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The Crypto has no greed problem

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Hacking, rug pulls, VC bankruptcies, and founders running away with their luxury cruises are just a few that you see in Hollywood movies but occur in the crypto world. Many people blame people’s greed in the crypto market and believe the government should regulate people’s greed. Does that actually work?

A free market with greed

Some said the free market is a wild west because people are full of greed. That is why we need regulations to punish those people. They are criminals. Wait a minute. You probably believe this statement is 100% true. 

To justify such a statement, the government has a right to set up an entity to oversee the activity. That is why the central bank (The Fed) was founded after the 1929 financial crisis to prevent a bank run.

If you only focus on the single event of 1929, it is correct that the central bank was needed. But, a history is a continuance event. Therefore, you cannot single out one occasion to prove your statement is accurate. History continued, and the Americans experienced far worse than the 1929 financial crisis – the Great Depression. Who created it?! Hint: the Federal Reserve.

Why Financial Crisis is Healthy

When the market is excellent, every business is a sound business. However, there is no perfect life to make everyone happy. The financial crisis is a natural process to screen out bad business ideas. The government wanted to make everyone happy and started to intervene in the financial crisis. However, lousy businesses survived and controlled the market sector, believing they were doing great. They pushed out competitors who would take risks to innovate and sacrifice the future of the growth to exchange for the current market booming. The longer the government intervention, the waste the economy will generate to offer of making everyone happy. Ultimately, the government will carry large debts to make everyone happy, and the economy will not grow to provide a better living standard for future generations. Instead, it will bring the entire nation’s living standard backward.

Business is about monopoly

There is no way for businesses to become profitable unless they are a monopoly and dominate the market. For example, Google is a monopoly. However, even though people knew, they did not refer to them as a monopoly because everyone relies on Google daily. Without Google, one day, someone may not survive. The modern monopoly’s success is because they discovered a secret – innovation. We all believed monopoly could not innovate in the past, but the modern monopoly has cracked the code and become unstoppable.

Government Business Partners

When monopolies can innovate, they grow bigger and more powerful. So they can replace the government eventually. So the government needs to partner with them rather than break them apart. That is what we are currently living under. The big tech companies will grow more powerful and unstoppable. So the government will grow together. And here is where greed comes into play. Both business and government are business partners. They are more greedy than ever, and no way they punish each other. Sorry, no more financial crisis – no more opportunities to change if you are poor in the first place.

Crypto gives you opportunities

If the government will not punish the greed of their business partners, why the government bothers to punish crypto greed -because crypto offers opportunities to change? 

Change becomes very scary for the government and its business partners. Monopolies innovate to prevent changes, and the government protects the market without potential changes. Only the crypto can bring the change.

So, next time people argue that crypto is greedy, you should correct them, and that crypto is about change!

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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. 

If you enjoy reading my articles, buy me a coffee here.

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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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