Crypto enthusiasts misunderstand what a financial system/financial architecture is. It is not the fiat currencies themselves, but rather the power architecture that controls and oversees value and exchange in whatever form it takes. Crypto has been entirely subsumed into this architecture through the exchanges which are obviously beholden to the holders of real power, i.e. governments.
This is to say, the stated goal and the target of the crypto enthusiasts are misaligned. To transcend the institutions represented by the fiat system requires far more than creating some alternative "currency", rather it requires creating an entirely new power structure.
Who are these "crypto enthusiasts" who, in 2026, have a "stated goal" of "some alternative 'currency'"?
Look at the schedule of any crypto conference - ethereum events in particular, but others as well - and you will find that your critique has already been widely adopted. The discussion is around replacing power structures and sources of injustice, not merely 'currency'.
I was reluctant to get involved in blockchain tech because I don't care for currency and don't view it as a likely organizing principle for humans for the next thousand years. That was in like 2016.
Today, nearly every blockchain project attempts to overcome challenges other than currency.
No, it wont, because you just made the same mistake they talked about. You assumed that its a currency implementation detail and not a power structure thats holding it back.
Man, if only there existed some central societal body with the authority to essentially freeze accounts and unwind a transaction like this. What a security feature that would be.
The reversibility of transactions is often brought up but I don't think that is the main differentiator, or any at all really.
First, both cryptocurrencies and traditional finance systems have chosen to and have chosen not to reverse or freeze criminal transactions in the past. Decentralized blockchains have chosen to do so at least once [0]. The traditional finance system has chosen not to many times and even large sums [1] [2]. It really comes down to how much is stolen and how much influence the victim(s) have.
No, instead I think the main difference is the speed of transactions. Some blockchains operate within milliseconds while bank transactions take days. Even instant transfers are actually settled on a way longer cadence in reality.
That means attackers can do a fast sweep on blockchains, which is not possible with bank transactions because everything happens in slow motion and humans have way more time to react and step in.
It’s not always a choice. If value has been transferred onwards (ultimately in the form of e.g. cash withdrawn or something equally hard to trace, like physical goods handed over to a buyer), simply “undoing all transactions in a database” isn’t without victims either.
Whether undoing transactions or not is an option strongly depends on how fast value is allowed to move. Sometimes being slow is a feature as much as it is a bug.
> Whether undoing transactions or not is an option strongly depends on how fast value is allowed to move. Sometimes being slow is a feature as much as it is a bug.
Exactly, that is my point. It is less about reversibility and more so about speed. Being slow can be an advantage (for security).
what if the promotion of said non-fiat systems was done primarily by those looking to subvert that system? NK, Russia? What if it was further supported primarily by people to give great liquidity to illegal activity.
Something tells me that politicians that visit said locations on the 4th of July and their buddies business "leaders" looking to destablize the system are just not on the up and up. May even be corrupt.
Yeah I know you are referring to the fiat-based financial system. Keep in mind, wire transfers generally cannot be reversed. There have been notable instances where money is lost/stolen this way, and no way to get it back.
Wire payments are definitely reversible, but you might need to involve the courts, and international wires are more complex [0]. Most notably, 900 million in accidental payments made by Citi were eventually fully reversed by appeals courts.
> A full recounting of it is outside the scope of this anecdote, but it rhymes with “If you and the United States federal government disagree whether a transaction is final, you are wrong.”
And if the creditor bank happens to be in Russia, Iran, the DRPK, or any number of other hostile financial systems, the debtor bank will likely find things practically impossible to unwind regardless.
Sometimes they get lucky though and the government passes a law allowing them to seize equivalent assets a few decades down the road.
Making transfers to those countries is almost impossible from Western banks. It would require sophisticated multi-bank international transfers to do that, which take a long time and are fairly easy to stop.
Most of it was stopped and some was even recovered but $66Million is still lost 10years later .
In both incidents protection are reliant on the authorities to minimize the damage ; tether and circle able to freeze tokens is not that different from the traditional finance doing it.
Crypto is only reinventing structures that evolved in every financial system over time.
