We have reached the "severed fingers and abductions" stage of crypto revolution
119 comments
·May 8, 2025danaos
onion2k
Too many smart people work on these pointless projects instead of useful tech that benefits society.
Hindsight is 20/20. In the early days of crypto the promise of decentralized finance outside of the scrutiny of governments and financial institutions was seen as far from pointless. It only went awry when speculators turned up trying to make a profit from an ostensibly useful idea, and they took it so far that the original idea lost all its meaning so the well-meaning folk left.
jazzyjackson
Bitcoin was invented with a number go up mechanic, and the idea that a single Bitcoin would be immensely valuable were the currency to gain traction was a point of discussion from the start
Fact is it became popular with speculators faster than it did with anybody else, but the hodlers weren't doing anything to stop people from using it to buy pizza.
tromp
The capped emission certainly encourages FOMO and speculation. A fixed block reward would still provide scarcity in the long term while strongly discouraging speculation [1].
Dlemo
The flaws of crypto were clear very early on.
Major issues, still existing, were never solved
noosphr
The surest way to get flamed out of any crypto mailing list was to ask what the effective clearance rate for the coin was, then following it up with how it could be sped up.
Today the bitcoin network is still stuck at ~7 transactions a second.
This is not what the white paper promised.
Gigachad
It only highlighted why all these laws and regulations exist in the first place.
rchaud
The early promise of crypto is not why Coinbase, Binance, Crypto etc have lots of highly paid, highly skilled employees today. They're there because of the money, the same way electrical engineering grads go to Wall Street in droves.
Yizahi
After MtGox the trajectory was pretty clear imo. And when Tethers emerged the whole pyramid was exposed for all to see. It's just pure gambling at this point.
elevaet
I had a similar experience, and also have zero regrets about missing out on gains. The baked-in energy wastage and the scams and memes were a complete turnoff. That's not the way I want to get rich. Similarly I wouldn't invest in an arms manufacturer or a plastic bag company. Money that doesn't align with your values is just bad mojo.
rokkamokka
I'm glad you've made peace with your financial loss. It is an important thing not to dwell on the past in order to be able to move forward, a lesson it took me long to internalize myself.
razakel
Hindsight is always 20/20. You mustn't judge your past decisions based on information you didn't have at the time. That way lies madness.
AndrewKemendo
I had a similar experience and lost I think like one coin to mtgox - thinking nothing of it, it’s on a hard drive in a landfill somewhere.
I think more crucially though is that crypto people just have absolutely zero understanding of the concept of money in a political sense.
Money is not real - it’s a social experience - and the fact is monetary sovereignty is by far the most important thing for any state to maintain.
If bitcoin or any other of the cryptocurrencies were actually useful, they would be immediately outlawed because they would subvert the control the state has over economics
Even if they didn’t or couldn’t make it illegal, they would make it dollar parity, and then tax it such that it just gets absorbed into the local financial system
Fully realized cryptocurrency would destabilize the entire economic system of intermediaries and that’s entirely the purpose of it - per the white paper
So anybody who has an undergraduate or masters degree in economics (me) or rather somebody who had a holistic view of economics in the political and monetary sense - immediately understood that there was a limit to how far this could go before state intervention
The reality is, it never actually took off as a medium of exchange - and so never challenged the domination of the US dollar or any other reserve currency. That itself has proof that it doesn’t actually have the social momentum necessary to do what it intended to do.
tm-guimaraes
Stablecoins are actually the future of remittances, the problem is which stablecoin is safe and has enough adoption. (When a big or central bank decides to have a stablecoin, things will change a lot)
I work in “traditional” (as in, non crypto) payment systems, and i can tell you that plenty of companies are looking into using cryto rails for complex remmitance routes.
The problem is swift network/correspondent/intermediary banking. When you want to send money abroad to badly connected banks of badly connected countries, you might have a big route chain (multiple times intermediaries), fees can be huge , and settlement can take a long time. For these “small” banks it can be extremely hard to get better banking partners for better network (as in banking not IT) connection (multiple reasons, from price to available business partner, and company bandwith to go with the project)
Stable coins are much simper by comparison, you just need a wallet, and you ate a n a global network with automated settlement. Now whats lacking is standardizing how to send a message “ your crypto X received money from our crypto wallet Y, from our customer with acct number yyy, intended to your customer with acct number xxx”
Still some guys send iso message via swift to semd those intents and then settle via crypto.
