> With every transaction supply shrinks by burning a percentage of reflections to the burn wallet … Reflections get distributed to loyal holders with each transaction.
“Now the first thing to say is that this is definitely not Pyramid Selling, ok?”
How is this not entrapment? Wouldn’t it be better for the FBI to investigate crypto scammers using their own coin than to create a coin for the purpose of scamming?
I feel like law enforcement always uses the option which produces easy prosecutions rather than the more difficult option that involves complex investigations that has more risk but more likely to produce long term good.
It’s only entrapment if you push someone into doing something they wouldn’t normally do.
If the FBI threatens your family to get you to commit a crime, that’s entrapment.
If you pull up to a sex worker and proposition them, but it turns out to be a cop, that’s not entrapment. Because you were looking to commit the crime.
IANAL but my understanding is it's only entrapment if they encouraged the other parties to commit crimes they may not have otherwise, if those other parties approached FBIcoin with a proposal to do crimes entirely of their own accord then it's a kosher sting operation.
Fundamentally, it's not entrapment because entrapment doesn't mean what many of us, myself included, feel that it should mean.
The crime was committed. So the burden of proof falls on the defendant to demonstrate entrapment, which only happens if they can make a convincing case that they were not otherwise inclined or likely to commit the crime.
That's quite difficult to do when, in fact, they did commit the crime.
I think the standard should be stiffer: it should need a preponderance of evidence (not proof beyond reasonable doubt) that the defendant either also committed similar crimes, or was demonstrably predisposed to committing the crime in question.
I rather suspect that the defendants in this case would not be able to mount that defense either. But I've grown quite tired of reading about the FBI hitting up some random resentful teenager and talking him into buying a fake bomb.
For all intents and purposes entrapment basically doesn’t exist according to modern court interpretation. If you as a layman think it’s entrapment it’s probably not.
Police are allowed to set up stings . if you walk in to a crack house and willingly buy crack, thats on you. You broke the law and there was intention to do so.
If the government say, gave you money and told you to invest it with their friend at glowcoin to dump it, that would be entrapment.
Local us government agencies at the state level routinely get slapped down for entrapment. The FBI, not so much...
It'd depend heavily on what the specific circumstances of the FBI's actions were.
Creating a coin to investigate pump & dumps is not entrapment. That's a legal action, and one that many legit people and businesses do. It's akin to standing up a server on the Internet to see who hacks it.
If they approached a market maker who was not otherwise marketing pump & dumps and said "Hey, I have this coin, can you pump it up so I can exit with a profit?" and the market maker replies "This is not normally something we do, we're not interested" and then the FBI keeps approaching them with progressively higher prices until they give in, they'd have a good case for entrapment. If they threaten the market maker's family, it'd be a very good case. But note that even if it's the FBI doing the approaching, but the market maker just says "Sure, here's the price", it's still not entrapment. In that situation they're still clearly willing to commit crimes.
They were targeting companies that performed market manipulation as a service for creators of crypto coins.
So they created a coin to pose as a customer of this service.
It’s just not entrapment at all, it’s not similar or close to entrapment either. It’s analogous to posing as a drug dealer to bust money laundering services, or posing as a car thief to bust a fencing operation.
Entrapment is sitting at a bar and pushing someone to take the prostitute at the end of the bar for hotel room transaction. Whereas if you proposition the FBI agent who is just sitting at the bar looking cute and offer her money for sex, that’s a legitimate bust.
Entrapment is when the police threaten you into doing something you wouldn't normally do. I'll kill your daughter if you don't rob the bank. If you weren't going to rob the bank and you just happened to have bank robbing tools and you really weren't going to use them, that's actually totally fine. if it was the cops threatening you that made you rob the bank then that's entrapment.
They tried to push him into ordering CSAM for years, with fake penpals, fake advocacy organizations, fake catalogs, etc. Gave up repeatedly, but after three years they finally got him to bite.
law enforcement has limited resources, and must try to catch the most criminals and dissuade the most crime given said resources. It's especially bad in tax these days, there are tens of thousands of people with incomes over a million dollars that the US doesn't have the capacity to go after.