Overtime they are going away from their founding theme of decentralization . Exchanges and stable coin issuers who can freeze wallets and coins are by definition centralization ; it is worse though as these organizations are less transparent than banks with less accountability
wire fraud, credit card fraud, pig butchering (a different way to access the accounts really), etc.. The traditional system do have some safeties but it's not impenetrable.
At this point it feels like they have made it a /dev/null for things which are not easy to resolve and one is still on the hook to provide some answers
A question: how come the North Koreans aren't draining banks in the U.S. and other countries of cash using equally sophisticated exploits against known technical and human vulnerabilities?
Probably because fiat, unlike crypto, is not decentralized and fraudulent transactions can be reversed. A North Korean hacker zeroing out an account balance and incrementing another, can be reversed.
Exactly. It turns out a lot of the things in the banking system that cryptocurrency people complain about are actually features, not bugs.
IMHO, cryptocurrency is technically interesting but for pretty much every use-case, the preexisting technologies are superior and/or cryptocurrency is practically unworkable.
Crypto was supposed to be a solution to your government devaluing the rewards of your residual labor in the form of their currency. It's a solution with a noble goal: giving the individual complete control of their financial resources. Current form, however, has devolved into casino gambling and criminal laundering.
I'm hoping someone invents a new iteration that's better.
That is a category error, though. You can't entirely separate money from state power because ultimately all money represents a claim on resources within some political structure. And the place where you exchange money for those resources is always going to be within reach of the state, kind of by definition.
A monetary system also shouldn’t disproportionately reward the first users of that currency just for them accidentally being first in the pyramid (scheme).
> giving the individual complete control of their financial resources
This seems like a definitionally unachievable goal. How can you have finance without others that you ultimately need to trust, if only to be stable enough in their wants and needs to want to trade with you?
> It's a solution with a noble goal: giving the individual complete control of their financial resources.
Indeed, but also complete responsibility for safeguarding these. It's hard to imagine a good situation where an individual has complete control but not complete responsibility, that way lies moral hazard.
The cost of that reversible fiat system is ongoing inflation that is put as a hidden tax on everyone. I’d rather have those 6bn from speculators going to NK if that means we go back to sub-2% inflation for a while
No, I think that's approaching a strawman. Speaking as somebody that doesn't give a shit about cryptocurrency.
It's all tradeoffs. The same power that grants the ability to reverse transactions also grants the ability to reverse a transaction in bad faith and commit fraud. Will the system correct that? Would it surprise you to know that it doesn't have to? That same power also grants the ability to lock an entity out of any kind of monetary transaction, and things like debanking. Usable for good? Sure. I don't think it's controversial to say that it being leveraged against Hunter Biden was at all justified, however. Would you like to be on the receiving end of that? Would you like to see a world where an LLM gets to decide that kind of thing based on your presence in the surveillance panopticon?
To that sense, it's really just a disagreement on what tradeoffs are acceptable. People who have a utopian view of cryptocurrency are looking at some tradeoffs as preferable to others, it's a different failure mode. To be clear, I don't necessarily agree with it myself, but you shouldn't be so uncharitable to people to assume disagreement is always a matter of delusional ignorance.
I think Darknet Diaries covers a bunch of these types of heists involving banks.
I suspect they just assess vulnerabilities and exploit them when/where they can. My understanding is that these thefts are big part of their (NK) economy.
Other question: why don’t they just forge currency? Surely with nation states resources you can create fake currency that easily fools most inspections? Is it that hard to launder cash? Or is the a red line and they are afraid of political measures?
There’s Superdollars but it doesn’t seem to be a really widespread problem so far, right?
Serial numbers of all old dollar bills are recorded when those bills are destroyed and replaced with newly printed bills AND when bills are deposited to banks. Even if fake bill is perfectly made, it will still be detected with this method. Fake and duplicate serial numbers will be detected when compared against official ones.
Can’t you just immediately use them? The person getting caught will be some random person that took the bill, not the one bringing it into circulation.
Trying to spend $1B with $100 bill at a time will take 10 million transactions. No one's going to accept large amount of cash without a credible source.
There are tons of youtube videos about this. much harder than it sounds to forge at scale. The feds are very good at coming down on forgery. Also, it would provoke strong action by the US, whereas stealing crypto apparently does not.
