Crypto has become the ultimate swamp asset

Original Article ↗ Hacker News Discussion ↗

Perceived (Il)Legitimate Use Cases

  • Many commenters see crypto as overwhelmingly used for crime: drugs, fraud, money laundering, bribery, sanctions evasion, ransomware, child abuse material, murder-for-hire, cartel funds, and terrorist financing.
  • Others argue there are “legit” uses: bypassing capital controls (Argentina, Lebanon, Turkey), sending money to relatives or refugees (notably Ukrainian), paying for hosting/VPNs or games from sanctioned countries, porn/kink sites excluded by card networks, and supporting debanked or censored entities (e.g., publishers, activists).
  • Disagreement centers on whether “bypassing bad laws” is morally legitimate or simply lawbreaking; some equate it to money laundering in principle.

Sanctions, Capital Controls & Authoritarian Regimes

  • Crypto is described as a tool to sidestep punitive FX regimes and dual exchange rates, avoiding official conversion at bad rates and bans on outbound hard currency.
  • Critics counter that the same rails empower kleptocrats and sanctioned states, making oppressive regimes more resilient and facilitating theft at scale.

Regulation, Enforcement & Consumer Protection

  • Consensus that the protocol layer is hard to regulate; debate focuses on regulating exchanges and fiat on/off-ramps via KYC/AML and sanctions.
  • Irreversible, pseudonymous transfers are seen as structurally favorable to scams and kidnapping/ransom, compared to bank-based systems with in-person checks and chargebacks.
  • Some insist that safeguards like banks and refunds are hard-won consumer protections; crypto discards them to society’s detriment.

Speculation, Returns & Social Harm

  • Speculation is defended by some as a legitimate use or entertainment (akin to casinos, horse racing).
  • Others argue current crypto gains are mostly from “fleecing rubes,” enabled by hype and weak regulation.
  • Debate over whether crypto’s price increases represent inflation hedge, speculative bubble, or “inflation” via proliferation of new coins.

Centralization vs Censorship-Resistance

  • Pro-crypto voices emphasize escaping centralized gatekeepers (banks, card networks, Stripe) that can deplatform lawful but disfavored speech or commerce.
  • Critics note practical centralization: most activity is off-chain inside exchanges; stablecoins like USDT can freeze accounts; big platforms can and do block users.

Energy & Technical Debates

  • Concern over combining energy-intensive AI with crypto; critics see much AI/crypto usage as waste.
  • Defenders stress that many newer chains use proof-of-stake, arguing that energy critiques aimed at all crypto are outdated, though Bitcoin remains a major PoW user.

Ideological Evolution & Culture

  • Several see a shift from early cypherpunk/techno-anarchist ideals (freedom from banks and states) to today’s landscape of hedge funds, “finance bros,” and billionaires seeking to escape regulation and taxes.
  • Some argue this trajectory was inherent in the technology’s goal of being “unstoppable”: once you remove legal constraints, fraudsters and criminals logically dominate.
  • Others frame it as a broader pattern: builders create tools, then redistributors/financial interests capture the narrative and extract value.

AI, Agents & New Use-Case Proposals

  • One thread proposes using crypto (e.g., USDC on fast PoS chains) as a universal, transferable payment layer between AI agents and services, with dynamic pricing based on demand.
  • Pushback: such systems don’t require blockchains; centralized credits are simpler, give users recourse, and align with platform incentives. Many see no compelling reason for platforms to adopt open, token-based payments.

Macro-Political & Systemic Risks

  • Some speculate about crypto’s role under a Trump administration: wealth extraction from the US economy, possible “crypto-equivalence” for US debt, and eventual opaque bailouts if losses become systemic.
  • Others doubt there will be bailouts; they see the system designed to push losses onto the masses while insiders rotate into new tokens.
  • Concerns raised about civil unrest as inequality, scams, and climate impacts (e.g., Florida real estate in a warming world) intersect with crypto-driven wealth shifts.