I assume most of the HN readers are from USA and I can't believe my eyes what I'm reading here. People cheering a government's ban on what its citizens can do with their lawfully earned money.
I worked for my money, I paid huge amounts of taxes on them. Why is it ok for somebody to come and tell me what I can and can't do with them, and then telling me it's in my best interest to not be allowed to invest them.
> People cheering a government's ban on what its citizens can do with their lawfully earned money.
Are you okay with laws about how money is earned? Why? If yes, why are you not okay with laws about how money is spent?
There are a vast number of regulations imposed on how you spend your money is spent in any government. Do you categorically disagree with them or are you okay with some of them?
EDIT: Every time a thread pops up like this, Hacker News seems to decide it's time to reinvent socioeconomic policy from first principles. Often libertarian principles. I'm trying to inject basic questions in here because much of the comment-response activity in the thread seems to be reactionary debating without substantive proof or rebuttal.
Outrage is fine! Your opinions are (probably) fine! But please try not to use personal opinions as axioms. Deconstruct your reasoning just a bit folks.
The principle is pretty simple, if it's two consenting adults doing something that does not impact a third person rights, they should be allowed to do it.
So I would be okay with laws about how money is earned, if there's a third person being impacted (pollution, for example), and i am okay with laws about how money is spent if there's a third person being impacted (idk, hiring a assassin)
Of course when one of the two consenting parties does something outside of the contract (false advertising, fraud, etc.), it should also be unlawful.
Everything else someone does to limit my choices/actions I do disagree.
Do you agree that certain activities that don't directly impact specific individuals can introduce risk for other people in general? If so, how do you feel about laws designed to limit your ability to take part in those activities?
When i go to the bank, i may be participating in bank run, and i may the reason the bank collapses, and then the economy. My action of going to the bank does not usually causes that. But if you attempt to ban me from going to the bank because i may cause a bank collapse, it will certainly cause more harm then good.
And that's how we should look at the problem. The reason i have a principle that people should not interfere with my freedom to do as i chose (as long as i don't harm others), is because i believe that it will provide the best outcome possible, not the other way around.
That does not mean that there's no law that prevents two people of making a voluntary transaction that can give a better outcome than everything open. But it's just impossible to really know. The same reason your questions are hard to answer, if i disregard the principle, it will be hard to make such laws. So someone has to decide what becomes law, and what does not, and when that happens, those law will be imperfect, and you will have people who will benefit from some laws, and some who will be harmed. People harmed will not care so much for this imperfect and unfair system, and might as well ignore such (or other laws). People will also have incentives to make such laws, as they can benefit from it.
And you will never get a general agreement that such law will really do more harm than good, because people will have different views of that, rightly so. The law that prevents me from investing, may protect me from a bad decision, but will also prevent me from a good one. But as i am able to decide to get out of my house every day, and risk losing my life on a car accident, i should be able to decide what to do with what is mine. Even if some protection does look nice on paper, i do not believe i need to be protect from myself in a way that will limit my choices. If someone wants their choices be limited, just make it optional, and I will be able to decide if the protection is good or not. I doubt most people will really care about what people in the government think it is the right choice.
LOL its like asking victim to prove why attacker should not attack him. The onus is NOT on victim but the attacker. Its the attacker who made the first contact. Its the attacker who has to prove from the mutually agreed upon set of axioms.
You just asked an individual to justify why its not okey for govt/people to interfere between two consenting adults.
But then I think the debate would turn into battle of axioms which is pointless.
The question should be, can/how would people with contradictory political axioms co-exist ? I think its not possible, people can only vote with feet and hope for best. Political debate is not an intellectual debate like scientific/programming debate but war with real losses and HN now is a battlefield.
Ah, I understand. I disagree with the analogy then. If the two consenting adults are not harming each other they can still be a liability to other people. Risk can be introduced indirectly even if no individual is directly harmed. How can you adjust your analogy to account for that?
What I'm seeing is the classic regulation vs. non debate.