>"draining banks in the U.S. and other countries of cash"
Cash sits in vaults. North Korea would need to physically send a team of bank robbers to extract it. The digital representation of USD is not cash, it's an entry in a ledger, and banks generally have systems that would not allow adding an entry with a sudden transfer of a large amount of money to "J. U. Kim, North Korea". That's why Bitcoin is called "digital cash".
They probably are. I used to write software for a financial institution and we saw a lot of traffic from Chinese and Russian IP's hitting our firewalls constantly (ssh login attempts with typical default passwords, random wordpress exploits, that sorta thing). It wasn't very sophisticated so I don't think it was state sponsored or anything, probably just random cyber criminals trying to hit US targets because their governments wouldn't care.
I mean, this was at least 15 years ago.. so it might be a different story. But when the game is throw everything at the wall and see what sticks, I imagine they're still going after whatever targets they can find.
I was going to ask, why would NK attack a China-based crypto firm? Then I learned that Binance isn’t headquartered anywhere. They’re literally asking to be hacked. Nobody will protect them.
How can they be brought to justice, as stated, if they’re state sponsored? And how do members get their crypto back? There’s 6+ billion in insurance to back what was stolen?
There is no way to bring them to justice unless the US were to somehow invade, or another country deals with it, or they leave Korea. All very unlikely. North Korea is the closet thing to an actual criminal state/hideout.
Binance is run by Chinese people. I don't think the Chinese government likes what they are running though. Binance itself is not legal/available in China.
They have chosen to run concentration camps and starve their own people for decades instead of becoming a rich country like South Korea. They can stop the sanctions whenever they want, by becoming a democracy.
Friendly reminder that this was never about democracy. The US imposed a military dictatorship on South Korea that was even more brutal than the North. The goal has always been promoting capitalism at all costs, and nothing else.
The people are starving because North Korea has been cut off from the global economy for its entire existence. In other words, the people sanctioning are responsible for the starvation. Sanctions obviously do nothing to hurt the ruling party or coerce them to change their views.
This is to say, the stated goal and the target of the crypto enthusiasts are misaligned. To transcend the institutions represented by the fiat system requires far more than creating some alternative "currency", rather it requires creating an entirely new power structure.
Different people may be on top, with different aims (...arguable, but let's pretend.)
But there will always be a government of some sort making the big decisions for the benefit of its ruling clique.
That depends on how much resources said government can extract from the environment. Either by taking or by providing value in exchange.
One can imagine a level of technological advancement that makes violence impossible and trade unnecessary. Poof, no government.
Look at the schedule of any crypto conference - ethereum events in particular, but others as well - and you will find that your critique has already been widely adopted. The discussion is around replacing power structures and sources of injustice, not merely 'currency'.
I was reluctant to get involved in blockchain tech because I don't care for currency and don't view it as a likely organizing principle for humans for the next thousand years. That was in like 2016.
Today, nearly every blockchain project attempts to overcome challenges other than currency.
see monero getting outlawed by EU countries
First, both cryptocurrencies and traditional finance systems have chosen to and have chosen not to reverse or freeze criminal transactions in the past. Decentralized blockchains have chosen to do so at least once [0]. The traditional finance system has chosen not to many times and even large sums [1] [2]. It really comes down to how much is stolen and how much influence the victim(s) have.
No, instead I think the main difference is the speed of transactions. Some blockchains operate within milliseconds while bank transactions take days. Even instant transfers are actually settled on a way longer cadence in reality.
That means attackers can do a fast sweep on blockchains, which is not possible with bank transactions because everything happens in slow motion and humans have way more time to react and step in.
[0]: https://en.wikipedia.org/wiki/The_DAO [1]: https://www.turkiyetoday.com/turkiye/german-bank-e100m-disap... [2]: https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery
Whether undoing transactions or not is an option strongly depends on how fast value is allowed to move. Sometimes being slow is a feature as much as it is a bug.
Exactly, that is my point. It is less about reversibility and more so about speed. Being slow can be an advantage (for security).