This is a non existing problem for intra-eu payments due to all eu members being part of TARGET settlement system, and there are pan-EU clearing systems, but as soon as you get to more “disconnected “ countries, or “smaller” banks cross continent, it’s a pain.
hiq
> The problem is swift network/correspondent/intermediary banking. When you want to send money abroad to badly connected banks of badly connected countries, you might have a big route chain (multiple times intermediaries), fees can be huge , and settlement can take a long time.
But why is this complicated? Isn't it mostly about regulations / KYC / AML, rather than anything technical?
Stablecoins are much simpler because they don't do anything with respect to regulations, they're just a dumb ledger. For those who don't want to bypass regulations and the legal system, stablecoins bring as much as yet another database / ledger, which are not the problem in the first place.
tm-guimaraes
No. It’s about connectivity.
Payments basics: Simplest scenario (details overly simplified) When you send money from account A on bank X to account B on bank Y, what happens is that Bank X debits account A on its system and credits bank Y’s account on bank X (let’s say it’s Xy account) Then bank X sends message to Bank Y to credit account B, so Bank Y debits X’s bank account (Yx) and credits B.
As you can see this is an issue, it means that every bank has to have an account on every other bank in order to have funds moving around, and even keep liquidity there.
That’s where Clearing And Settlement system comes in, they act as a centralised force.
So instead of bank X having an account (with enough liquidity ) on bank Y so that its customers can transfer money to Bank Y customers, both of these banks have an account on some Clearing/Settlement third party (usually it’s a system by a Central Bank) and interact with that system instead, so instead of N*N bank accounts on outer banks, you have N accounts on central system.
EU has TARGET from ECB for settlement of euros across EU.
But there is no central bank of the whole world of every currency.
So what happens when too far away banks interact?
They have to search through the graph of all the world banks how they can get money to a particular bank. Add currency conversion as an extra complexity, because every connection is on a currency.
So it’s quite the graph search with many constraints, clearing and settling such stuff is hard because of that.
Regulation and AML is just one of the difficulties in linking nodes, but other exists, for example liquidity, a small bank can’t just spread multi currency accounts on many places.
The benefit of stablecoin on a blockchain, is that it kinda gives you “whole world central bank”, more correctly, it makes everybody share the same ledger, instead of each bank having its own that needs reconciliation with everybody else.
The only thing extra needed for stable coins, is space for encrypted messages is a transfer(so that a bank can tell other bank to credit customer B) and a public mapping from Bank Bic to crypto wallet id.
soco
And there it is: the first valid use case for a coin I have ever heard! (nb: I'm not much into crypto, there may be more I have missed)
dgrr19
> Too many smart people work on these pointless projects instead of useful tech that benefits society
Decentralization doesn't benefit society? umh...
buran77
"Decentralization" is a generic principle and a very selective choice in this case. What was the specific practical implementation that was so beneficial to society to this day?
Centralization is what enabled today's societies to thrive. So when talking about decentralization you have to get into the specifics to show the value.
dgrr19
Tell third-world countries that centralization is good :)
Centralization could be good, sometimes (if it works idk). The problem is that the financial world has been monopolized by certain entities and the barrier of entry is enormous. It is never fair to not play by the same rules when regulation favors big institutions, etc... Access to credit is difficult sometimes and unfair. But that is just a reason you could give in the US.
Decentralization ensures that countries that condemn their citizens to raising inflation can access other types of income. Some argentinians get paid in USDC, because their currency is just worthless in other countries, and they would never be able to access USD in their banks.
Decentralization (I have in mind something like Hyperliquid or even BTC) ensures that everybody in the world have access to the same economy without intermediaries asking for a fee. Which means, a person in Indian can access to income the same way a person in the US would. Or you could do a transfer overseas with less fees or regulation problems.
