I wonder if in the history of banking the first banks had this much fraud with normal currency? Or is this just specific to Bitcoin? It feels like the stats now are just where by default everything with Bitcoin is (eventually) fraudulent and honest services are the exception.
There's a reason why the middle ages had a huge number of coins. A mint could be trustworthy for a generation as some Noble family takes care of it with high degrees of trust. (Usually proven amounts of silver in each coin, for example)
Then the wrong child becomes the leader of the family and and bam, they start reducing the silver weight and replacing the coins with cheaper metals and the entire trust in that coin disappears.
And that ignores issues like the Conquistadors coming back from the new world with literally tons of gold / silver and royally messing up the gold / silver coinage economy.
> And that ignores issues like the Conquistadors coming back from the new world with literally tons of gold / silver and royally messing up the gold / silver coinage economy.
Which was preceded by the exact opposite problem in Europe:
>>Then the wrong child becomes the leader of the family and and bam, they start reducing the silver weight and replacing the coins with cheaper metals and the entire trust in that coin disappears.
//
That's actually a plot point in an anime called Spice and Wolf[1]. I encourage anybody who has an interest in medieval economics and early capitalism to watch it.
A lot of my historian friends liked that show, especially because it tried to focus more on the mundane issues in the Middle Ages.
Mr. Lawrence had a leg up on his rivals because he's the main character with practically a modern economics degree. So his ability to predict market trends and focus on important information is head-and-shoulders above everyone else.
Holo the Wise Wolf in contrast, is a minor, fictional pagan deity without much understanding of human culture. But her sharp wits gives her a lot of street smarts that stands above even Mr. Lawrence. It seems that she can control the yields of wheat fields to a certain degree, but since the recent invention of crop rotation and some fertilizers, her followers were no longer praying to her (and probably don't need her anymore). So she heads off with Mr. Lawrence (the first merchant to swing by after she decided to leave).
Holo serves as a good stand in for the audience as well: as Mr. Lawrence holds roughly 15+ different coins out and describes their relevant marketplaces, Holo of course gets bored of the discussion (much like the audience probably does).
Giving Mr. Lawrence "knowledge", while giving Holo "wisdom" allows the pair to balance each other out in their journeys. Especially since the basic plot of the show is "follow rumors to make money". Holo can accurately sniff out the truth out of rumors, while Lawrence can predict where the markets go once he's given the facts.
EDIT: In many ways, Holo serves as Watson while Lawrence serves as Sherlock in most situations. Lawrence explains the plans to make lots of money to Holo (much like Sherlock explains the situation to Watson, since Watson is the audience stand-in). But unlike Watson, Holo quickly catches onto the money-making game and is quite capable to changing the plan for the better. So its actually a very fun dynamic to watch the two. Just enough explanation from Lawrence, and just enough improv from Holo to keep things interesting, even though they're just buying and selling things throughout the show.
It wasn't fiat money, they were deposit notes representing gold or silver. And while outright fraud wasn't much of an issue since physical banks can't just disappear and leave town overnight, if the bank collapsed the currency would probably not be redeemable anymore.
It was not fraud by the institutions as such, but counterfeits was a big problem with as many as 7000 unique notes it was next to impossible to know which was genuine.
Post the civil war as much as half the currency was estimated to be counterfeit. The secret service was given the policing money task as a direct result.
There was streamlining of currency issue after that.
George Byron Merrick's book Old Times on the Upper Mississippi: The Recollections of a Steamboat Pilot from 1854 to 1863 [0] has a fascinating chapter on how people got rich on wildcat banking swindles.
I mean a currency that protects you from government intervention also protects criminals from law enforcement. They're just two sides of the same coin.
The first banks would have dealt mostly with physical money / gold, so it would be a lot harder to pull off this kind of fraud.
What if we had direct democracy and your case would be reviewed by every citizen? Would you still fear to be spyed upon? Would you fear to be detained without reason?