What's missing is recognition of the historical precedent of regulating what people can/cannot do with their money in the USA and China's proposed plans to follow suit.
Before the JOBS Act, for 70+ years the American Securities and Exchange Commission was very specific about what non-accredited investors could do with their money. [0]
While China does not have an "accredited investor" status, its version of the SEC put forth a proposal in 2014 that would create accredited investor regulations almost exactly in line with the American SEC's regulations. [1]
Intent may be worth looking at here.
China sites terrorist financing and money laundering as problems with ICO's. I don't know the veracity of that concern, but I do know that citing terrorism, child pornography, prostitution/human trafficking, etc. are nearly impossible to argue against and thus can be used as a means to pass regulations/legislation that is rife for abuse (see the USA Patriot Act).
On the other hand, China banned exchanges allowing people to buy bitcoin in Yuan back in 2013, but today support for buying bitcoin has returned (from the article).
It seems both China and America (via the SEC) are trying to figure out what to do with ICOs. Regulation seems inevitable, but each country has thus far taken a different tact.
Does any of this make regulating/banning ICOs right or wrong? I don't know, but that seems like a different debate.
Because when the whole system collapses due to gigantic bubbles explodind (caused by the lesser financially educated masses) the government will likely use your tax money to keeps thing afloat and you won't like that either. Your money only has value in an economically stable context.
First off, bubbles are a side effect of the money cycle which is created by central banking -- both the Dotcom and 2008 bubbles were created by the Fed selling money below cost, building a massive carry trade in, for instance, houses.
Secondly, if there is a crash, the best thing to do is nothing. Let the people who invested poorly get wiped out-- it's better for the economy. (There are examples of this too- crashes that happened before the federal reserve which were much worse than the 1929 crash, but which are forgotten to history because they didn't create Great Depressions because there was no Federal Reserve to "bail out the system")
The bailouts of 2008 were the worst thing that came out of that. Government shouldn't be bailing out these businesses, especially after those businesses made billions getting below cost money from that same government.
IT's not really economics you're talking about here but the corruption in the system.
Bailouts are part of the game-- thats how they scam us. Bailouts don't protect us (that's the con.)
For an excellent history of money and the last 100 years of bailouts and how this exact same thing has been done dozens of times already-- check out G Edward Griffens "The Creature from Jekyll Island" -- it's a history book about money, but it's anything but dry.
> Let the people who invested poorly get wiped out-- it's better for the economy. (There are examples of this too - crashes that happened before the federal reserve which were much worse than the 1929 crash, but which are forgotten to history because they didn't create Great Depressions
Of course there were panics and corrections before the federal system - as rothbardrand mentioned, they didn't create events as bad as the depression.
The "bonus" you mentioned lasts 3 years, where as the great depression: "started in 1929 and lasted until 1941" (src: https://en.wikipedia.org/wiki/Great_Depression). Note: "The Depression of 1882-85 was not inaugurated by financial disaster or mass panic, but was rather an economic downturn that came about through a protracted and gradual process".
But showing evidence is needless: the federal reserve _necessarily_ aggravates the business cycle by promoting mal-investment. This was Murray Rothbard's mentor Ludwig von Mises' great work "Human Action" (https://en.wikipedia.org/wiki/Human_Action), specifically Chapter XX section 8, "The Monetary or Circulation Credit Theory of the Trade Cycle" - (full text is online here: https://mises.org/library/human-action-0/html/pp/818). One of the key tenants of Austrian economics and in particular the work of von Mises is that it is deductive from pure logic, rather than from experimental or statistical observations. Austrian economics is more akin to biology than psychology.
The Panic of 1837 was a financial crisis in the United States that touched off a major recession that lasted until 1843---6 years.
The Panic of 1873 was a financial crisis that triggered a depression in Europe and North America that lasted from 1873 until 1879 (1897 (!) in Britain)---6 years.
