commit c8bcc0c273980a67958b7b2cd06acb91efb04a3b
parent 3a2a3e94bf748c3451cc6b87042d4167de7d2c9c
Author: Christian Grothoff <christian@grothoff.org>
Date: Sat, 15 Jan 2022 11:01:37 +0100
-rug pull is better
Diffstat:
2 files changed, 33 insertions(+), 21 deletions(-)
diff --git a/2022-privacy/literature.bib b/2022-privacy/literature.bib
@@ -5,6 +5,16 @@
howpublished = {\url{https://www.schneier.com/essays/archives/2016/03/data_is_a_toxic_asse.html}},
}
+
+
+@Misc{rugpull,
+ author = {Phemex},
+ title = {What is a Rug Pull and How Can You Avoid One?},
+ howpublished = {\url{https://phemex.com/academy/what-is-a-rug-pull}},
+ month = {August},
+ year = {2021},
+}
+
@Inbook{Helbing2019,
author="Helbing, Dirk",
editor="Helbing, Dirk",
diff --git a/2022-privacy/privacy.tex b/2022-privacy/privacy.tex
@@ -312,27 +312,29 @@ reduces the risk from the issuer to that of the underlying asset class.
We note that issuer risk always exists and this mitigation is crucial. With
cryptocurrencies, an issuer (like a cryptocurrency exchange) defaulting is
-commonly called an exit scam. For (largely historic) currencies tied to gold
-such a ``default'' was legalized by calling it ``abandoning the gold
-standard'' or ``currency reform''. We note that even modern fiat currencies
-usually have some limited backing in the form of assets held by the central
-bank that the central bank is expected to wisely use these assets to stabilize
-the value of its currency. Here, the equivalent of an exit scam is
-hyperinflation from quickly balooning central bank liabilities. The effect is
-equivalent to an exit scam, as it again effectively disowns the holders of the
-central-bank backed tokens. Hence, even central bank liabilities are hardly
-``risk-free assets'', a final questionable claim repatedly made in the ECB's
-report. The same assumption of the Euro not requiring trust into the ECB is
-made in the French report. In their section on trust, the authors try to
-contrast ``natural'' trust in fiat currencies with ``abnormal'' trust for
-cryptocurrencies. The authors write that ``While trust in money has long
-relied on a mechanical guarantee in gold or the role of the state, neither of
-these guarantees of trust exist for cryptocurrencies.''. Here, the authors
-pretend to be unaware that the Euro is neither based on a mechanical guarantee
-in gold (first abandoned in France during the First World War and then
-definitively under the Popular Front almost a century ago), nor on the role of
-a state since the Eurozone has none of the prerogatives of a state (army, tax,
-foreign policy, or even government).
+a type of exit scam commonly called a ``rug pull'' for cryptocurrency
+``investments''.~\cite{rugpull} For (largely historic)
+currencies tied to gold such a ``default'' was legalized by calling it
+``abandoning the gold standard'' or ``currency reform''. We note that even
+modern fiat currencies usually have some limited backing in the form of assets
+held by the central bank that the central bank is expected to wisely use these
+assets to stabilize the value of its currency. Here, the equivalent of an exit
+scam is hyperinflation from quickly balooning central bank liabilities. The
+effect is equivalent to an exit scam, as it again effectively disowns the
+holders of the central-bank backed tokens. Hence, even central bank
+liabilities are hardly ``risk-free assets'', a final questionable claim
+repatedly made in the ECB's report. The same assumption of the Euro not
+requiring trust into the ECB is made in the French report. In their section on
+trust, the authors try to contrast ``natural'' trust in fiat currencies with
+``abnormal'' trust for cryptocurrencies. The authors write that ``While trust
+in money has long relied on a mechanical guarantee in gold or the role of the
+state, neither of these guarantees of trust exist for
+cryptocurrencies.''. Here, the authors pretend to be unaware that the Euro is
+neither based on a mechanical guarantee in gold (first abandoned in France
+during the First World War and then definitively under the Popular Front
+almost a century ago), nor on the role of a state since the Eurozone has none
+of the prerogatives of a state (army, tax, foreign policy, or even
+government).
Confidence in fiat currencies is much more complex than what is described in
the French report, and one must at least include the following elements:
