> some young hipster among us can disabuse me.
>
>
>
> I offered a thought experiment where one imagines itself as a federal
> judge with a courtroom full of angry defrauded investors in FTX.  Its Honor
> is about the age I am now.  Its Honor listens to the plaintiffs talk about
> how they gave their money to this Bankman Fried who then stole their
> money.
>
>
>
> Its Honor asks the obvious: SBF stole your money?
>
>
>
> Plaintiffs: he stole our deposits, which weren’t actually in the form of
> cash fiat money.
>
>
>
> It: You deposited gold coins or physical assets?
>
>
>
> They:  Well no, not exactly, but an equivalent.
>
>
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> It: Do explain yourselves please.
>
>
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> They: we bought the BitCoin from him with fiat money, he gave us the
> cryptokeys to the digital currency we bought.  That part was fair game.
> Then we deposited the BitCoin with him.  He told us he is not a banker,
> disregard his name, he is a digital currency exchange.  He buys and sells
> digital currency, changes one to another only.  It is an digital currency
> exchange.  Bankman doesn’t operate a bank, man.
>
>
>
> It: Ah, so he didn’t actually steal your fiat currency.  He stole your
> BitCoins?
>
>
>
> They: he went off and invested it in risky stuff, some safe bets such as
> American retail politicians, but that BitCoin is gone now.
>
>
>
> It:  I see.  So… this Bankman Fried stole your…em… numbers?
>
>
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> They:  Our BitCoins, ja.
>
>
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> It:  So… he stole intellectual property, so you should taking this up with
> the copyright office?
>
>
>
> They:  Your Honor, he stole our MONEY!
>
>
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> It:  So… you claim that your numbers are… money?
>
>
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> They:  Ja.
>
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> It: Can you buy groceries or pay or taxes with this digital money?
>
>
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> They:  Now one must exchange it for fiat money first.
>
>
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> It:  So this case is about prosecuting this sleazy wretched swindler for
> stealing these numbers you say are money?
>
>
>
> They:  Ja.
>
>
>
> It:  BANG {slams big wooden hammer on desk {why are they still doing
> that?}}  Out of my courtroom, all of yas.
>
>
>
> Based on that thought experiment, I made a prediction for my geezer
> friends: Bankman Fried will not go to prison.  No reasonable prosecutor
> will take this case (because she was probably on SBF’s payroll.)  He
> invested in all the right retail politicians, they will say something
> analogous to our federal judge in the thought experiment above.
>
>
>
> My geezer friends then pointed out that Bankman Fried did not pay taxes on
> his… numbers.  I immediately responded: I retract and reverse previous
> prediction.  They will roast his ass bigtime.
>
It wasn’t just cryptocurrency you could keep on FTX. You could also deposit
fiat currency, such as USD and EUR, and receive interest on it. There are
also so-called stablecoins, a type of cryptocurrency locked to the value of
fiat currency, the advantage of which is that they can be securely stored
and transferred outside of the banking system. People left them in the
exchange because they were trading, they were paid interest, it was easier,
or it was felt to be safer, since if you self-custody crypto and lose you
keys that’s the end of it. Governments around the world have had trouble
deciding whether these things are currencies, securities or commodities for
legal purposes. Taxation laws also differ. Most countries require that you
pay taxes on capital gains, and a capital gain is said to be realised if
you exchange crypto for fiat, crypto for crypto or crypto for goods. But
Portugal, for example, has no capital gains tax on crypto.

> --
Stathis Papaioannou
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