Yizahi
Decentralization benefit society. Trust-less systems - don't. Trust-less systems lead to libertarianism and anarcho capitalism, both are just fancy words for feudalism. We all know how that works, there are even modern day re-enactment which all end up massive fraud and crime. I prefer semi-trusted democracy to the feudalism any time.
dgrr19
I don't see how a trustless & decentralized system would cause feudalism. On the other hand, I see how our current "democratic" system evokes in neo-feudalism. We are all slaves to the government and the few conglomerates they favor, paying taxes to be more restricted. No thanks, I'd rather have a libertarian system and close to 0% tax, if not zero and practically no government.
No, you don't need to worship Amazon in a libertarian system, Amazon lives thanks to regulation (Amazon supports raising the min wage), and other import fees & tax exemptions that smaller businesses can't afford to bypass.
dgrr19
memecoins have nothing to do with BTC. Talk about the price was always a thing because BTC is a currency, thus price is key. The tech is good, or it was at the time. I don't see the case for money laundering in BTC, only one could be XMR and mixers in ETH. Apart from that, in general cryptocurrency is not good for laundering since the blockchain can be tracked.
satanfirst
Watching how it is working. That the laundering can be tracked is just an expense to the process of recruiting suckers to be the visible parties who eventually do time and don't know about anything but the other visible parties.
dgrr19
But that also happens in the fiat system, so where's the flaw in crypto?
mvdtnz
> because BTC is a currency
The big narrative I keep hearing about bitcoin the past ~8 years is that it's no longer considered a currency even by the true believers.
trealira
I'm not really a Bitcoin true believer, but it seems like a currency to me. I've had to use it.
There's certain medication that's cheaper for me to buy online from overseas than it is in the US (where I live) even with my insurance. Those from whom I've bought it only accept payment in Bitcoin. I'm going to admit that it seems kind of sketchy, but I'm grateful for the existence of BTC because of it, and I think it really does seem like a good decentralized currency in that situation.
Maybe skeptics would label this money laundering or criminal activity, but I'm using it to buy medication I have a prescription for; if this is illicit, it feels like it shouldn't be.
flmontpetit
Baffles me how this industry is basically speedrunning through the troubled history of regular finance, and every piece of legislation and every institution has to be rebuilt from scratch even though the mechanisms and the problems are almost exactly the same.
tetha
I always found the idea of a free, unregulated financial market being a positive thing amusing. Many of these regulations were made because more or less complex loopholes got exploited and many less wealthy people lost their money. And quite a few of these people with practical experience in these various exploits are still around.
cakealert
You can always opt into security by being the customer of a bank.
figassis
Not sure if people who opted out of security expected to be doused in gasoline. There is something to say about whether this state of no security is generally desirable by society. Everywhere else this happened was eventually regulated.
So thinking crypto will be an outlier is wishful thinking since it will never be allowed to be more powerful than governments. At most, new world orders will be created, but they will settle and be like the old ones, with some new more crypto native rules. They will always know who you ar and who you’re transacting with and where either of you are.
Current crypto fanatics are assuming they will all be part of this club. This road will be filled with poor old men with fewer fingers and lots of regret.
I want crypto to succeed, but I don’t expect it will be unregulated. You’ll pay the same taxes, you’ll go to jail if you try to avoid them or if you send crypto to entities banned by governments. Eventually the things that make crypto so valuable will be hammered out so it’s more like fiat.
Maybe the value will crash or wealthy people of today will find a way to freeze it into reserve currencies (like the newly minted federal crypto reserve), but after some point it will stop being a source of wealth just by holding it at the right time. You will need to exchange it with value you create.
The math of crypto wealth by HODLing is unsustainable.
flmontpetit
And that's only because of deposit insurance and heavy regulations on fractional banking.
There is no reason to trust any bank implicitly. As a matter fact that have proven not to be deserving of it as recently as 2008.
roenxi
I've always liked this analogy because it accidentally implies something I believe to be true - the crypto industry will eventually overtake transitional finance while moving at great speed. It says a lot about how bad the traditional finance industry is that this is the easiest path forward that the market found.
2muchcoffeeman
You assume it won’t just hit the same problems and stall or that traditional finance won’t learn and comes up with its own solutions.