It is a complex situation. The worst case scenario from these entrapment operations is the FBI incentives people into a committing a crime they would otherwise not have committed. The end result is more crime, but maybe it kind of nets out because FBI has 100% success and victims are made whole but then you have the sunk cost of this FBI work. The more optimal case is the FBI nabs people who would have otherwise committed another crime and this is a more efficient way of dealing with these people than investigating real crimes.
My concern is the FBI doesn’t actually try and determine which is the best allocation of resources but just presses the button that makes the FBI look best. Investigating real crimes is a lot more difficult than investigating these ‘sting’ crimes so if investigating ‘sting’ crimes was less efficient then it might be incorrectly priotized.
Entrapment would be if they encouraged people to break the law who otherwise wouldn't be pre-disposed to doing that. It's a fairly difficult thing to prove, but nothing they talk about here rises anywhere close to that. They just made their own coin.
Came here to ask the same. I guess it's entrapment when law enforcement induces a person to commit a crime they otherwise wouldn't have.. so maybe it depends on how hard and well they marketed it? :) It's such a fine line - both legally maybe (IANAL) but certainly morally I feel.
It's never that cut and clear. They're usually going out of their way to create some situation that temps people who don't normally do that type of crime to do it.
The quintessential example is a bait car with the keys in it. Every real car theif walks right on by and after a week of it sitting there they nab some teenager with a weed dealing prior and then throw the book. Yeah, he did steal it but he probably wouldn't have if he didn't walk by it sitting there with the keys in it for an f-ing week. Frequently when it's "real crime" they're going after informants are involved and that often muddies the waters a lot since the informant is usually trying to get a break on some other charge.
"I was tempted" is generally not considered a legal defense if you commit a crime. What difference does it make if the police created the particular temptation? If the person in your example stole a non-bait car where the owner was just careless about leaving their keys inside, that's still a crime right? How does the police creating a similar situation change the legal facts at all?
Entrapment debates are also a pretty good opportunity to apply the average person heuristic. Would the average person likely steal a car if they saw the keys sitting inside? Probably not, so someone who would do that is arguably predisposed to committing the crime if presented with the opportunity.
Now there's a very valid argument to be had about whether or not it's a good use of police time trying to catch lazy criminals (i.e. those that are willing to commit a crime but only when it's super easy). But that's a police policy discussion, not a legal defense. The criminals in those situations still deserve to be charged.
> They're usually going out of their way to create some situation that temps people who don't normally do that type of crime to do it
So you're just making up that they did that here because your gut says they usually do that?
> The quintessential example is a bait car with the keys in it. Every real car theif walks right on by and after a week of it sitting there they nab some teenager and then throw the book. Yeah, he did steal it but he probably wouldn't have if he didn't walk by it sitting there with the keys in it for an f-ing week.
We're looking at multiple individuals collaborating long-term saying they can "control the pump and dump" and do "inside trading easily." These are just scammers doing scam things.
The fact that you fall back to "these are bad guys doing bad things and in this particular case it wasn't entrapment" brings us around to the first point about juries.
That's a great way to misrepresent what I said, but no. You just have your own definition of what entrapment is and the only reason you're calling it entrapment is because of a gut feeling you have, which is an even worse argument. I'm questioning if you even read the article to be this obtuse about it.
You can see the direct quotes from guilty party. It's hardly a gray area like a teenager entering a car with the keys inside. It's adults telling uninvolved people that they intend to break the law, encouraging others to do it with them. It's pre-meditated over a span of many months. There is nothing an FBI agent could have done short of force them to say these things at gunpoint that would even approach entrapment.
Unless you're just asking for carte blanche crime because you're willfully ignorant of what entrapment is.
>Liu Zhou, a “market maker” working with MyTrade MM, allegedly told promoters of NexFundAI that MyTrade MM was better than its competitors because they “control the pump and dump” allowing them to “do inside trading easily.”
hilarious, but running an operation of this scale to only charge 18 people? this is like squishing a few individual ants, then going on a victory lap bragging to national media about what a canny and clever exterminator you are. great job cleaning up 0.0001% of the market 10 years late!
The FBI really shouldn’t be creating fake securities for people to buy. I don’t think any of the fake companies they make (including the secure phone one) should be allowed. It’s a bad use of taxpayer funds and it’s not how government should be arresting people
I don’t mind it. They’re taking down seasoned scammers. We all agree they should be punished, now we’re just arguing about how to catch them.
If you want to be upset about government overreach, look into Richard Glossip’s case. He’s been on death row in Oklahoma for decades for a murder even Oklahoma agrees he didn’t commit, based on the false testimony of the actual murderer.
A reasonable argument can be made that the government enticed people to break the law. In some jurisdictions (like Germany) this kind of behavior is illegal for the police to use, only the secret services can do so (but only very limited in scope, and their discoveries are all but impossible to share with police).
How did they entice anyone to commit a crime? They created a vessel for crime to occur, and it occurred because the criminals wanted to commit the crime.
This is apparently a controversial opinion but I don't think the government should be allowed to break the law. And no cheating by writing a law that laws don't apply to you.
The post you're responding to says that they shouldn't break the law. Emergency vehicles are allowed, by written law, to exceed the speed limit and move through red lights. Here's one, for instance...
I mean, there's a difference between writing an exemption just so you can do a thing without getting in trouble, and writing an exemption that is so obviously for the benefit and health of society/community writ large. I can't think of a crappier example to have used to have tried to make the point they're making.
The FBI didn’t write the law. And it’s not for the benefit of the FBI, it’s for the purpose of getting scammers off the street. Billions of dollars have been lost of crypto scams.
I realize I’ll be in the minority here saying this but: Isn’t all crypto a pump and dump scheme? It has no intrinsic return, it only makes you money if someone buys it from you at a higher price than you paid for it. It’s still barely used as money.
Any actual utility imagined for cryptocurrency has yet to materialize in any significant quantity despite nearly a decade of tech bros telling me it’s coming any day. I’d bet less than 0.1% of good and services are actually bought with it. (Optimistic estimates are 0.2%). So it’s clearly not primarily used as currency. You can’t eat it and it doesn’t pay a dividend.
It’s just people pumping and dumping and other people hoping to time their purchases and sales along with the pump and dumpers.
You'll end up in a slippery slope there, though. Lots of stocks don't pay dividends, and you can't eat them either.
But one use is to get around currency controls / manipulation by the government. Not a big deal in EUR/USD countries, but some places limit how much money you can take with you outside, or occasionally invalidate their old currency for a new one altogether.
> Lots of stocks don't pay dividends, and you can't eat them either.
Yes, you can. If you are an UHNWI your private banker who also manages your portfolio will organize cash loans to you and your family using the shares as collateral. It just shows up in your bank account and you pay your bills, go eat out and live off that tax free income. If you don't have major equity holdings (say a kleptocrat living in London who, coming from the wild-west has an aversion to publicly listed equities) your banker will do the same but using your real estate holdings, yachts, etc. as the collateral.
Extremely small market. The reason is there is a real risk that past margin call for the lender there will be no one to offload the crypto onto, even at fire-sale prices. With AAPL and condo developments in LA/NYC there is very low cost of insuring an annihilation of value for obvious reasons -- because it's unthinkable. Not so much for magic internet beans.
Bitcoin’s market cap is $1.2T and the 2008 banking crisis wiped out a huge amount of value of condo value by in LA/NYC. While condo’s may be less volatile, I don’t think Bitcoin is particularly more volatile than the stock market overall. Indeed one of the criticisms is that it seems highly correlated indicating it’s not really a unique asset class from a stock.
And a similar argument could be made that Bitcoin creates value for its customers. You might disagree with that but the people buying bitcoin would probably disagree with you. To me that seems like subjectivity.
Similarly for AAPL and MSFT - the stock price is a measure of a gamble on future earnings not how much value they create for their customers. Indeed high margin businesses like AAPL shouldn’t even exist under an intrinsic theory of value because a large part of the 30% markup is because of social cred and network effects. That’s not really value creation.