That's what Cryptography promises. A uncorruptable system which serves society with incentives correctly alligned.
I think it's more that the problem can seem deceptively simple because you're using the default system everyone's assumptions are based on and you don't need to understand the history behind it to have the basic banking experience. The average cryptocurrency booster hasn't studied the current system or its history[1] so it's easy to focus on the happy path and say you're making things easier until you hit a reminder of just how hard it is to stymie abusers when the rewards are high.
1. education from their fellow salespeople is typically worse, like getting medical advice from a health-supplement vendor.
Simple or not, the current solution is far from perfect and will be reinvented and will fail again and again until a better solution emerges. There is no way that the current banking/government/democracy/economy system will survive this century.
I’d like to know this as well. I suspect there’s more because now the entire contents of the vault can fit onto a slip of paper. So just logistically can be moved around more than previous bank eras.
you don't need to go that far back in time to find banking issues basically in every major geography, with different kinds of currencies, digital or not.
Money laundering is a different kind of a problem from what we're talking about here, though. Those are mostly KYC or internal controls failures - I'm not saying they're a good thing but they're not impacting other customers of the bank really.
Find some recent example of the owners of a bank/exchange absconding with their client funds: that would be closer to the matter at hand.
Last example of a bank failure where ordinary people lost a lot of money I’d say was the failure of Lehman Brothers. Lots of risk averse retail investors were sold Lehman certificates with somewhat better yields (“mini-bonds”) because Lehman paid high commissions to the retail banks, eg in Germany and Hong Kong.
But you’re right. Mostly the normal banks and exchanges are regulated and incidence of fraud is low. A lot of that regulation is “lessons from past failures”, which crypto hasn’t had yet.
Did any customers actually lose money over the Wirecard thing, or was it just the shareholders and lenders that lost out? I couldn't immediately find anything about customer losses.
This still happened as recently as 100 years ago. Con men would set up false banks in small towns and make off with a lotnof money. Lookup Yellow Kid Weil.
Bank owner embezzles for awhile, bank robber shows up, publicly robs the bank, makes off with $1000, bank owner claims $10,000 was stolen. Bank owner now has a reason why he can't give everyone their money back.
So what changed? I'm not concerned with any current bank making off with my money (although I'm more concerned with risky practices leading to them to go under, which is legal and as 2008 proved, the tax payer will absorb).
I think hard currencies took care of trust about intrinsic value. It's only the establishment of rule-of-law and regulations allowed fiat currencies to proliferate. Regulations were written in the tears, fears, and anger of common folk. There's essentially no way to trust someone else with a BTC wallet and there's no trust in BTC's value because there's nothing behind it... it shouldn't be used to store value long-term, only for quick, transactional events.
Banks and municipalities who issued their own fiat currencies I believe encountered many more problems.
> Nothing is known about Diogenes' early life except that his father, Hicesias, was a banker.
> Hicesias and Diogenes became involved in a scandal involving the adulteration or debasement of the currency,[10] and Diogenes was exiled from the city and lost his citizenship and all his material possessions.
Deposit insurance is a relatively new concept, at least in North America. It didn't exist in the US until the Great Depression. Canada did not introduce it until 1967.
A lot of what's happening in the crypto space is just self-professed libertarians re-discovering fire. They start off by being skeptical of banks and monetary authorities, but eventually realize that an unregulated free-for-all attracts bad actors that ruin it for everyone else. Hence the wet blanket of AML + KYC + Deposit ratios.
Even in the modern era there's a lot of fraud and scamming going on. This sounds like a classic Ponzi scheme, and Bitcoin-based Ponzis are just one corner of a broader universe of similar scams all across the globe. They've even brought down governments and the odd country...
What if the exit scams happening today in China are 10x worse than South Africa’s, because it’s so much bigger, but we aren’t hearing about them? Never mind history.