The 1882-1885 depression included a year when "an estimated 5% of all American factories and mines completely shuttered during the 12 months running from July 1, 1884, to July 1, 1885".
The panic of 1893 included a depression that extended to 1897, a couple of years with 12-14% unemployment, with peaks somewhere around 17-19% and 25% in Pennsylvania, 35% in New York, and 43% in Michigan, and included the panic of 1896.
Keep in mind two things: these occurred in the 19th century, when the United States was largely, perhaps almost completely an agrarian country, and that when banks fail (a common occurrence in many of these), you don't get your money back out.
The Great Depression is called that because it was the biggest, but it was hardly a completely new and unique thing.
[Now, as to Austrian economics, if "it is deductive from pure logic, rather than from experimental or statistical observations", I would think it had more in common with mathematics than either biology or psychology. Or perhaps alchemy.]
Right, to reiterate, we're saying there _were of course_ business cycles before the federal reserve, just like there was _of course_ monetary intervention then as well.
The OP and I are saying that the federal reserve _exaggerated_ the depression. Your pointing to much smaller prior events is a non-starter.
And yes, biology is not free of observation, my point was that it is more closely associated with deduction rather than statistical inference - but yes, mathematics would be even closer an analog - if I had said that a mathematician would have argued that some economists use statistical inference - goes on ad nauseum.
Still not sure what you're trying to say, but yes, there was a business cycle before a necessarily large increase in mal-investment and there were necessarily larger cycles after said investment.
Hmm... bubbles can also happen without central banking - think the original tulip bubble for example. Also not all bailouts are bad, for example the auto bailout was estimated to have saved ~380k jobs. And it wasn't the auto industry's fault the banking system went wonky. The system may not be perfect but it's not all bad.
> First off, bubbles are a side effect of the money cycle which is created by central banking -- both the Dotcom and 2008 bubbles were created by the Fed selling money below cost, building a massive carry trade in, for instance, houses.
I agree, though I think at the root it's created by people investing irrationally and the wisdom of crowds that comes with it. Part of that can be mitigated by good regulation.
> Secondly, if there is a crash, the best thing to do is nothing. Let the people who invested poorly get wiped out-- it's better for the economy.
This is quite a harsh and risky thing to say. It is the fair solution, however sentiment and trust plays a big role in economics. If big(ger) banks had failed back then it would have been much worse for everyone.
> Bailouts are part of the game-- thats how they scam us. Bailouts don't protect us (that's the con.)
I think the scam actually happens through the years prior to the bailout, when institutions close their eyes to the bubbling up of the economy. Once the crash moment is reached there is not much left to do.
Thanks for the book reference, I have a very long flight tomorrow and I was actually looking for some books!
I partly agree with you. Banning ICOs will affect lots of potential disruptive and genuine initiatives. Albeit, it also safeguards the people's hard earned money, which majority of them are going to lose out on.
IMO, education and liable regulations for the benefit of both the parties is a much better option, but to speak in favour of a governing body, is a lot more tedious.
Reductio ad absurdum seems to be the statists' argument of choice.
While all but the most radical libertarians will concede that some level of regulation is required, nearly every collectivist I talk to implies that permitting any level of individual human agency would turn the world into a Mad Max hellscape.
Oh yeah, the war on drugs and minority encarceration that has resulted is totally the sort of successful government approach we want to emulate and apply to other sectors. (sarcasm)
You're intelligent and thus should be free. But the law can't create multiple classes of people with different sets of rights, so to protect the stupid, who can't handle that amount of freedom, your rights need to be limited as well.
^ I assume this is how supporters of such laws think about the issue.
Ah, so protecting people from scams is now banning people from their own decisions?
I suppose we should drop all laws about fraud really, why should we ban people from freely transacting with "microsoft" support services who just want to help them with their computer?
But banning them from participating in an entire class of financial transactions is not just protecting them from scams. There are token sales that are not scams. It's prohibiting them from entering into legitimate investments that simply don't have government approval (e.g. a securities sale that doesn't ask them for their ID, and thus doesn't meet securities regulations).