> I beg to differ.
Can you please describe it in more detail because this directly contradicts what little I know about economics.
If I’m understanding your position, it seems like you’re arguing that value is some intrinsic property.
That mechanism however is rejected in the Wealth of Nations, because of things such as the diamond-water paradox. Diamonds are fairly useless (or at least were moreso when the treatise was written) but still cost more than water which is crucial to life. If value is represented of the intrinsic value, why would that be?
This paradox is interestingly resolved by the subjective theory of value which has a similar solution to marginalism which says basically that while the first units of water are valuable, if you have excess of what you need it you won’t want more. Whereas because diamonds are rare you will want more of them and are only bounded by your storage constraints.
> A combination of both labour and subjective theories can be seen in the formulations of English economist Alfred Marshall. He argued that prices are determined by both the objective costs of production, the supply, and the subjective utility of consumers, the demand. This approach is in line with the modern conception of how market prices are determined, where both the demand and supply curves intersect.[9] This is in contrast to other 19th century theories which view costs through a type of subjective value lens. Since the subjective value holds that buyers use their own value judgements, the same goes for sellers, and thus the mechanism of production. Austrian economist Ludwig von Mises believes that production costs are determined by a seller's evaluations of their opportunity costs, or the sellers "marginal utility lost of having fewer of that good".[10] Under this, supply curves are also set by subjective preferences.
So it’s pretty well established economic theory that the important factors for value are the perceived value of something (demand) and the cost to produce it (supply). But there’s no objective intrinsic way to measure value because it doesn’t exist as it’s a product of supply (objective based on cost to produce) and demand (subjective based on perceived value).
>limit how much money you can take with you outside
Bearer shares were once a choice tool for cross-border money laundering. Once commonplace, now outlawed or neutered virtually everywhere on earth. What you are describing is money laundering. It is a crime. We are not debating whether it should be considered so, or that all engaging in it are the bad guys (some are ordinary wealthy/middle class fleeing warzones/regime-change/political persecution), but it is ridiculous to use this as a line of defense for the existence of something.
The stock of every healthy company is overvalued by that measure. The dissolution of the company resulting in the share value means there were 0 expected earnings.
Legally it's only a "pump and dump" if the people doing the pumping and the people doing the dumping are the same or working together. Otherwise it's just speculation.
That's the way most people use it now, yes. I'm also in the minority, in that I use Monero to pay for goods/services that accept Monero. That's it. Believe it or not, some of us use Monero as a matter of principle, not to do anything nefarious.
The only reason anyone accepts it from you as payment is because they believe one of a million speculating gamblers (who prefer to be called day-traders) will in turn take it off their hands for liquid cash. Also we cannot deny the impact Tether has on propping up all cryptocurrencies by way of printing USD value out of thin air.
Imagine using BBBY shares as a store of value and you have pretty much the same situation.
We haven't hit a tipping point where cryptocurrencies are actually needed for their intended purpose en masse. We live in peace and comfort, and not enough people in the first world are concerned about their digital transactions being used against them. When that changes, we will likely see shift from using bad CCs like Bitcoin for dumb pump and dumps, towards actually-useful CCs like Monero for daily transactions.
However, if things change too drastically (the power grid goes down), then CCs are completely useless anyways and we'll be back to bartering. So I'll keep a good stock of Monero, and an even larger stock of things people value in a crisis. Guns, ammo, tools, food, water, medicine.
A total myth. Only occurs in places where a peg is established to currency outside the environment, e.g. prisons. The very few anthropological examples of bartering occur between travelers who do not meet each other again for mutual fear of jealousy.
What happens after apocalypse is people return to providing goods and services on credit. Once every month a communal reckoning brings the community together and debts are cancelled out in a circle. If you have lived in a small eastern-European village filled with hen-farming babushkas, beekeepers and craftsmen as I have in Hungary you will recognize this to an extent even today. The commoner's social life and trade is inexorably linked.