Its just as large and just as consequence free as bitcoin/crypto heists and fraud despite the paper trail
Some reinforce their respect of one system by looking at the proportions of the money supply and transactions, I would say that isnt that important as the industry / interest in fraud has a fixed size
ACH fraud was 1% on 21 billion$. That's 210 million in total, way less than the 4 billion from the article with 1 Bitcoin scam ( of an exchange, again).
None of the ACH frauds were the exchange/bank running away with your money fyi.
And probably a lot of them, if end users, was even insured.
Edit:
Sorry. Made a mistake corrected below by a comment and follow-up.
0,08% fraud on 51 T. Is still way less than this sole scam vs. BTC market cap.
I took the 1% from you, assuming you got it from somewhere reliable or at least that you believed in it. (I looked for it in the report summary; I didn't find it; I assumed you got it from the full report, which I don't have access to.)
If the correct figure is 0.08%, that's almost $41B on $51T (more now, as the network volume continues to grow).
Sure. Thanks for correcting me and sorry for the inconsistent number at first. It wasn't easy to find numbers since most just retold the original mentioned article without absolute numbers.
But the entire fraud /year is way less percentage then this sole scam from the entire Bitcoin market cap valued against its peak.
So his comment is actually a net positive for traditional payments ( even if you neglect insurance, ... )
FWIW, 0.08 basis points = 0.0008% = 0.000008 = 8 in a million = 8 cents in a million cents = 8 cents in 10,000$, as the article says. (0.08% would be 100x more.)
No worries. Basis points are somewhat weird if one is not used to them, and the article is a bit cheeky in that it mixes cents and dollars, making it extra confusing.
Every time that I read a story like this I am always wondering: how come the people doing exit scams (suppose it is one) aren't more afraid of the repercussions.
Given Bitcoins track record, it wouldn't surprise me if some of the funds would belong to quite questionable characters, so you are basically stealing money from organized crime groups.
It is obvious that you can buy some protection with $3.6B, however your face and name is publicly known, meaning that you will be on the run for the rest of your life or possibly face a very gruesome death.
The simple answer is that they can affect the change that they are interested in, with that money now. Instead of imagining for their whole lives.
Basically, life isnt worth living poor, or the current state of the world isnt worth being unable to change. Death is more favorable than skimming table scraps.
Although the luxury consumptive spending is a tiny portion of what is possible, and nobody can take those experiences away from you, the funds contributed to charities, political campaigns, and investments allow shaping the world as you see fit now.
So thats the explanation, without justifying it. Despite recent attempts of making society seem more fair, this has always been the history of the world. Seize and lock in a millennium of control and favor for your family.
I think we could reduce the issue down to basic human greed and arrogance. Just as many financial crimes are committed by people who didn't really need the money to begin with or just continued their illegal activities even though they made more than enough to quit.
You are correct and gruesome deaths happen, like with OneCoin. The ponzi queen, however, is gone and “no one” know if she is dead or managed to disappear alive.
That's overblown. Going into hiding is easy with a pile of money by your side. Just cross into a country with a different language, change your appearance by changing your body fat % or growing hair, then buy yourself some new ID documents. That's literally 1 or 2 years of work and you are now successfully hiding in plain sight. Most people would take that trade off
Well, even if you managed to disappear yourself - what about your family / friends? Don't you think that these people would go after them to get to you?
Generally I would assume that you might pull it of if:
- you leave your home country and never come back
- you cut all connections with friends / family
- you spend a decent chunk of the proceeds on personal protection
- you never talk about your previous life
- you drastically change your appearance
- you never travel and keep a very low profile (e.g. no Ferraris, no mansions, no superyachts)
But these are a lot of IFs and you might still slip.
You should also consider that some people will never forgive.
Here [1] just a random news article about someone getting killed because of a dispute that happened 20 years before.
Sorry, no “fully collateralised” product delivers 10% return per day, doubling every week, turning 1$ into a million billions within a year, enough to buy the entire GDP of the USA over that same year 50 times over.
