The fall of Sam Bankman-Fried is crypto’s Enron moment(spectatorworld.com)
spectatorworld.com
The fall of Sam Bankman-Fried is crypto’s Enron moment
https://spectatorworld.com/topic/sam-bankman-fried-crypto-enron-moment/
179 comments
This is the key to the crypto scam. It looks like it's complicated, and you have to be really smart to understand what's going on!
But it's not complicated at all.
Buy some crypto. Convince more people after you to buy it too - price goes up. If more people are selling than are buying, price goes down. Time your exit.
In the end, everyone loses - because there's always going to be more money going out (to pay the electricity bills and suchlike) than there is coming in.
If you're lucky, you might be able to get more money out than you put in. But it's pure luck in gambling on the timing, it's not about being smarter than other people.
But it's not complicated at all.
Buy some crypto. Convince more people after you to buy it too - price goes up. If more people are selling than are buying, price goes down. Time your exit.
In the end, everyone loses - because there's always going to be more money going out (to pay the electricity bills and suchlike) than there is coming in.
If you're lucky, you might be able to get more money out than you put in. But it's pure luck in gambling on the timing, it's not about being smarter than other people.
As was pointed out in a podcast I listened to this week, you’ve essentially described a Ponzi scheme. Fundamentally, making gains on crypto requires someone else showing up and putting money in so you can get yours out. It’s more obvious with NFTs because they’re not pretending to also be money.
He’s describing a speculative bubble, not a Ponzi scheme. By your definition any enterprise where money flows in and out and involves more than one party is a Ponzi scheme.
Nah.
1. If bitcoin didn't have transaction fees and you have unrolled every bitcoin transaction ever made, everyone would have the same amount of money they started with. This is called a zero sum game.
2. But it does have transaction fees so if you did the same in the real world then the miners would be ahead and everyone else would lose. This is called a negative sum game or a scam.
3. If you were to do the same to, say, every Intel stock, then you'd be ahead because of the dividends paid.
1. If bitcoin didn't have transaction fees and you have unrolled every bitcoin transaction ever made, everyone would have the same amount of money they started with. This is called a zero sum game.
2. But it does have transaction fees so if you did the same in the real world then the miners would be ahead and everyone else would lose. This is called a negative sum game or a scam.
3. If you were to do the same to, say, every Intel stock, then you'd be ahead because of the dividends paid.
This is just true if you assume the transactions have zero value which seems unlikely given that in general most transactions/commerce creates a lot of value.
This is silly. Way too many things would meet this standard for "scam"/"ponzi". Gold for example: it costs money to dig it out of the ground, and critically to keep it stored securely, insured, tested for purity, etc. Consider how much money the USA must spend keeping its gold stockpile safe! Those are pure drags on the system so indeed the total amount spent on gold must always be more than net proceeds from gold sales after accounting for cost of ownership.
I'm sure there are many such examples.
I'm sure there are many such examples.
A ponzi scheme can turn into a roughly zero sum game if there isn't a rush but instead stable behavior over hundreds of years. Which is exactly what you describe with gold.
Plus, gold actually does have some industrial uses so its value is actually somewhat greater than zero even if people one day woke up and didn't think it looked good for jewelry :P
Plus, gold actually does have some industrial uses so its value is actually somewhat greater than zero even if people one day woke up and didn't think it looked good for jewelry :P
This is a shallow and narrow way to view crypto, and describes the typical incurious HN view that crypto is just a big ponzi.
Another way to view it, is as a digital economy running on a different set of technologies. You don't need to "invest" or "time the market" or anything, you just buy ETH to use it as a gas token.
Buy some ETH, an amount you are OK to write to zero like you would a hamburger or movie ticket purchase. Move the ETH off a CEX into your own self custody wallet to understand what it means to hold an asset with nothing but a private key. Convert it to stable coins with DEX like Uniswap, to avoid thinking about price. Send them to and fro, use DeFi, buy a ENS domain. It might cost you $10-50 total but you will probably come out of the experience with a better understanding of crypto, and you might also start to see traditional banking infrastructure differently, maybe slower or less verifiable or less secure or too centralized or too hard to build programmable interfaces on top of.
Another way to view it, is as a digital economy running on a different set of technologies. You don't need to "invest" or "time the market" or anything, you just buy ETH to use it as a gas token.
Buy some ETH, an amount you are OK to write to zero like you would a hamburger or movie ticket purchase. Move the ETH off a CEX into your own self custody wallet to understand what it means to hold an asset with nothing but a private key. Convert it to stable coins with DEX like Uniswap, to avoid thinking about price. Send them to and fro, use DeFi, buy a ENS domain. It might cost you $10-50 total but you will probably come out of the experience with a better understanding of crypto, and you might also start to see traditional banking infrastructure differently, maybe slower or less verifiable or less secure or too centralized or too hard to build programmable interfaces on top of.
This is too cynical of a take for me. I fell down the rabbit hole after reading/watching some of Vitalik's writing years ago. I think it's worth spending a small, insignificant amount to play around with some apps that have a genuine purpose. These days I'm most interested in gitcoin.co grants and the use of quadratic funding to support public goods (eg: open source software). You can read a summary write-up of a previous round [here](https://vitalik.ca/general/2020/10/18/round7.html) if curious.