Even the wholesale traders who did make use of cash only settled using it once every few weeks or so, reminiscent of the hawala, fei chien (Chinese flying money), and other ancient mirror transfer systems. While debt was nominally denominated in it among peasants, only standing armies (Rome & USA), mercenaries, criminals, and nomadic peoples/traveling merchants ever held on to cash for longer than a moment.
Acceptance of money to settle debts is the legitimacy of a state's monopoly on violence expressed in units.
Why would I give you a sandwich for your monero in our fallout scenario? Monero is only worth anything today because someone will buy it from you for dollars. Why are dollars worth something? Because the U.S. Gov requires you to accept it for debts and they control the printing of it. If the government loses the ability to enforce that everything reliant on it falls with it. They are able to enforce it by way of the most powerful, violent standing army the world has seen.
Perhaps I misspoke. In a "fallout scenario", I'm not using Monero. The Monero is for when society is still intact, but no longer trusts the state-sanctioned currency.
I don't really know what to say to the bartering point. People want valuable and scarce things they don't have in exchange for valuable and scarce things they do have. How that's a myth to you is beyond me.
This argument is as old as cryptocurrency. Is collecting baseball cards as an investment pump and dump? Lots of people buy cards they expect might go up and then sell the later. Same with real estate. So no it’s not pump and dump, lots of people have made a legitimate fortune on it. Others well they pwned themselves. It’s kind of like realizing the stock market isn’t much more than a casino unless you buy vanguard 500 for the long haul, well crypto is similar.
Baseball cards are a great analogy. Yes, they have been pump and dumped. They also started off seeming valueless, became very valuable, and once people realized they could have made a lot of money from them, the market was flooded and people stopped throwing them out and its now been many decades since you could realistically profit from anything new.
That’s about what I expect bitcoin will look like in the future. (Kind of already does.) If you bought them in the early days you made a fortune, now they’re mature and they’ll never rapidly appreciate again.
Real estate has intrinsic value. Companies have inventive value (usually). Both of them can be used you give you a return even if you don’t sell.
Well, I do know remittances and other forms of cross-border payments are a use case and that’s lovely, but that’s not why Bitcoin is at $60,000. It’s at $60,000 because Americans gamble on it.
> Any actual utility imagined for cryptocurrency has yet to materialize in any significant quantity
Is false, to the tune of billions in remittances per year. Normally when the number starts with a B we do consider that market significant.
> It’s at $60,000 because Americans gamble on it.
It's at $60,000 because speculative investors are taking a position on its future value being higher than its present value. You don't agree with that position and that's fine. To me, that position seems rational, looking at past performance, and considering the odds that the sort of financial instability which makes Bitcoin useful for remittances will increase over time. Clearly if you don't see it that way, you speculate on some other investment vehicle. Stocks perhaps.
It's odd to take a look at a 15 year old growth curve which consistently pumps more than it dumps and call it a pump-and-dump scheme. But you do you.
it gives ordinary people the ability to discipline their central bank and preserve their own personal holdings. there are other uses but this is the one i care about.
> I’d bet less than 0.1% of good and services are actually bought with it. (Optimistic estimates are 0.2%).
this also applies to nearly every 'normal' currency
I mean, no. You could already just buy any other currency for that and you’d still be better off. Crypto, being a ponzi scheme, has price fluctuations that make it undesirable as a store of wealth.
If somebody put all of their liquid assets in any major fiat currency and lost half of it in a couple months you’d be surprised. If that happened with a crypto currency you wouldn’t.
Which goes back to my statement that any benefits beyond gambling are only theoretical and haven’t actually materialized in 15 years of being told it’s coming any day now.
> You could already just buy any other currency for that and you’d still be better off. Crypto, being a ponzi scheme, has price fluctuations that make it undesirable as a store of wealth.
this is in fact the majority use-case when i refer to people disciplining their central banks -- savings are converted to stablecoins pegged to the dollar etc. there is no alternative system that ordinary people have access to; buying dollars at a foreign exchange business is regulated and incurs punitive fees to prevent this from happening.
i'm sure that is deep solace when you lose half of your savings to inflation. btw not sure which central banks you're thinking of, but this checks and balances stuff does not apply to the fed at least; it is explicitly defined as independent (ie unaccountable).
accountable in the sense that it approves appointees and receives reports, not in the sense that congress or voters have any say in monetary policy decisions. this is literally the point of the fed, to put it outside of electoral politics so it is not subject to democracy.