(Or, if there is such a product and you have access to it, let me send you a dollar, and you give me the US GDP in a year and keep the other 49 US GDPs for yourself for services rendered).
If you dont understand that market then you will keep adding irrelevant conditions
None of the crypto products offer those yields for very long, there are enough different products that capital can keep moving between them to sustain a given rate to investors
Whatever is being offered - from the legitimate services - is not different than what banks had been doing with customer deposits
Like I said, WHY people pile into any particular custodial solution is because they cant or don't want to discern
If you want to debate about the skepticism that should have been lobbed at a compounding version it doesnt add anything to the discussion
Outside of crypto nowhere is offering 10% on anything over really any time period, inside of crypto services are offering 1000% of percent briefly with any managed solution being able to give 10% comfortably, it would be easy to make slightly more enticing accounting and easy for an investor to not be able to discern which tweak is the bad one. Many people also just like high yield investment schemes and plan to get out before the mathematical impossibility rears itself
The first signs of trouble came in April, as Bitcoin was rocketing to a record. Africrypt Chief Operating Officer Ameer Cajee, the elder brother, informed clients that the company was the victim of a hack. He asked them not to report the incident to lawyers and authorities, as it would slow down the recovery process of the missing funds.
and
While South Africa’s Finance Sector Conduct Authority is also looking into Africrypt, it is currently prohibited from launching a formal investigation because crypto assets are not legally considered financial products, according to the regulator’s head of enforcement, Brandon Topham. The police have not yet responded to a request for comment.
$3.6B is 1% of South Africa's GDP. That's a lot of money.
With a population of approximately 60 million people that's an average of R850 (approx. $60) per person in SA at the current exchange rate. Obviously only a small fraction of the population are going to have invested. Even if I guess an improbably high number of 1 million investors the losses are R51000 per person (around $3600). That's more than a month's salary even for those just inside the top 1%, since it only takes $3500 per month to be in the top 1% of earners in SA [1].
South African here, I’m also wondering how they acquired so much Bitcoin.
The figure is slightly inflated as it’s the value at Bitcoin’s high earlier this year, but it’s still a lot.
My theory is lots of international customers as I don’t see our market being big enough, thumb sucking, but I reckon 2/3 of our country earns less than 500USD a month. Maybe their customers are from other African countries, but it feels unlikely to be enough.
Perhaps they had some “whale” clientele from several different countries.
I wouldn’t personally think the “Afri” in their name is particularly meaningful, it’s just a naming thing, but maybe some people treat it differently.
South African here and although not culturally Afrikaans (I only really know English), I wouldn’t see “Afri” targeting them specifically.
If anything it associates it with Africa and Afrikaaners (like most people of European descent here) identify more as European residents of South Africa, rather than as African. To make clear, Caucasians here will refer to themselves as South African, but not as just African. If someone on the internet told me they were African, (and not in a bad way) I would assume they are of dark colour.
> [...]Afrikaaners (like most people of European descent here) identify more as European residents of South Africa
As someone who used to cross the "Boerewors curtain" daily, interacting with people on both sides, I think you're severely understating how distinct the Afrikaaner identity is, and how (most) Afrikaaners see themselves as having a different heritage from other people of "European descent".
> If someone on the internet told me they were African, (and not in a bad way) I would assume they are of dark colour.
Maybe that's because the former government (that one) used "African" as a race, an not as a geography-based identity: one could be "White", "Colored", "Asian" or "African"
It’s questionable whether all of it is South African money. Not sure whether this pay walled article mentions it but there is suspicion of it being a money laundering op. The scale just doesn’t make sense for straight SA retail money
It's a question of how much effort someone wants to put in and how much information they can gather: you can trace all of the transactions in and out, and you can try to get information the operators or other parties involved. Since the goal of the crooks is to spend that money, simply looking at high volumes going from tumblers to exchanges would make it hard to conceal that much money unless they're willing to sit on it for a long time.