I can't tell if your response is satire or if we've really hit this level of insanity and lack of self awareness.
Sounds sensible to me. Can you please elaborate? Otherwise your reply is of 0 value
> I've had a hard time deciding whether the proponents really understand it (and all of its nuances) or if pretending you understand it in fact part of the game.
Along those lines, it always seemed like an Emperor's New Clothes kind of scam to me ("These are the finest hashes!"). There was always this dialog in my head when the crypto bros would extol it's virtues that went something like "Wait, it's just a hash, right? But what if they're on to something? Nah, they're not onto something... but they seem to be making money... but it seems like a ponzi scheme where the people who got in early can cash out, but the people who jump in later lose money... c'mon, how is it not a ponzi?"
> I don't understand crypto (didn't understand derivatives either)
Never invest in something you don't understand. That seems to have worked out for you as you didn't get caught up in it.
Along those lines, it always seemed like an Emperor's New Clothes kind of scam to me ("These are the finest hashes!"). There was always this dialog in my head when the crypto bros would extol it's virtues that went something like "Wait, it's just a hash, right? But what if they're on to something? Nah, they're not onto something... but they seem to be making money... but it seems like a ponzi scheme where the people who got in early can cash out, but the people who jump in later lose money... c'mon, how is it not a ponzi?"
> I don't understand crypto (didn't understand derivatives either)
Never invest in something you don't understand. That seems to have worked out for you as you didn't get caught up in it.
> And there's something about crypto though where the proponents almost revel in other's ignorance. I've had a hard time deciding whether the proponents really understand it (and all of its nuances) or if pretending you understand it in fact part of the game.
You are projecting your insecurity - don't focus on the assholes. Most people actually being productive in the blockchain space want you to learn. You are right to think there are lots of marketers/sellers who don't understand what is going on. Listen to the engineers who are talking about the details on discord and on their blogs, not the idiots on Twitter trying pump their bags.
> In order to play the crypto game you have to learn this absurd set of rules.
This is true - people who are playing the crypto game are trying to invent new rules for how society should operate. This is why some things that happen in the crypto world seem incredibly stupid or useless. People are working with different fundamental assumptions.
You are projecting your insecurity - don't focus on the assholes. Most people actually being productive in the blockchain space want you to learn. You are right to think there are lots of marketers/sellers who don't understand what is going on. Listen to the engineers who are talking about the details on discord and on their blogs, not the idiots on Twitter trying pump their bags.
> In order to play the crypto game you have to learn this absurd set of rules.
This is true - people who are playing the crypto game are trying to invent new rules for how society should operate. This is why some things that happen in the crypto world seem incredibly stupid or useless. People are working with different fundamental assumptions.
> I don't understand crypto (didn't understand derivatives either). I have worried that my ignorance will cost me in investing — that people smarter than me are going to make bank while I'm derp-derping with my index funds.
Crypto requires a constant influx of new investment to continue making that number go up.
The FOMO narrative gets pushed hard for this reason. As long as regular investors are convinced they have to invest in crypto or else they'll miss out, the money continues to flow into crypto.
The problem with these collapses is that it breaks the narrative and makes people wake up to the reality of the game. That's one of the reasons the crypto industry is moving hard and fast to distance themselves from FTX and SBF.
Crypto requires a constant influx of new investment to continue making that number go up.
The FOMO narrative gets pushed hard for this reason. As long as regular investors are convinced they have to invest in crypto or else they'll miss out, the money continues to flow into crypto.
The problem with these collapses is that it breaks the narrative and makes people wake up to the reality of the game. That's one of the reasons the crypto industry is moving hard and fast to distance themselves from FTX and SBF.
The FOMO narrative gets pushed hard for this reason. As long as regular investors are convinced they have to invest in crypto or else they'll miss out, the money continues to flow into crypto.
And oh, was it pushed hard by FTX. The infamous "Don't be like Larry" Super Bowl commercial [1] was from FTX.
The FTX bankruptcy has somewhere upwards of a million creditors.
[1] https://www.youtube.com/watch?v=wUlE02RU1AE
And oh, was it pushed hard by FTX. The infamous "Don't be like Larry" Super Bowl commercial [1] was from FTX.
The FTX bankruptcy has somewhere upwards of a million creditors.
[1] https://www.youtube.com/watch?v=wUlE02RU1AE
In general, the issue with cryptocurrency is there is very little actual economy around it (that is, buying and selling actual goods, not just exchanging for different cryptocurrencies and tokens), so much of the value isn't really backed by anything.
It's mostly just speculation, which becomes a "greater fool" thing - you're only going to win if you time it right, there's enough pumping happening for you to profit, and get out before the next crash.
It's mostly just speculation, which becomes a "greater fool" thing - you're only going to win if you time it right, there's enough pumping happening for you to profit, and get out before the next crash.
> you're only going to win if you time it right
People who try timing it will always fail. I tried trading and timing, and if I compare that to just holding bitcoin and no timing or no altcoin trading, I would have ended up with more.
I'm not the only one it seems due to the famous HODL.