The Fed has a public mandate, and the Congress has the responsibility and the power to make sure that it fulfils such mandate. Therefore it is accountable and it is subject to democracy, and at the same time independent from the electoral cycle.
> I realize I’ll be in the minority here saying this but: Isn’t all crypto a pump and dump scheme?
Bitcoin was created as a gigantic middle finger to the various governments, worldwide, ever printing more money out of thin air. This has been made very clear in the message encoded by Satoshi in Bitcoin's genesis block:
"Chancellor on the brink of second bailout for banks"
From there everybody was free to side with cypherpunk anarchists and to mine Bitcoins or to buy Bitcoins.
Now I'm not disputing there have been lots of pump and dump.
I'll list two examples...
Without squinting too much the following for example is one kind of fraud: although SBF and FTX had already been exposed (by a famous short-seller) for the complete and utter scammy fraud they were, "journalists" at the NYT kept writing articles about SBF as if he was the second coming of Christ. Not surprisingly SBF had parents very well connected in NY and raising tens of millions for the dems. This, too me, is not far from a criminal organization (SBF/FTX/his parents and their accomplices at the NYT) actively defrauding people. One may dispute what's "pump and dump" (FTX was known to pump and dump a lot) but the NYT's articles certainly lured many into FTX, which pumped a great many shitcoins, and then, poof, all the money disappeared.
Following that even, the very Chamath Palihapitiya said that VC from SV had to look very deep into the way they were functioning because they actively took part in a great many pump and dump of shitcoins (he criticized for example lessons being given as to how to create coins).
It's nearly as if the biggest of the biggest of the pump and dumps were organized by well-known and well-respected entities and not by the cypherpunks who originally created Bitcoin no!?
As for an actual usecase, I'll leave this here:
- Turkey inflation rate in 2022: 72%
- Venezuela inflation rate in 2022: 234% ("slowing" down from previous year)
- US government public debt: soon to reach 36 *trillion*
I think people who buy Bitcoin see it as the digital equivalent of physical gold.
Now physical gold is something lots of HNer used to make lots of fun of in the past. They're probably not laughing that much now that central banks are stockpiling physical gold and that gold reached new all-time highs.
So I'd suggest this: first wonder if you were one of these making fun of physical gold, thinking it was stupid. Then wonder if you were maybe wrong or not. Then wonder if "digital gold" is really that crazy of an idea?
Physical gold and crypto have very little in common. Gold price swings are extremely tame in comparison. It is a finite resource and it is actually quite useful (though admittedly, industrial usage alone does not account for its value.) And even still, it’s a dumb investment for most, and the central banks doing it are mostly small economies.
If you were worried about rampant inflation or government default, you could hedge in any number of other ways that don’t routinely experience massive fluctuations and still pay interest.
Economists thought buying gold was dumb for many decades, and still do. You can find some time periods if you look hard enough where gold outperformed the stock market but you have to really stretch to make a case that it’s a trend.
This is such a gray line after reading this and the Levine article.
Here, they are blatantly fraudulent. They trade between themselves, using fake generated wallets.
But what about Jump Capital? They have a crypto division that also does market making. The difference here is there are given a large chunk of tokens to market make with, as they please. Doing arbitrage through MEV (Which is just a collusion agreement between the mevbot and the miners), Buying at low points and dumping at high points.
At what point does convulusion and complexity create enough of a "Market Maker" vs. Trading with yourself.
trading off the same signals is collusion on "Signal sharing".
Creating MEV bots that take advantage of arb opportunities in the pool is insider trading.
Having significant equity in the company, but no financial interest or obligation to disclose dumps?