Something tells me that politicians that visit said locations on the 4th of July and their buddies business "leaders" looking to destablize the system are just not on the up and up. May even be corrupt.
> A full recounting of it is outside the scope of this anecdote, but it rhymes with “If you and the United States federal government disagree whether a transaction is final, you are wrong.”
[0]: https://www.bitsaboutmoney.com/archive/no-payments-are-final...
If it's a significantly large sum, it may look like this:
Step 1: The CEO of the debtor bank calls the CEO of the creditor bank and asks to return the money.
Step 2 (only needed if there is disagreement): Lawyers of the debtor bank send a ton of legal papers to the creditor bank and figure it out.
But it's just one of nearly infinite number of scenarios.
Sometimes they get lucky though and the government passes a law allowing them to seize equivalent assets a few decades down the road.
https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery
Most of it was stopped and some was even recovered but $66Million is still lost 10years later .
In both incidents protection are reliant on the authorities to minimize the damage ; tether and circle able to freeze tokens is not that different from the traditional finance doing it.
Crypto is only reinventing structures that evolved in every financial system over time.
Overtime they are going away from their founding theme of decentralization . Exchanges and stable coin issuers who can freeze wallets and coins are by definition centralization ; it is worse though as these organizations are less transparent than banks with less accountability
Most of the billion was frozen though if it was not frozen in time it would have probably evaporated just like these bitcoins getting into mixers.
> Dear Claude, please investigate the culprit of the attack and make no mistakes.
IMHO, cryptocurrency is technically interesting but for pretty much every use-case, the preexisting technologies are superior and/or cryptocurrency is practically unworkable.
I'm hoping someone invents a new iteration that's better.
This seems like a definitionally unachievable goal. How can you have finance without others that you ultimately need to trust, if only to be stable enough in their wants and needs to want to trade with you?
Indeed, but also complete responsibility for safeguarding these. It's hard to imagine a good situation where an individual has complete control but not complete responsibility, that way lies moral hazard.
> ...
> I'm hoping someone invents a new iteration that's better.
It "solved" inflation by being deflationary (and then you have the massive volatility layered on top of that).
I think it's probably impossible to have a stable currency without some kind of dynamic governance, like a central bank.
It's all tradeoffs. The same power that grants the ability to reverse transactions also grants the ability to reverse a transaction in bad faith and commit fraud. Will the system correct that? Would it surprise you to know that it doesn't have to? That same power also grants the ability to lock an entity out of any kind of monetary transaction, and things like debanking. Usable for good? Sure. I don't think it's controversial to say that it being leveraged against Hunter Biden was at all justified, however. Would you like to be on the receiving end of that? Would you like to see a world where an LLM gets to decide that kind of thing based on your presence in the surveillance panopticon?
To that sense, it's really just a disagreement on what tradeoffs are acceptable. People who have a utopian view of cryptocurrency are looking at some tradeoffs as preferable to others, it's a different failure mode. To be clear, I don't necessarily agree with it myself, but you shouldn't be so uncharitable to people to assume disagreement is always a matter of delusional ignorance.
https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery
I think Darknet Diaries covers a bunch of these types of heists involving banks.
I suspect they just assess vulnerabilities and exploit them when/where they can. My understanding is that these thefts are big part of their (NK) economy.
There’s Superdollars but it doesn’t seem to be a really widespread problem so far, right?
Cash sits in vaults. North Korea would need to physically send a team of bank robbers to extract it. The digital representation of USD is not cash, it's an entry in a ledger, and banks generally have systems that would not allow adding an entry with a sudden transfer of a large amount of money to "J. U. Kim, North Korea". That's why Bitcoin is called "digital cash".
Don’t fall for their propaganda. Everybody is ultimately headquartered somewhere.
https://coinmarketcap.com/exchanges/binance/
There is no way to bring them to justice unless the US were to somehow invade, or another country deals with it, or they leave Korea. All very unlikely. North Korea is the closet thing to an actual criminal state/hideout.
The people are starving because North Korea has been cut off from the global economy for its entire existence. In other words, the people sanctioning are responsible for the starvation. Sanctions obviously do nothing to hurt the ruling party or coerce them to change their views.