Someone laundering a small amount of money probably won't get that much effort but $3.6B is a much harder problem because it's an unusually amount of money to launder and it's enough to get law enforcement involved. It's not inconceivable to image _everyone_ receiving bitcoin traceable back to the tumbler being asked to prove that they weren't involved. That factor limits the total volume going through a tumbler and increases the cost since everyone using it is risking being targeted as an accessory.
I've liked Bitcoin for a while now, but have always found tumblers scary.
Seems like many users are tumbling their personal-use-quantity drug bitcoins for bitcoins from crimes with much more LEO/regulatory oversight - like money laundering (and increasingly ransomware).
I wonder how many people have gotten a knock on the door by the Secret Service and found their risk mitigation strategy actually painted a bigger target on their backs.
I think of it as basically the same problem as running a Tor exit node: you're basically taking on the risk of whoever committed the greatest crime using that system, with the knowledge that the more successful you are at making the service work the more likely it is that someone sketchy is going to send traffic your way because it's cheaper / more reliable than the alternatives.
Even if you love the concept and want to see it succeed, that's a big deterrent unless you love litigation and are confident that it won't be a SWAT raid.
It is ironic that you can use your money electronically without a middle man with cryptocurrency, but people choose to leave it with a middle man regardless.
Not ironic, because nobody that has serious money in BTC cares about using it as a currency. It's a get-rich-quick scheme for regular people, and a way to launder money for everybody else. In both cases, you need a middleman.
Plenty of people with “serious money” use their cryptocurrency - be it as a currency or for whatever other purpose it was designed. In fact, they probably use it more than the average person since many of them made it from being a crypto developer.
In any case, there’s a big difference between “needing a middleman” to do something and leaving your funds with a middleman indefinitely. That’s like needing to use a taxi and paying with cash versus leaving your life savings with the taxi person so some day when you maybe want to use a taxi it’ll be easier.
The point is that you don't need a bank/exchange/middleman with bitcoin. You just need the wallet key and password. Bitcoin can be stored on a post-it note.
It would be very nice if the thieves are kind-hearted, gentle people themselves. On account of they have enough money to fund a militia and invade a small country now.
Yep! I might have been a little pedantic. I've been running a content blocker + PiHole for a while now with decent results. I really wish that there was a system wide content blocker without requiring a jailbreak.
I hear great things about IOS, but whenever I've tried to help my father use his iPhone I have been astounded by how terrible every aspect of it really is. Clearly I am doing something wrong.
It's fairly recent. He bought it because an audiologist thought (mistakenly) that it was required for a new hearing aid. I know that I can't expect all the useful standardized gestures of Android to work, but this iPhone seems to have no gestures at all. The only way we've figured out to reach the settings (hearing aids seem to constantly require fiddling with settings, but that's because hearing aid manufacturers don't value software and it's not the fault of IOS) is finding the one settings icon on the several pages stuffed full of icons. Then one is faced with a list of about 75 items, and you have to remember which item has the subitem you're looking for. Everything I need to change on Android settings is a pull-down from the top, and one or two more clicks. If one needs to go back to an earlier menu, there is a "< back to" link somewhere on the page, but it's tiny, always in a slightly different spot, and on Android there is always a large button for that purpose at the very bottom of the screen.
I'm braving the onslaught of HN downvotes because I really hope that someone will suggest a solution to my problem. I really want to help my father use his iPhone.
Your experience is honestly exactly how I felt trying to help my mother with her Android a couple weeks ago.
No idea what the official settings looks like or where I would find what I wanted. No idea what the quickest ways to navigate the ui are. Just pages and pages of icons to scroll through. Multiple of which were called some variant of “settings”. Many of which were dodgy phone tuning apps she’d downloaded then Android and her phones manufacturer both had their own.
It’s not an iPhone or Android thing it’s an unfamiliar phone messed with by a tech illiterate thing.