Kbelicius
> I've always liked this analogy because it accidentally implies something I believe to be true - the crypto industry will eventually overtake transitional finance while moving at great speed.
It isn't implying that. It is implying that it will end up at the same place as the traditional finance.
> It says a lot about how bad the traditional finance
What is so bad about traditional finance that crypto fixes?
labster
Bad money drives out good money, which explains why crypto is moving so fast.
bondarchuk
"Bad money drives out good" because when they have both, people will prefer paying (getting rid of) the bad while keeping the good for themselves. That has nothing to do with what's happening with cryptocurrency.
dgrr19
problems are the same but decentralized. You can't give a mortgage to an anonymous user, can you?
beloch
Banks are fortified and guarded for a reason. If you have money in bitcoin, it's only as secure as your person and whatever you use to access your crypto assets.
If you had a million in gold, would you leave it on your desk? Walk around with it on the street? Your odds of getting to where you're going with the gold are pretty good in most places, but it's still a big risk. Brag about or show that gold off to somebody, as many in this story did, and you rapidly become a target.
bufferoverflow
You can store your private keys encrypted in a safety deposit box. You can store 3 copies in 3 different banks. It only costs $15-30 per year per box.
acdha
That helps, but only so much due to the inherent lack of security. We’ve already seen cases where they hold a family member hostage demanding someone turn over the keys, and you’re not getting things like duress procedures for $15/year.
bufferoverflow
In case of kidnapping having your money in a bank won't help you.
beloch
This is sensible, but how many people do it?
walterbell
"French police free kidnapped Ledger executive" (Feb 2025), https://news.ycombinator.com/item?id=42819018
Physical security primer for Bitcoin (2019), https://www.youtube.com/watch?v=HUgPhPkS2yc
vkou
The best part in all this is that once the transaction goes through, the kidnappers can definitively verify that they've received the ransom that they were asking for, and that they no longer have any use for loose ends or witnesses.
billpg
Or any reason to actually free the hostages.
eru
Stealing most crypto money is about the dumbest thing ever, because all transactions (for most such currencies) are open to the public to scrutinise and de-anonymous at their leisure. And the police is included in 'the public'.
TheDong
Even with a public ledger, it's harder to trace than, for example, forcing someone to wire the cash via the traditional banking system.
With banking systems, each bank account has a unique address (private, but they'll cooperate with the government and police easily, and are experienced doing so), and that address is associated with a real person... and it operates slowly, which means the police can easily catch up to transactions. A transaction that crosses country boundaries has more scrutiny and takes longer, giving the police even more time and information.
Crypto has public unique addresses (public keys), but there's no requirement any of them have names associated with them, and most don't. It operates more quickly than large bank wires, and easily crosses international borders.
I'm not a fan of crypto, but even with public ledgers, it's less traceable and more anonymous than normal banks of most (all?) countries.
SOLAR_FIELDS
One key component being alluded to here is that banks are legally required to know who you are (KYC). And there are consequences if they don’t. That alone makes a huge difference in everything having to do with the traditional banking system.
geoffmunn
That's only a post-9/11 requirement, so it's not really part of the 'traditional' banking system.
arghwhat
The lack of borders makes it more traceable as you don't run your head against a different jurisdiction bring unwilling to provide data. There's a lot of creative criminals though, and a lot of questionable creative crypto solutions that cater far too well to them.
eru
> Even with a public ledger, it's harder to trace than, for example, forcing someone to wire the cash via the traditional banking system.
Not really. From the comfort of my home, I as a member of the general public can trace any, say, bitcoin transaction I feel like, and work on de-anonymising it. And not only today's transactions, but all bitcoin transactions ever.
To trace bank transfers, you need to be part of established law enforcement and have something like a warrant. (Or whatever the legal requirements are in your country.) The transfer might go via multiple countries with different rules and perhaps less enthusiastic authorities. And the data might get lost.
ramesh31
>Stealing most crypto money is about the dumbest thing ever, because all transactions (for most such currencies) are open to the public to scrutinise and de-anonymous at their leisure. And the police is included in 'the public'.