Same as with the stock market, just buy and hold for a long time. Hard to beat that strategy.
People who try timing it will always fail. I tried trading and timing, and if I compare that to just holding bitcoin and no timing or no altcoin trading, I would have ended up with more.
I'm not the only one it seems due to the famous HODL.
Same as with the stock market, just buy and hold for a long time. Hard to beat that strategy.
I agree with your first line. Almost everybody who try to time it will fail, I should have made that clear. Mostly the people who "timed it right" did it by accident.
But I disagree with the last bit. Holding is a terrible strategy with crypto now, because there's no economy to buffer it, and there are so many scams that drop the price of basically all the cryptocurrency market when they collapse. There are still more after FTX to go.
There was a time when speculating and holding for enough time could make ridiculous amounts of money. But at this point the only way to win is not to play (or be one of the scammers and do a rug-pull, but please don't).
But I disagree with the last bit. Holding is a terrible strategy with crypto now, because there's no economy to buffer it, and there are so many scams that drop the price of basically all the cryptocurrency market when they collapse. There are still more after FTX to go.
There was a time when speculating and holding for enough time could make ridiculous amounts of money. But at this point the only way to win is not to play (or be one of the scammers and do a rug-pull, but please don't).
> I don't understand crypto (didn't understand derivatives either). I have worried that my ignorance will cost me in investing — that people smarter than me are going to make bank while I'm derp-derping with my index funds.
There are two sides to crypto. There is the technology side (blockchains, cryptography, consensus) and there is the finance side, the financial products on the blockchain. If you're an engineer you'll easily understand the technology side but there's no way around spending a significant amount of time learning about (traditional) finance to understand how exchanges, derivatives, market making, monetary policy, loans, leverage, and so on work. All of the same ideas apply to crypto.
This "absurd set of rules" mostly applies to the technology side, not the finance side. If you strip out all the marketing, the financial products you find on the blockchain are no different from the products you find in traditional financial institutions, with maybe a few exceptions like AMMs or stablecoins.
My experience has been that the people who understand crypto and who are successful are NOT the people who understand technology, but mostly the people who come from a finance background and can pattern-match their experience to crypto.
There are two sides to crypto. There is the technology side (blockchains, cryptography, consensus) and there is the finance side, the financial products on the blockchain. If you're an engineer you'll easily understand the technology side but there's no way around spending a significant amount of time learning about (traditional) finance to understand how exchanges, derivatives, market making, monetary policy, loans, leverage, and so on work. All of the same ideas apply to crypto.
This "absurd set of rules" mostly applies to the technology side, not the finance side. If you strip out all the marketing, the financial products you find on the blockchain are no different from the products you find in traditional financial institutions, with maybe a few exceptions like AMMs or stablecoins.
My experience has been that the people who understand crypto and who are successful are NOT the people who understand technology, but mostly the people who come from a finance background and can pattern-match their experience to crypto.
I think reading warren buffet’s letters to shareholders of berkshire hathaway is definitely worth it, there’s a lot of common sense about companies and investing, and kind of proves the feynman quote about “you don’t really understand a topic unless you can explain it to a motivated freshman” (“freshman” = 1st year undergraduate student in th US) . By that standard, Buffet clearly does understand finance, the ones who can’t explain either don’t really understand, or, as you implied, are trying to scam you
> the in-crowd seem to get it, seem to understand it.
absolutely not speaking of anyone on HN (where people seem more learned and aware) but most of those who 'seem to understand it' on Twitter / Reddit etc. are just folks who have put in their money after reading fancy terms and want to 'pump' a given coin. So that they can validate their investments to themselves.
This is just my personal opinion so there's that. I have been wrong about lots of things, could be about this as well :)
absolutely not speaking of anyone on HN (where people seem more learned and aware) but most of those who 'seem to understand it' on Twitter / Reddit etc. are just folks who have put in their money after reading fancy terms and want to 'pump' a given coin. So that they can validate their investments to themselves.
This is just my personal opinion so there's that. I have been wrong about lots of things, could be about this as well :)
I have some rudimentary knowledge of crypto. I think better than most.
I don't understand some of the more complicated concepts like DeFi and flash loans. I mean I could explain some of it but I didn't actually understand it.
That being said, I decided to learn more and got some of that knowledge from Twitter. It's a terrible place to learn because the education is laced with propaganda and it's very difficult to tease out. Something about it makes you put down guards that you otherwise have.
I stopped using Twitter for other reasons and something really interesting happened. It felt like I was coming out of hypnosis. My optimism towards crypto began to fade - probably because outside of crypto circles the general sentiment is that it's a scam.
A broken clock is right 2x a day and it's important to remember you're likely no smarter or dumber because you bought or avoided crypto.
I don't understand some of the more complicated concepts like DeFi and flash loans. I mean I could explain some of it but I didn't actually understand it.
That being said, I decided to learn more and got some of that knowledge from Twitter. It's a terrible place to learn because the education is laced with propaganda and it's very difficult to tease out. Something about it makes you put down guards that you otherwise have.
I stopped using Twitter for other reasons and something really interesting happened. It felt like I was coming out of hypnosis. My optimism towards crypto began to fade - probably because outside of crypto circles the general sentiment is that it's a scam.