FYI fastest way to get to settings or anything on iOS is to pull down in the middle of the screen. A search bar will come up and by the time you’ve typed “se” in to it settings should be the first result.
Works for contacts, calendar appointments, etc as well. It’s a solid choice for first thing you try when looking for basically anything.
There are a few things you can try -- hopefully one of these helps. It's definitely less intuitive than is ideal.
If you're on any of the Home Screens (icons), you can swipe down in the middle of the screen to pull up Search, which you can use to more quickly get to settings rather than trying to scroll though apps to find it. Alternatively, you can put the Settings icon in the "app tray" that's on every Home Screen, rather than whatever the defaults are.
Settings also has a semi-hidden search mode, which you can get to if you swipe down in Settings (scroll all the way to the top).
Finally, "Control Center" has a Hearing control you can add -- I'm not sure if this integrates with the hearing aids, but it might let you have a much faster way to get to the specific settings if that's compatible.
My bosses at work are all old folks who use iPhones and they always come to me for help with this and that.
Their problems always boil down to the fact that all app settings can only be accessed by going into the system settings, scrolling through all of them to find the app you want and taking it from there. To make it worse, sometimes an app setting will be hidden away under another nested system setting and there's no way to know this without googling.
So frustrating. I see the "user friendliness" of IOS touted all the time but IMO, functionality is so well hidden from the user that they end up accepting and settling for Apple defaults.
The only advise I can give you is to teach your father how to use google to find out how to do stuff on his phone when he gets stuck.
I've never used this (little need), but a search for "ios shortcut to settings" turns up a howtogeek article on how to use MacStories' list of preference URLs to create an ios shortcut directly to many areas of settings. May make for a simple quality of life improvement.
Edit: this does not appear to be as simple as I'd hope on ios 14.
Edit2: it is that simple if you follow the directions (set URL) Then second step (open URL) instead of winging it like a 1337 programmy dude.
If you know exactly what settings you need to access, pull down from the top on your home screen and search for that setting. No need to remember a series of steps.
I'm guessing since it's a hearing device, it should be a simple pull down and search for "MFi hearing device" or "Hearing Devices" which will instantly take you to that settings.
That said, learning how to find the exact settings the first time around is going to require a learning curve.
iOS has gotten less intuitive over the years. It can do everything you're having trouble with, though. There's a quick settings menu that's pretty similar to the one in Android. You can get to it by pulling down from the top right corner of the screen. It's customizable with whatever settings you want [0]. There are a few other gestures; you might find this page helpful [1].
The back buttons should always be in the top left when they're available. There is also a gesture; you can swipe in from the left side of the screen to go back. There's an accessibility setting to make the buttons underlined, too [2].
I disagree. I've had extensive experience with both and ended up settling with IOS because of the "privacy", and longevity. Might have gotten better since my last experiences with android, but I'm still rocking an iPhone 8 which does more than enough for my needs, and my wife is still using an iPhone 6s which they announced will be getting the latest upgrade this year (7 years old now).
I know you can mess around with custom ROMs and all that to get more life out of Android phones, but now that I work full time I just don't really have the patience to be constantly tweaking things to have my phone work pretty well. It's actually kind of weird that I'm in this position because I used to be all about customization and huge into the Jailbreak/Rooting scenes.
I think it's the same thing as people who say that Amazon has low prices. They have no objective basis for judgement, and are just repeating what they've heard.
Any recommendation of a bitcoin wallet for a Chromebook?
Somebody close to me put some money on bitcoins. I told him to get a wallet and move the coins to the wallet where he is in control of they keys. This person only has a Chromebook as a computer.
Does anybody have any recommendations of a software wallet for a Chromebook?
I just bought a Ledger Nano X after being out of the crypto game for a while and I like it a lot so far. Very nice that it's able to communicate with my phone over bluetooth and so don't have to plug it in every time like with the Ledger Nano S.
