Preston Byrne

> Now if dai, usdc or usdt had failed, that would be a big deal.

The “Dai” peg did break — both in early 2020 [1], and a few days after launching. DAI’s now 60% backed by Tether like instruments. It’s basically a strictly worse version of Facebook’s Libra, assuming Libra weren’t crippled by state regulators (Libra is now Diem).

Every major algorithmic stablecoin has imploded at least once in times of market volatility. Preston Byrne has written a wonderful article explaining why the concept is clearly unsound and theoretically flawed [2]:

When you make a “coin” which is in form and substance a repackaged
exposure to another underlying cryptocurrency, as Dai is simply
repackaged Ether, and Basecoin is simply an abstraction of demand
for “Base bonds,” and peg that exposure to some meatspace asset
like an ounce of gold or a U.S. dollar, a sudden move against the
underlying collateral – in this case, 12% – can trigger a sell-off
that breaks that peg, and breaks it hard.

It’s perhaps a testament to the frothiness of the cryptocurrency markets — or the sheer number of low information investors — that this concept doesn’t die. No matter how many times the “stablecoin” peg breaks, no matter how many times it costs investors millions of dollars in losses, it just refuses to die. If there were any justice in this world, the concept would’ve been fundamentally discredited years ago.

Unfortunately, when stablecoins break, they get propped up by biased…

Bitcoin and blockchain systems are nearly all designed to exploit new users and extract capital from greater fools who are too late to the game and didn't read or understand the rules and fine print.

Satoshi's Bitcoin and many of the crypto-currencies that have followed create and distribute the supply that effectively creates a decentralized pyramid-ponzi scheme. Semantically, a more accurate term is needed;

Bitcoin is a Satoshi scheme,

.. or a "Nakamoto Scheme" https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/

Imagine an economic policy that uses a "limited" amount of pie as "currency". Bitcoin gave half of this pie away to the first few users who arrived in exchange for the least amount of work/effort possible. Any user arriving later will need to waste more hashing power (computational work) in exchange for a smaller sum of newly generation coins for a successfully mined block reward. or the user might be convinced to purchase a previously produced coin from one of the early adopters. Buying a Bitcoin is worse than zero-sum, as money from buyers is exchanged for previously generated coins, the network must increasingly waste computations and energy.

Satoshi's economic model creates a system where participation is only beneficial if you can exploit the ignorance of another new user who enters the network after you. Bitcoin effectively relies on psychological manipulation though deceptive marketing claims like

"Bitcoin is deflationary"
"Bitcoin is rare"
…

From https://prestonbyrne.com/2025/10/16/the-ofcom-files/

> consistent with the UK legal doctrine known as parliamentary supremacy, which holds that the UK Parliament has theoretically unlimited power

This is also true in Canada for the most part, while in theory with the adoption of the Canadian Charter of Rights and Freedoms as part of the Constitution Act, 1982. This Act prescribes that “the Constitution of Canada is the supreme law of Canada” (s.52), Thus constitutional supremacy replaced Parliamentary supremacy in Canada, in reality, the parliament can invoke s. 33 of the Charter, the notwithstanding clause, allows Parliament and the provincial legislatures to override certain provisions of the Charter, Canadian legislatures are still partially supreme. Which means the law can stand even if it violates those rights. This clause, which can only be used for a five-year term that is renewable, applies to specific sections of the Charter, including fundamental freedoms, legal rights, and equality rights, but not democratic, mobility, or Aboriginal rights.

The Wikipedia article on civil liberties in the UK is a good starting point.

https://en.wikipedia.org/wiki/Civil_liberties_in_the_United_Kingdom#21st_century

Selections:

Criminal Justice Act 2003, abrogated double jeopardy in cases with "new and compelling evidence".

Serious Organised Crime and Police Act 2005, created an offence of inciting religious hatred, an advanced notification scheme for protests up to 1 kilometre from Parliament.

Terrorism Act 2006, following the bombings in London on the 7th of July, this legislation allows for people suspected of terrorist offences to be detained without charge for up to 28 days.

Here's someone's blog post listing things that would be legal in the US but not in the UK, citing the specific laws or constitutional provisions in each that make it so.
https://prestonbyrne.com/2016/01/06/the-american-english-civil-liberties-comparison-table/

ROTFLMAO

Are you serious? You need to establish presence at an exchange meaning you need to scan and send your ID to a company which more likely than not -- does QuadrigaCX ring a bell -- is run by scammers. Then you need to buy bitcoin and store it somewhere... and then send it to someone. The sending costs an unknown amount, takes an unknwon amount of time, the receiver gets something but none of you can predict how much that is actually worth by the time they receive it. If they want to do something with it they need to go through the exchange rigmarole. And you call this very easy to use.

Bitcoin was, is always will be nothing more than a novel scam. It's not a Ponzi... it's a novel form of scam. https://prestonbyrne.com/2017/12/08/bitcoin_ponzi/

Correct, the analysis comes with the disclaimer that I am not a lawyer, and it is not legal advice. I am active in the space and have consulted leading lawyers for my own activities, so I come with some knowledge, but obviously this is a quickly evolving space.

For anyone buying tokens and considering SAFT offerings, this is a good read from a securities lawyer, albeit an English one (not US):

https://prestonbyrne.com/2017/08/04/thoughts-on-the-saft/

This is also a great post in terms of highlighting pitfalls and challenges:

https://medium.com/@twobitidiot/losing-alpha-why-most-new-crypto-funds-are-a-sh-t-deal-98ea0013971a