A broken clock is right 2x a day and it's important to remember you're likely no smarter or dumber because you bought or avoided crypto.
I think the 'Intro to Bankless' podcast is a really good way to start learning the nuances. There are many parts of the crypto community that are very welcoming to newbies. /r/EthFinance is one of the best.
Crypto is indeed very complex. You have everything from AMMs to no-loss lotteries to Arweave perpetual endowments. I spend 10 hours a day in crypto finance and don't understand all of the nuances, so I can see how it might be intimidating. The best way to learn IMO is send a few dollars to Polygon to play with different protocols like Uniswap, Aave, PoolTogether, things like that.
Crypto is indeed very complex. You have everything from AMMs to no-loss lotteries to Arweave perpetual endowments. I spend 10 hours a day in crypto finance and don't understand all of the nuances, so I can see how it might be intimidating. The best way to learn IMO is send a few dollars to Polygon to play with different protocols like Uniswap, Aave, PoolTogether, things like that.
> Crypto is indeed very complex... I spend 10 hours a day in crypto finance and don't understand all of the nuances
Which is why it will never succeed in its current form.
Which is why it will never succeed in its current form.
Yes, because software engineers understand every nuance about operating systems and financial advisors understand every nuance of the global financial system...
I'm making the point that it's extremely complicated and not to worry about knowing everything.
I'm making the point that it's extremely complicated and not to worry about knowing everything.
What I never understood about crypto finance is how it shall replace tradfi when it can only offer overcollateralised loans?
It only offers overcollateralized "trustless" loans (ie instant with no credit check or KYC). However, KYC'd undercollateralized lending protocols are making some headway. The most popular one currently is called Maple, wherein delegates can perform credit checks on borrowers, and provide first-loss capital, while lenders can be you and me.
One can imagine that a "crypto finance" mortgage would look similar to a traditional mortgage in that credit checks and property assessments are needed, however when on-chain it could be done with more transparency (and having just gone through the process I can tell you it is NOT transparent) - the biggest benefit would be borrowing money from a real pool of user capital as opposed to a bank, so real people can earn 7% APY on their money backed by a basket of home loans, with a very transparent middleman. Does that make sense?
One can imagine that a "crypto finance" mortgage would look similar to a traditional mortgage in that credit checks and property assessments are needed, however when on-chain it could be done with more transparency (and having just gone through the process I can tell you it is NOT transparent) - the biggest benefit would be borrowing money from a real pool of user capital as opposed to a bank, so real people can earn 7% APY on their money backed by a basket of home loans, with a very transparent middleman. Does that make sense?
that's mostly product churn. yes, definitely part of crypto, but people don't have to understand each and every new thing in crypto to understand crypto.
The crypto game is all about potential value.
Both opponents and propontents can be so sure about themselves, either that it's obvious it's all a scam or obvious it has value and huge amounts in the future.
The fact of the matter is that nobody can tell at this moment (I'm sure plenty of you will claim they do).
If you cannot see the potential value yourself, I would advise to stay away from it.
And if there will be something in the future where you can see the potential value, and is high risk/high potential return, you could invest 1% of your portfolio into that one. Worst case you lose 1%, best case you gain 100%. The latter is how it went with crypto, but it could have just as easily turned the other way.
I guess investing in startups is the same, although you need a shitload of money to get into that game.
Both opponents and propontents can be so sure about themselves, either that it's obvious it's all a scam or obvious it has value and huge amounts in the future.
The fact of the matter is that nobody can tell at this moment (I'm sure plenty of you will claim they do).
If you cannot see the potential value yourself, I would advise to stay away from it.
And if there will be something in the future where you can see the potential value, and is high risk/high potential return, you could invest 1% of your portfolio into that one. Worst case you lose 1%, best case you gain 100%. The latter is how it went with crypto, but it could have just as easily turned the other way.
I guess investing in startups is the same, although you need a shitload of money to get into that game.
replace "crypto" with "tech". That's how much of the world thinks about tech. It's not surprising people get bamboozled in both.
> In order to play the crypto game you have to learn this absurd set of rules.
Bitcoin has a value that rises and falls on a (spectacularly) speculative basis. Apart from the complications of buying/selling/holding Bitcoin, it is no different to trading in something else with perceived value that has active buyers and sellers and which has questionable intrinsic value.
However, there are numerous other schemes, derivatives, exchanges, faux lookalikes, messiahs, manipulators and fakes that make for those absurd rules.
Bitcoin has a value that rises and falls on a (spectacularly) speculative basis. Apart from the complications of buying/selling/holding Bitcoin, it is no different to trading in something else with perceived value that has active buyers and sellers and which has questionable intrinsic value.
However, there are numerous other schemes, derivatives, exchanges, faux lookalikes, messiahs, manipulators and fakes that make for those absurd rules.
I find Matt Levine and his column Money Stuff at Bloomberg precisely so valuable because this complicated dry stuff is explained simply and with a lot of humor. I don't know enough to know if it is over simplified or wrong but it seems correct and is very accessible. It probably won't help you invest in derivatives or understand options better than index funds, but that column is an interesting rare exception to the rule of finance being esoteric and inaccessible.