> But what about Jump Capital? They have a crypto division that also does market making. The difference here is there are given a large chunk of tokens to market make with, as they please.
It may be a little early to make that comparison. Jump is still being investigated for its crypto shenanigans.
Digital transactions being easier to track than physical ones is my guess. Everything I buy with crypto is attached to my wallet. No one knows what I bought with cash or traded items for.
It was quite convenient in those days to convince drug dealers to adopt bitcoin exactly because of that. Eventually all the smart ones moved to monero where privacy between transactions is beyond doubt.
Trivia:
1) Guess which crypto is now being delisted from all major exchanges?
2) Now guess which crypto the US gov is actively purchasing/supporting?
I'd suggest no one should investigate. So you lost your Bitcoin from some massive fraud? Too bad. That's the cost of playing that game. You should not get a free pass when you ask your government for assistance, and you should not have your government investing time and money looking into massive fraud concerning Internet Fun Bucks. You assume all risk when using this kind of money.
But you could tax someone for getting free gifts "in kind", so if you donated GPU time to do protein folding for GlaxoSmithKlein and they rewarded you with some internet points, they might be taxable on the difference.
Video games have all kinds of gold etc. that you can use to buy items. People will pay you real money to get your video game points if the video game is popular. So now is everybody who plays a popular video game committing tax fraud unless they report their gameplay to the IRS, because they earn points which have monetary value? That's not going to go over well.
They seem to want to go with something like it's not taxable unless you cash out. But that's a whole different kind of mess. If you trade somebody your Roblox points for their Fortnite points, is that cashing out, or are you both just trading your non-taxable thing for a different non-taxable thing? Is there any reason for this to be different than trading your sword for a crossbow within a single game? What about games that share worlds? What about games that have cryptocurrency in them?
The whole thing is a mess because "anything of value" is too broad to be practical, but narrow it an inch and you have a loophole.
I believe that the government should tax transactions involving money. If you cash out your bitcoin, then that's income, and should be taxed. I don't think unrealized gains of bitcoin should be taxed because bitcoin isn't money
the point of the ecosystem is blurring lines to the point of exhaustion, exploiting the juxtaposition between the latency of the bureaucracy and its jurisdictional dick-swinging and the relatively near-instant pay out of "legally-gray" fraud.
Probably because their official stated purpose has been “conducting investigations into currency and financial-payment crime, and protecting U.S. political leaders, their families, and visiting heads of state or government.”[0] Especially since US secret service was originally created with the former purpose, as protection of political leaders was added to their list of responsibilities only later on.
To the extent that you could have an P!=NP type thing going on where an AI does a lot of work to reach an easy-to-verify solution, you're likely to have some combination of:
1. The answers have a value uncorrelated with the price: either the problems are stupid (just like BTC's are) or they're so much more valuable than the mere mining reward that you'd do it anyway, with very little "correctly priced".
2. If the problems are completely arbitrary you get all the stupid spin-off coins just like we saw with cryptocurrency; and if they're not completely arbitrary then you vary between having lots of new problems and hardly any in exactly the same way that gold mines were suddenly found and then got mined out back when the gold standard was a thing, and IIRC that's one of the reasons against the gold standard.
> The answers have a value uncorrelated with the price: either the problems are stupid (just like BTC's are) or they're so much more valuable than the mere mining reward that you'd do it anyway, with very little "correctly priced".
Why can't you solve the high value problems by having the person who wants their problem solved bid to have the miners solve their problem instead of someone else's? Then the mining reward includes the bid and stays high as long as people are willing to pay to have their problems solved. Transaction fees are near-zero because the miners are paid by the bidders, and the amount of hardware you need to do a 51% attack goes way up because mining is more profitable this way so there is more competition.
The main problem is that an AI training workload eventually ends, or (if inference is also included) at most generates more work proportional to the rate of user queries. If you have 10 times as many workers, you are done in 1/10th of the time.
Crypto on the other hand generates as more and more work as more miners join the network, so that the overall time taken remains constant. This is an essential part of the system, to prevent improvements in technology devaluing all previously mined crypto.