At this point there are enough scams to make people cheer for the ban.
Perhaps a better answer would be regulation in a similar way to more traditional IPOs.
>> an securities sale that doesn't ask them for their ID, and thus doesn't meet securities regulations
Perhaps it's just not a good idea to have such a thing?
Or perhaps the seller side of the equation, where you can't run an ICO without being registered and regulated, is needed.
I know, this circumscribes some of the allure of the whole area - that it's free of regulation, that it democratises finance etc etc. But like other avenues in life, perhaps we are being shown why the regulations exists in meatspace in the first place.
BTW I'm not trying to argue that all regulations and government actions are correct and useful, I'm very sympathetic to the idea that we are over-governed and over-regulated, in lots of ways. But perhaps not here.
People support all sorts of things that reduce rights. Doesn't make it okay..
>>Perhaps it's just not a good idea to have such a thing? Or perhaps the seller side of the equation, where you can't run an ICO without being registered and regulated, is needed.
I don't believe we should be limiting other people's right to privacy and to exchange digital tokens (not guns or tanks) under any circumstance.
I think accepting the right of society to impose these limitations on individuals is accepting servility for everyone, and I find that enormously dangerous and harmful.
Cryptocurrency is something people choose to go into knowing it's resistant to regulation by design. If they want to avoid the risks associated with fewer regulations, they can remain in the traditional financial market. But yes we've reached an empasse. We fundamentally don't relate on the issue of a third party essentially dictating to an individual what risks they may subject themselves to.
I think we'll begin to find out how regulation-resistant it is over the next few years...
And no, we don't relate on that, and we disagree that the effect is limited to the individual (see "the Great Depression, causes of") or that the individual should have to bear all risk of their actions at all times. Fundamentally I suspect we disagree on what sort of society we want to live in.
It may be regulation resistant or it may prove to not be. But the point is people go into it with the expectation that it is designed to try to achieve this property, and they're free to avoid any perceived risks of a regulation resistant industry by remaining in the traditional financial market. This greatly reduces the moral justification of imposing regulations on this space.
We also disagree on the economic causes of events like the Great Depression.
Also I did mention we could bring back an option to voluntarily cede one's own freedom, for those that don't want to bear the responsibility of living with the consequences of their own bad decisions, so I don't think our disagreement is exactly how you've characterised it. It's more like we disagree on whether we should prevent people from having the option to live freely.
Make decisions for your own life? I would hope we could at least agree on the definition of common words and this wouldn't become a definition wack-a-mole.
I think that's both naive and wishful thinking. Like a BSD vs GPL argument, one can have many definitions of what constitutes freedom.
Is BSD more free because it places no restrictions, or is the GPL more free because it guarantees freedom to those further on in the chain?
I'm not going to attempt an answer because it's the stuff of decades of internet flamewars. Similarly I don't think that libertarian freedoms are necessarily the only definitions, particularly as they seem to enshrine ownership of land and property as absolute, which come at a cost to the freedoms of others to make use of land or possessions. (I'm not looking for a debate on why that may or may not be right or wrong, simply to establish that what makes someone or something the most free is not 100% clear cut)
So no, we can't really agree on a definition of free or freely.
I think if you ask 10 people on the street which definition of freedom is correct, all 10 of them would agree with mine. But in any case, you know what I mean by 'freedom'. I've given enough context to make that clear. My conception of freedom, by any other name, would still be my conception of freedom. What word you want to assign to is immaterial to the essence of my point.
I don't feel this discussion can proceed constructively anymore.
Maybe, maybe not. You certainly frame your definition as if you believe it to be the only one. I believe that libertarians often frame their arguments as concerning freedom, as we in the west tend to believe freedom is unequivocally the best thing. It's the hidden assumptions and definitions about freedom as defined in libertarian thought which I find interesting, and biased.