It removes a lot of unnecessary nuance, but by and large he knows as much, if not more, than any other asshole on the street.
Source: am an asshole.
Source: am an asshole.
can you give an example of nuance he left out? (I'm not reading every mail that comes in, and sometimes find his writing too verbose, but not really due to details, just to repeat/reiterate things, and mostly in the same - not too illustrative - way)
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What's your question about crypto?
At a high level, could a cryptocurrency be used as a normal currency? What would be the benefit of using a cryptocurrency? Is the goal to be used at a large scale globally or would it at best remain niche?
And behind "normal currency" I hide a lot of things that I don't know about. Does it has to be stable? Does it have to follow a real currency like the USD?
And behind "normal currency" I hide a lot of things that I don't know about. Does it has to be stable? Does it have to follow a real currency like the USD?
You can buy drugs on the dark net with them!
> could a cryptocurrency be used as a normal currency?
They mostly aren't suited to this. A desirable property in a normal currency is relative stability (generally with small, managed levels of inflation to encourage useful investment). But in order to bootstrap a cryptocurrency you need to get people interested in using it to establish a value, so you set up the currency in a way that disproportionately rewards early adopters and encourages speculation, to pull people in. This in turn makes it a lot less stable and you see where this is going
> What would be the benefit of using a cryptocurrency?
For those who are true-believers, the idea is that you have currency which is free from government manipulation, free from authority, is unstoppable, uncensorable, irreversible, may be anonymous etc etc.
For those of us who are not, most of those are actually negatives. Plus an honest evaluation of the largest cryptocurrencies often shows they don't fulfil these pipedreams anyway. Bitcoin, for instance, can be censored if wallet addresses are known and the government manages to get 'miners' onboard with a blacklist. Exchanges can refuse to accept deposited funds unless they come from known, KYC/AML compliant organisations. And given that mining BTC is a huge, expensive, energy and equipment intensive operation, there are not actually all that many firms, so collusion is a definite possibility, and with about half the hash power they could collude to block transactions.
> Is the goal to be used at a large scale globally or would it at best remain niche?
There are as many aims as there are users. Some want complete freedom from government monetary interference, implying large scale use. Some want to revolutionise the finance sector and disenfranchise the established banks. Some are basically addicted to gambling. Some want to get rich, and see it as an easy way, or the only way. Some just want to facilitate 'dark' transactions (contraband of various forms).
> Does it has to be stable?
No, but there are so-called stablecoins which attempt to peg their value to normal currencies, specifically the US dollar. Some attempt to do this algorithmically - see Terra/Luna/UST and the chaos from that collapse earlier in the year. Most algortihmic stable coins are vulnerable to some sort of bank-run scenario.
Others attempt to do it by having their stablecoins backed 1:1 with the normal currency they are pegged to, the largest of these is "Tether" also known as USDT. They used to claim there was a dollar in a bank-account for every token issued, but they refused audit for years and eventually dropped the claim. They have various redemption barriers ($100k minimum payout, for example) to stop any sort of run from happening, and there are strong feelings in crypto communities and sceptic communities that they are playing fast and loose, and have perhaps backed a lot of their tokens retrospectively (create token, use it to buy an asset, now that token is backed) or purely manipulatively (giving out billions to friendly exchanges to use to prop up BTC prices without getting any more backing than an IOU).
> Does it have to follow a real currency like the USD?
That seems to be the gold standard here! Though stablecoins against other currencies probably exist, and I believe I heard about gold and silver backed stablecoins at some point. The problem with all of the backed ones is "Hey, I have this massive bank account, just sitting there backing my coin, surely nobody would notice if <shenanigans>"
They mostly aren't suited to this. A desirable property in a normal currency is relative stability (generally with small, managed levels of inflation to encourage useful investment). But in order to bootstrap a cryptocurrency you need to get people interested in using it to establish a value, so you set up the currency in a way that disproportionately rewards early adopters and encourages speculation, to pull people in. This in turn makes it a lot less stable and you see where this is going
> What would be the benefit of using a cryptocurrency?
For those who are true-believers, the idea is that you have currency which is free from government manipulation, free from authority, is unstoppable, uncensorable, irreversible, may be anonymous etc etc.
For those of us who are not, most of those are actually negatives. Plus an honest evaluation of the largest cryptocurrencies often shows they don't fulfil these pipedreams anyway. Bitcoin, for instance, can be censored if wallet addresses are known and the government manages to get 'miners' onboard with a blacklist. Exchanges can refuse to accept deposited funds unless they come from known, KYC/AML compliant organisations. And given that mining BTC is a huge, expensive, energy and equipment intensive operation, there are not actually all that many firms, so collusion is a definite possibility, and with about half the hash power they could collude to block transactions.
> Is the goal to be used at a large scale globally or would it at best remain niche?
There are as many aims as there are users. Some want complete freedom from government monetary interference, implying large scale use. Some want to revolutionise the finance sector and disenfranchise the established banks. Some are basically addicted to gambling. Some want to get rich, and see it as an easy way, or the only way. Some just want to facilitate 'dark' transactions (contraband of various forms).
> Does it has to be stable?
No, but there are so-called stablecoins which attempt to peg their value to normal currencies, specifically the US dollar. Some attempt to do this algorithmically - see Terra/Luna/UST and the chaos from that collapse earlier in the year. Most algortihmic stable coins are vulnerable to some sort of bank-run scenario.
Others attempt to do it by having their stablecoins backed 1:1 with the normal currency they are pegged to, the largest of these is "Tether" also known as USDT. They used to claim there was a dollar in a bank-account for every token issued, but they refused audit for years and eventually dropped the claim. They have various redemption barriers ($100k minimum payout, for example) to stop any sort of run from happening, and there are strong feelings in crypto communities and sceptic communities that they are playing fast and loose, and have perhaps backed a lot of their tokens retrospectively (create token, use it to buy an asset, now that token is backed) or purely manipulatively (giving out billions to friendly exchanges to use to prop up BTC prices without getting any more backing than an IOU).
> Does it have to follow a real currency like the USD?
That seems to be the gold standard here! Though stablecoins against other currencies probably exist, and I believe I heard about gold and silver backed stablecoins at some point. The problem with all of the backed ones is "Hey, I have this massive bank account, just sitting there backing my coin, surely nobody would notice if <shenanigans>"
No, cryptocurrency cannot be used as a normal currency. Nothing as easy as handing cash to someone else exists in cryptocurrency.
There's one giant benefit of using cryptocurrency and a few smaller niches. It is a currency of last resort to guard against hyperinflation or currency controls or for drugs. You should really only be using it if you can't turn your money into dollars but can earn cryptocurrency another way.
Check out an example like https://mission.org/hidden-in-plain-sight/bitcoin-a-lifeline... . In this case its easier to earn crypto as payment for doing work online than it is to be paid in USD.
The smaller niches include things like flash loans
Flash loans are actually new thing in the world but still pretty dangerous. You can get a massive massive loan (Think $1 billion) without putting anything down as long as you pay it back in the same transaction you get it. Ethereum can guarantee the loan and repayment succeeds so the borrower really can loan $1 billion. Of course this only works as long as whatever tool the loan contract is using to check that the borrower can repay $1 billion works. If not then the money is going to be stolen...
As for goal, there isn't one. Its whatever folks want it to be and a large number think ponzis are the goal...
As for normal currency, it does not need to be stable. See Venezuela as recent example. It typically can't follow a real currency like USD exactly. In fact trying to keep an exchange rate between a strong currency and something else the same almost always ends horrifically like https://en.wikipedia.org/wiki/Black_Wednesday
There's one giant benefit of using cryptocurrency and a few smaller niches. It is a currency of last resort to guard against hyperinflation or currency controls or for drugs. You should really only be using it if you can't turn your money into dollars but can earn cryptocurrency another way.
Check out an example like https://mission.org/hidden-in-plain-sight/bitcoin-a-lifeline... . In this case its easier to earn crypto as payment for doing work online than it is to be paid in USD.
The smaller niches include things like flash loans
Flash loans are actually new thing in the world but still pretty dangerous. You can get a massive massive loan (Think $1 billion) without putting anything down as long as you pay it back in the same transaction you get it. Ethereum can guarantee the loan and repayment succeeds so the borrower really can loan $1 billion. Of course this only works as long as whatever tool the loan contract is using to check that the borrower can repay $1 billion works. If not then the money is going to be stolen...
As for goal, there isn't one. Its whatever folks want it to be and a large number think ponzis are the goal...
As for normal currency, it does not need to be stable. See Venezuela as recent example. It typically can't follow a real currency like USD exactly. In fact trying to keep an exchange rate between a strong currency and something else the same almost always ends horrifically like https://en.wikipedia.org/wiki/Black_Wednesday
'USDC' which is a dollar-backed stablecoin issued by Circle/Coinbase is essentially the United States' de-facto digital currency. The advantage of a cryptocurrency vs a normal dollar in your bank account is that the ERC-20 version on Ethereum is 'programmable' - ie can be used in smart contracts for all sorts of things from borrowing/lending, to market making, to exchanging or staking. You could write a contract that drips USDC into an account to pay your bills, I dunno. There are endless possibilities. For me, I prefer to have my money in USDC because it provides a lot more flexibility on what I can do with it than simply having it in a bank account.
How much does it currently cost to send USDC between two accounts vs let's say something like Zelle?, and how long does it take to settle?
Good question:
Transaction cost: about $0.75 on Ethereum or $0.01 on Polygon at the moment - no size limits. Zelle is free up to ~$1,000 per day.
Settlement: 12 Seconds on Ethereum or 2 Seconds on Polygon, "instant" on Zelle. However many transfers on Zelle use ACH under the hood, so it may take 3-5 days to settle with your bank. If the recipient isn't enrolled in Zelle it may take 14 days for them to register to receive funds.
I'll note that I regularly move USD around as part of my job and have always found USDC to be a superior experience than bank transfers - especially because I can use smart contracts and custody tooling to set custom transaction policies on required approvers, whitelisted recipients, etc.
Transaction cost: about $0.75 on Ethereum or $0.01 on Polygon at the moment - no size limits. Zelle is free up to ~$1,000 per day.
Settlement: 12 Seconds on Ethereum or 2 Seconds on Polygon, "instant" on Zelle. However many transfers on Zelle use ACH under the hood, so it may take 3-5 days to settle with your bank. If the recipient isn't enrolled in Zelle it may take 14 days for them to register to receive funds.
I'll note that I regularly move USD around as part of my job and have always found USDC to be a superior experience than bank transfers - especially because I can use smart contracts and custody tooling to set custom transaction policies on required approvers, whitelisted recipients, etc.
Questions arise all the time when reading about crypto. I sadly don't have a list.
Just reading the thread here though reminded me of one: is crypto traceable by the feds or not? I've seen people very confidently declare both.
Just reading the thread here though reminded me of one: is crypto traceable by the feds or not? I've seen people very confidently declare both.
You can follow transactions on the blockchain, but the question is if you can tie that wallet to an identity. If the last wallet belongs to a CEX then it's likely they know the identity of the owner due to KYC regulations.
Tornado Cash previously broke that trail using asset pools, but that has been sanctioned now.
Tornado Cash previously broke that trail using asset pools, but that has been sanctioned now.
[deleted]
the ledger is public, so every transaction is traceable. maybe you create a wallet/entity thats not clearly linked to a person. you could probably claim its not traceable with a wallet address alone, you can see its transactions but have no idea who it is. at some point in the future or past you interact with the real world, like say sell crypto and withdraw USD, or start by buying crypto with USD. at that point they link that entity with a person(exchanges generally have to follow Know Your Customer rules), and can trace the transactions to the person through the public ledger.
In general the ledger of all transactions is public. But it’s like all of the transactions are tied to a random id. So to unmask a person you have to find at least one transaction that identifies the person tied to the id. So you can remain anonymous if you try really hard, but make one mistake and your whole history can be unraveled and known.
In general it is considerably easier to unmask people using crypto than other methods because perfect security is hard (criminals are dumb).
In general it is considerably easier to unmask people using crypto than other methods because perfect security is hard (criminals are dumb).
It depends on the specific protocol (aka blockchain or token) you're using. For instance, bitcoin is very simply publicly visible, each transaction is broadcast in the clear and you can trace inputs and outputs online [0]
Other protocols, such as zcash, specifically obfuscate the inputs and outputs using cryptography, in ways that I'm not specifically sure how to explain, but are supposed to work.
In some ways to me this is unsurprising in a way different from the ponzi nature of crypto. I can't explain Ed25519 either, and I'd also get bogged down reading a paper explaining it. I can get my head around the basics of btc and pre-proof-of-stake ethereum though, this[1] 3Blue1Brown video went a long way.
Definitely not going to disagree that lots of tokens are ponzis, and lots of the tech and promises are imaginary vaporware. But there are some real pieces of tech in the mix too.
[0] https://blockstream.info/block/00000000000000000003590ca79f7...
[1] https://www.youtube.com/watch?v=bBC-nXj3Ng4&vl=en
Other protocols, such as zcash, specifically obfuscate the inputs and outputs using cryptography, in ways that I'm not specifically sure how to explain, but are supposed to work.
In some ways to me this is unsurprising in a way different from the ponzi nature of crypto. I can't explain Ed25519 either, and I'd also get bogged down reading a paper explaining it. I can get my head around the basics of btc and pre-proof-of-stake ethereum though, this[1] 3Blue1Brown video went a long way.
Definitely not going to disagree that lots of tokens are ponzis, and lots of the tech and promises are imaginary vaporware. But there are some real pieces of tech in the mix too.
[0] https://blockstream.info/block/00000000000000000003590ca79f7...
[1] https://www.youtube.com/watch?v=bBC-nXj3Ng4&vl=en
Yeah they get it's a rug pull/ ponzi scheme. The more people they lure in, the more suckers there are to buy their coins and the more they money they will make.
It's all shit man, all the hype is to lure in more sucker bagholders. Who will keep driving the price up.
It's all shit man, all the hype is to lure in more sucker bagholders. Who will keep driving the price up.
I was involved in the very early Bitcoin days, and it started for me as something else to do with lots of spare GPU cycles, then I started learning about the underlying tech, which I thought was quite an elegant solution for p2p trustless ledger. I still think it is.
I have not been involved for a long time though, as the original feelings I got from those early days and the community back then seems to have changed completely. Now its all bullshit shell games and scams.
I have not been involved for a long time though, as the original feelings I got from those early days and the community back then seems to have changed completely. Now its all bullshit shell games and scams.
> Now its all bullshit shell games and scams.
Do you also consider projects like Monero to be scams?
Do you also consider projects like Monero to be scams?
FTX's failure is hardly Crypto's failure. FTX is a centralized exchange. Crypto, at least when it was created, is/was against centralization.
But yes, cryto industry is much more centralized than before. Centralization without regulation is the root of all evils.
We don't need deep tech understanding of Cryto to know that centralization without regulation is problematic. History of finance has proven it again and again and again.
Those who trusted FTX are either dumb or greedy. Perhaps both.
