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Crypto Research

Ethics of Crypto

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Is there an Ethics of Crypto in general? Probably not.

As digital currencies have widespread adoption, the financial and social benefits have grown steadily. Now, users of virtual currencies — like people who store their cash online — are also using them to buy and sell goods and services. In other words, the future of finance may be cryptocurrency trading. With that in mind, it’s important to understand the ethics of cryptocurrency. 

People are too distracted by the utility of cryptocurrency and forget about ethical behaviors. So why should we care anyway?

Cryptocurrencies are inherently untrustworthy and should be avoided at all costs

Many people today are unaware that cryptocurrencies can be used as a store of value. This means that people who hold cryptocurrencies can’t be held legally responsible for money being stolen or paid with stolen money. This can lead to banks and other financial institutions charging higher interest rates on loans or even closing the accounts of suspicious individuals. Even if a person holds a specific cryptocurrency, the risk of fraud and the stolen money is great. The same goes for someone trying to sell stolen money. Ensure that the person you’re dealing with is trustworthy and does their job well. Even if you have nothing but time, do your research, and don’t make rash decisions, cryptocurrencies could be very costly to trade. Investors should consider all this in light of whether or not they’re willing to put money in the cryptocurrency market. Is it even worth it to use cryptocurrency rather than the bank regulated by the government just because crypto has some speculative features to win the bank in the short term?

Even if you’re a cryptocurrency investor, you should still moderate your investment

As the power of the blockchain and digital currencies increases, so do the risks. Some of these risks are related to security issues and fraud, while others are related to the market itself. The general consensus is that volatility is a significant downside, particularly for institutional investors and money market managers. While some investment strategies aim to mitigate this volatility by maintaining long-term expectations, many traders are being left behind. A healthy amount of reserves should be kept in cash and other long-term assets to try and withstand spiking demand and price volatility. Some people also try to diversify their investments to avoid becoming too dependent on one basket. By keeping a mix of stocks, bonds, and commodities, this investor can try and avoid becoming too reliant on a single industry.

Cryptocurrency exchanges are rife with malicious intent

Some exchanges are just trying to make money. These exchanges are often led by nefarious characters looking to profit from trading cryptocurrencies with one another. When someone uses a bad or repackaged cryptocurrency on an exchange, the exchange staff can’t guarantee that the trade is legitimate. Some of the most popular exchanges in the world have been around for a long time. Their names elude us, as do the risks associated with using these exchanges. However, it’s important to remember that the industry has been around for a long time, and exchanges are just now becoming targets. But it does not mean exchanges carry out their responsibilities to protect users under any circumstances.

It’s impossible to know what will become of all the decentralized currencies

It’s easy to get excited about the idea of building and using decentralized applications on top of top-echelon blockchain systems. However, as we’ve known, the idea of building a decentralized applications platform is relatively new and unsecured. Decentralized applications are still in their infancy, and they’re still far from being able to scale. Even now, developers manage to build applications that support more than just the blockchain. Decentralized applications can run on any computer that has internet connection and has a tech-savvy assistant. However, because there is no ethics discussion on any of the new technology, there is no comprehensive protections that likely to protect users.

Decentralized platforms offer anonymity

As the number of people attempting to access the internet via mobile device grows, so does the number of activities associated with them. These activities can range from extra commerce and restaurant booking to social media and banking. These apps only provide you with a single source of information — the underlying blockchain. You can’t trust any of these platforms to keep your data secure. You can only assume that they’ll be reliable and prompt in providing the necessary information. 

There is a growing market for services that help users purchase and store virtual currency

There are a number of different ways to purchase and store virtual currency. Some are decentralized, some are through an exchange, and some are through a wallet. While it’s important to have an option that lets you purchase virtual currency with cash, it’s also critical that the option works with high-quality encryption. This is because looking over someone else’s shoulder while they’re trying to carry out a purchase can lead to very sensitive information getting exposed. Some of the most popular wallet companies in the world come with comprehensive Anti-Spoofing technology built into the wallets. This technology prevents any portion of the wallet or blockchain associated with any single user or account from being seen or touched by another user.

The Bottom Line

As the power of the blockchain and digital currencies grows, so do the risks. Some of these risks are related to security issues and fraud, while others are related to the market itself. The general consensus is that volatility is a significant downside, particularly for institutional investors and money market managers. Investors should consider all this in the light of whether or not they’re willing to put money in the cryptocurrency market. As the power of the blockchain and digital currencies grows, so does the risks. Some of these risks are related to security issues and fraud, while others are related to the market itself. The general consensus is that volatility is a significant downside, particularly for institutional investors and money market managers. Investors should consider all this in the light of whether or not they’re willing to put money in the cryptocurrency market. It’s easy to get excited about the idea of building and using a decentralized applications platform on top of top-echelon blockchain systems. However, lack of ethics discussion may drag the technology backward rather than forward thinking.

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Crypto Research

The Future of Machine War II

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In late 2021, I wrote an article about A.I. vs. Blockchain. I realized it was closer than I expected.

https://medium.com/@xuanling11/artificial-intelligence-vs-blockchain-the-future-of-machine-war-b685d208ba20?sk=874af90c7acbe857fa004c0ebe0d5e28

Web2 is leading a future of technological centralism. 

The way we see the world in ancient is what we saw became what we believed. Later, the enlightenment process helped humans realize what they had seen was disguised by the nature principle. Once we tested our assumption and received accurate results, we thought we had mastered the nature principles. Yet, we did not make the world better than we thought we could. 

We are living in a world in which companies know more than you than yourself. Companies can likely tell you what you should believe without letting you know. 

The secret weapon that companies like Google invented is A.I. or Artificial Intelligence. 

If A.I. can think like a person, it can easily replace you! Since companies got all your data, you freely offer them by using their free services, and they can replace you one day without you realizing it. 

Without all conspiracy theories behind what Google may or will secretly develop, A.I. reaching consciousness is … impossible.

If it does, Google has successfully made a human – dumb!

The most advanced A.I. – Tesla Autopilot Program cannot distinguish objects between humans and other moving objects during driving.  

Using technology makes people dumber than they think because it takes away your consciousness – the ability to think uniquely!

Blockchain is the future of decentralization.

We need a peer-to-peer system to regain consciousness and break the chain from Web2. 

It gives individuals the power to rethink information.

Think about today’s media; all information is filtered to offer readers without any surprise. News is data that Web2 selected specifically for you to read. 

We need a decentralized system so that you can receive unfiltered information and gives you a surprise that sparks ideas of imagination.  

Web2 is afraid of the blockchain because they are too big to fail. 

 They mimic the blockchain by creating a centralized node system – social media network. 

It is a net growing outward through a single point. Only the problem is that connection is facilitated by technology. And the biggest failure is such technology has a single point of failure problem. 

And they cannot escape the law of economics – the law of diminishing. So we will see Web2 grow slower due to the law of diminishing that they require more data with few increments of advancement through A.I. without any breakthrough because A.I. is a deterministic system that works with a lack of randomness. 

In Web2, they assumed everyone was stupid, and they offered solutions to everyone.

In Web3, everyone is good and should anticipate solving a problem together.

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Crypto Research

Financial sanction to mixers

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Have you heard about financial sanctions from the US on virtual currency? At least, I have not yet. But the US Department of Treasury has issued sanctions on two crypto services: Blender.io and Tornado Cash.

To clarify, the US sanctions on tools but not target specific entities or groups of people.

So why bother to sanction something that the government probably won’t be able to sanction in the first place?

What is a mixer?

A cryptocurrency mixer, sometimes referred to as a tumbler, is a tool for money laundering. The sole purpose of the invention is to make transactions untraceable.

How to mix?

Even crypto is pseudo-anonymous, but it is traceable through your wallet address. A mixer is a black box service to filter your traceable wallet address into the untraceable wallet address.

How to wash your money clean in the traditional way?

https://dimensiongrc.com/the-stages-of-money-laundering/

The assumption is you will not get caught at each stage, and then you place your dirty money in a bank through companies and use the funds to purchase legal goods like houses or luxury goods.

There are mature regulations and rules to stop you from putting your dirty money into banks.

Digtial money landury

https://www.eurospider.com/en/know-how/compliance/211-what-is-a-cryptocurrency-mixer

A Crypto mixer or tumbler is a service to pool dirty digital currency in their favor and redistribute it into designated wallet addresses or addresses randomly generated. 

It is a challenge to stop transactions because there is no entry point for law enforcement to stop at each stage. 

https://home.treasury.gov/news/press-releases/jy0768

Ultimate Mixer

Tornado Cash is the king of the mixer. Unfortunately, there is just no way to trace transactions anymore. It is a smart contract with zk-SNARKs (zero-knowledge proofs) that does not require revealing a wallet address during transactions and ghostly distributed funds without leaving any traces.

This tool is the ultimate weapon that the government has to shut down, or there is no way to prevent transactions.

In Conclusion

Let’s change the future – legally. 

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Crypto Research

Why there is not crypto banking exist

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We have always heard about cryptocurrencies, crypto exchange, banking, and trading platforms, but we do not really grasp the idea of crypto banking. Crypto banking is a contradicted idea. If crypto is to replace banks and give users full control of digital money, why do you put your crypto into the bank? The new research paper argued that there are risks for banks to adopt crypto, but they did it anyway.

Banks want crypto

Cryptocurrency has a rough road at the beginning and continues to experience a bumpy road ahead. The institutional investors were watching its performance. In early 2017, institutional investors had opportunities to adopt crypto, but they found out the return of the investments was less than traditional financial assets. Regulations were not a concern for some individual institutional owners, but banks were conservative at the time. As a result, some investors adopted it in early 2018 than banks did. Then suddenly, the crypto market took off in 2020, leaving many banks to regret their decision in 2017. Many banks set up their digital investment group to rush into the market and increase prices. Of course, many of their investment positions are instead of shadow positions. It is unclear how much they have been invested in and what vehicles they took to invest in cryptos.

Crypto Exchange

Crypto exchange is a bank-like platform for crypto. Banks offered a place to purchase fiat currency. Crypto exchange did the same duty as traditional banks did. Since there was a gap between the crypto and banks, the crypto exchange took responsibility and offered crypto services. The crypto exchange took off after 2020, and they left banks in the dust. Then, crypto winter came in early 2022, and banks again hesitated to enter the crypto and started denouncing crypto usage, particularly in the Defi area. But interestingly, they tried to find ways to get into crypto without being directly exposed to cryptocurrencies—hint: through hedge funds.

How much banks exposure to crypto

We do not know how much banks have been exposed to crypto. We learned that the big Wall Street players were exposed to the services of the digital asset through State Street of their $41.7 trillion assets. Some have been exposed due to Luna’s collapse and 3AC bankruptcy. But again, no specific dollar amount was provided. 

Survivors

Since the crypto winter, institutional investors have been cautious about crypto exposure. However, crypto exchanges are the winner again. They are exposed to crypto and take risks more than banks do. As a result, they likely will weather the uncertainty. Furthermore, there is no need for crypto banking to handle your crypto assets since many such services will not survive long in the crypto environment. 

Crypto is resilience

Despite its fluctuating price and unsecured assets, crypto is resilient to phase out any bad business ideas and bad actors in the economy who wants to or try to dominate the market but who transfers risks to users to believe they are the one who should take responsibility for their carelessness. Unfortunately, those business models will not survive long.

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