Sure, now looking at property rights where it comes to land, if I want to set up house in your wheat field, and you stop me, are you not impinging on my freedom?
This whole discussion would be much easier with an example.
I have spent quite a lot of time debating cryptocurrencies with people and explaining why they could be useful. But with ICOs I find myself on the other side of the fence. I have yet to find a white paper that isn't either useless or impossible.
> and thus doesn't meet securities regulations
In this context "doesn't meet regulations" more often than not means "we lie about what we will use the money for". I'm not sure that's a good idea.
It is impossible to be serious in a space dominated by liars as they will outcompete you every time.
BAT and FunFair are neither impossible nor useless.
>I'm not sure that's a good idea.
But if someone thinks it's a good idea, we should forcibly deny them the right to invest their own money in it? I simply don't understand the justification for such a strong-arming intrusion.
>It is impossible to be serious in a space dominated by liars as they will outcompete you every time.
Reputation is a very real and powerful thing in the marketplace. In the long run scammers and other unscrupulous types cannot compete against honest providers who deliver. And by the way, I'm fine with going after confirmed scammers. I'm not okay with centralizing/banning an industry to preemptively prevent scams.
The cryptocurrency market is incredibly resilient. I've been involved in it for years and seen that even after the worst crises, it comes back stronger. Absent centralizing regulations, eventually all of the industries created by the new use-cases it enables will mature, with innovative technological solutions and much higher levels of consumer awareness, which is a much more robust outcome than the regulatory one that would devolve into a closed Old Boys/Girls club like the traditional financial sector.
OK so I got about two thirds of the way through that before my brain rebelled and my focus went elsewhere.
Thanks for the link though, that was an interesting read. I was aware that "Caveat Emptor" was a bit of a libertarian tenet, and that people like to rely on things like reputation to enforce good trading practice, but that is an interesting explanation of why a libertarian may be against any and all government interference in even blatant fraud.
I just mean there will be additional costs to the state if it means more people survive car crashes and therefore need medical care. But those costs might be outweighed if longer-term survivors tend to have less severe injuries.
This is much welcome ruling and US should follow suit. Current modus operandi is of pump and dump to lure unsuspecting people. Some ICOs are borderline scams. Using Facebook ads to promise the riches. It's almost disgusting
Yeah well there's also shitty companies which are publicly traded, I'm supposed to make my own choice here aren't I? Isn't that the point of investing?
So current situation is like using Google and Facebook ads (literally) to raise money. Exchanges on which these ICOs are traded are not regulated. So volume can be fake and likely is. Furthermore money could be coming from anywhere. It could be money laundering simply. So it's not as simple as government is stopping me from burning my money
Because the first dozen ICOs that turn out to be scams can break consumer confidence across the whole market. When people stop trusting, the system collapses.
This isn't hardship, just put your money somewhere else.
> The reason ICOs were such a boon is that there has been no other path for the middle class to invest in startups.
You know what they say about forgetting history...
The middle classes (or lower class) aren't really allowed to invest in business because it's really risky (see: Great Depression). When 1 rich person loses $1 billion, that's sad. When 100000 grandpas lose $10000, that's a national tragedy.
Anarchy is not a lot of fun. it usually ends up in pure might makes right. North Korea is a timely example of what the philosophy of might makes right leads us to.
Are you saying that North Korea is an example of what happens when individualism runs amok?
On the contrary, North Korea seems like a collectivist's paradise. Total state control with omnipresent regulation. I wonder what the punishment for trading cryptocurrencies looks like there.
I'm from the US and I'm not a Neocon... I don't cheer any bans.
Not all of us are like that... What's happening here is people are butthurt cause ICOs are more successful and friendly to funders, so they took a very bad deal with the traditional investment route so everything negative against ICOs they are happy.
The HN community just like Reddit is just a bunch of children.
I worked for my money, I paid huge amounts of taxes on them. Why is it ok for somebody to come and tell me what I can and can't do with them, and then telling me it's in my best interest to not be allowed to invest them.