People keep saying this, and yet it keeps happening. You seem to have far more faith in the police than is warranted. Exactly how many investigations have ended in an arrest and recovery of funds from these actions? I'm guessing somewhere near zero for anything not directly involving government or corporate interests.
danaos
They use bitcoin "mixers" and harder to trace coins like Monero/zcash etc.
elevaet
If they don't cash out directly to an off-ramp there might not be a way to connect a crypto address to a person. If they use the crypto to buy illegal shit and sell that on the black market for cash - or sell the crypto directly on the black market for cash, they could evade detection.
I wonder how much crypto is changing hands off-market in shadier corners.
aorloff
There’s orders of magnitude more wash trading than off market wallet swaps
arghwhat
That has never stopped anyone, plenty of ways to launder money, quite a few of which are unique to crypto.
tim333
N Korea seems to do ok with it.
Duwensatzaj
Could be worse. In Russia someone discovered a fake prison and incinerator in a police officer’s home.
akimbostrawman
Turns out having a publicly visible bank balance is a bad idea. If only there existed a better coin without that issue...
lazyasciiart
In at least two of these stories, the “bank balance” was public because the person posted it on social media (Belgian guy and Turkish influencer). Im not sure if the risk is any lower when you post “my savings account is up to $1.6million!” ?
mijamo
Of course it is lower! You have plenty of rich people living in known places without any special security and no one comes to kidnap them because they cannot just send over their whole wealth in an irreversible transaction in a second. The problem is not to know who has money, it is a system in which it is trivial to transfer it without any supervision and without any way to go back.
akimbostrawman
Correct which means it's even more important for that currency to be not public but private and even anonymous.
dandanua
> it is a system in which it is trivial to transfer it without any supervision and without any way to go back
And somehow they praise it as a solution to all world's problems.
anal_reactor
Crypto has generated quite a few people who are rich but still have poverty mindset and don't understand that flashing your wealth attracts more issues than solves your problems. While I'm not rich, I'm definitely above average, and that's a big reason why I wear a jacket I bought in a second-hand shop ten years ago.
anacrolix
My takeaway from this is people are still turning a blind eye to the shenanigans of the much larger mainstream markets where shit like this happens all the time but is not amateur.
The whole system is rigged. Yes, crypto too.
littlestymaar
I'm honestly surprised this hasn't been more prevalent, especially since state actors (NK at least) have used cryptocurrencies to get foreign currency for several years now. No matter how rich and paranoid you are, there are really little you can do to protect yourself from a state actor that wants to get you, especially in an era of ubiquitous digital tracking from tech company that are willing to sell all the Intel they have about you to the highest bidder.
ajb
This was apparently reached in Russia a while back, and became very advanced: https://threadreaderapp.com/thread/1579124072390463488.html
"In contrast, Russian cryptobros that I know tend to act very, very lowkey. The fewer people know about your activities, the better. Posting about dealing with crypto in social media is absolutely unthinkable. Why? Because that makes you too easy and lucrative prey "
"Most likely explanation:
Russian federal prison officer built an underground prison as an exact copy of a real prison. There he persuaded kidnapped ppl they are in a real prison. They'd give him wants he wanted, then he'd kill & burn them. In 2018 he died, prison was abandoned"
logicallee
This happened to me, with the difference that nobody was abducted.
Defense contractors associated with the U.S. military said they would sever fingers to make me "care more" here is a screenshot:
or
This was sent over a Department of Defense channel.
drdeca
What is this screenshot supposed to be demonstrating?
What’s with all the asterisks in the image?
logicallee
The screenshot is an example of someone making a reference to "removing fingers" (direct quote from the image) to make someone "care more" (direct quote from the image).
Regarding all the asterisks, your guess is as good as mine. Perhaps it is to make the text look scarier and more menacing, or more serious, or to make it seem like it was written by a madman who will actually do what is described. It's hard to know why they did that.
I went from early bitcoin adopter to early bitcoin skeptic and despite missing most of the gains I have no regrets. During the early days the crypto space was concentrated to small online communities. People were mostly interested about the technology and the talk of price was limited, in the context "mass adoption". Nowadays it's about the price and the memes. Add to that the money laundering, energy waste and these abductions. Too many smart people work on these pointless projects instead of useful tech that benefits society.