As a crypto adopter, the best we can do is:
1. Stay away from unregulated centralized company like FTX, Binance, Tether, etc. 2. Stay dicentralized.
But yes, cryto industry is much more centralized than before. Centralization without regulation is the root of all evils.
We don't need deep tech understanding of Cryto to know that centralization without regulation is problematic. History of finance has proven it again and again and again.
Those who trusted FTX are either dumb or greedy. Perhaps both.
As a crypto adopter, the best we can do is:
1. Stay away from unregulated centralized company like FTX, Binance, Tether, etc. 2. Stay dicentralized.
Derivatives have some financial uses for normal investors (eg if you want to hedge your bets against short term tail risk etc.), but crypto tokens really don't. I wouldn't sweat it.
It's not that complicated - you get a record in a globally distributed trustless database that say you own something, and as new records are added to the database stuff gets moved around.
It's not that complicated - you get a record in a globally distributed trustless database that say you own something, and as new records are added to the database stuff gets moved around.
There are layers to crypto's predominant "discourse" depending on which wave you came in through. The earliest waves were all utopian technologists, libertarians, and Silk Road users. The ICO era brought in more people who had played with penny stocks or forex, and imposed some of those "gamblers and swindlers" attitudes. And as talk of "institutional crypto" started popping up you got a much more Wall-Street influenced crowd that funded conspicuously large endeavors with intentionally obfuscating and centralizing properties. For the most part, none of these people in the later waves perceived the tech as a good that could be deployed for societal coordination(since what distributed ledgers ultimately do is just another method of organizing information), they just saw a zero-sum game they could compete and try to "win" in by ultimately exiting to dollars, or by building a large organization in the "crypto industry"(utter nonsense - it's ruled by protocols, and the downfall of FTX further demonstrates that).
People who just held BTC in their own wallets over all of these waves, didn't lose custody of the keys or sell, did marvellously well. Internationally, BTC remains useful to countries with unstable currencies; not because ordinary people are all interested in holding it for its own sake, but because it enables banking and payment services outside of the traditional system, which means that in some parts of the world you can go to "a guy in the market with some phones" and he can set you up with options for exchanging currency, getting remittances, etc. Often USD is used on one side of the trade rather than a native crypto asset; it's crypto being used as a pragmatic tool rather than a manifest ideology.
In contrast, people who really try to trade the market actively either have an "angle" for getting an information advantage(e.g. they possess some data or influence, in the way that SBF did), or they are most likely gambling with leveraged bets and getting sliced to pieces by highly optimized trading bots.
If you take a position in crypto as a simpleton(which is my standpoint, and shouldn't be taken as gospel investment advice), it's better to move slowly, accept absurdly high volatility and just aim to survive; do not use products that "give you some help with that"; assume the tech is sharp-edged, use official wallets, and keep careful track of the keys. Many people who work on crypto don't actually own a lot of it.
People who just held BTC in their own wallets over all of these waves, didn't lose custody of the keys or sell, did marvellously well. Internationally, BTC remains useful to countries with unstable currencies; not because ordinary people are all interested in holding it for its own sake, but because it enables banking and payment services outside of the traditional system, which means that in some parts of the world you can go to "a guy in the market with some phones" and he can set you up with options for exchanging currency, getting remittances, etc. Often USD is used on one side of the trade rather than a native crypto asset; it's crypto being used as a pragmatic tool rather than a manifest ideology.
In contrast, people who really try to trade the market actively either have an "angle" for getting an information advantage(e.g. they possess some data or influence, in the way that SBF did), or they are most likely gambling with leveraged bets and getting sliced to pieces by highly optimized trading bots.
If you take a position in crypto as a simpleton(which is my standpoint, and shouldn't be taken as gospel investment advice), it's better to move slowly, accept absurdly high volatility and just aim to survive; do not use products that "give you some help with that"; assume the tech is sharp-edged, use official wallets, and keep careful track of the keys. Many people who work on crypto don't actually own a lot of it.
In this case the emperor has no clothes, it really is fraud all the way down.
You might want to start reading Matt Levine’s excellent Bloomberg column, he has a knack for simplifying things. He also published an excellent primer on crypto.
You might want to start reading Matt Levine’s excellent Bloomberg column, he has a knack for simplifying things. He also published an excellent primer on crypto.
Can't say I care too much about FTX's woes. Nonetheless, this article has some janky moments. The author cites an unnamed friend "who is deeply involved in [the crypto] industry" when saying CZ played a master stroke against SBF. Get a real source or at least demonstrate that your "friend" has an opinion worth 2 cents.
Maybe CZ did outplay SBF, but aside from the optics it doesn't seem anywhere that salacious. As was summed up earlier today in an NPR segment on this story "airlines don't compete on safety." In other words, it is in the interest of every exchange that the exchange industry is on the whole viewed as being comprised of trustworthy actors. Crashing FTX doesn't seem an optimal move given the already precarious state of the crypto industry these days.
Speaking of optics, the author also made a nonsensical analogy "more opaque than a dog with glaucoma" when describing the inner workings of FTX. Quite certain they meant cataracts – the clouding of the lens of the eye – not glaucoma, which is damage to the optic nerve.
Maybe CZ did outplay SBF, but aside from the optics it doesn't seem anywhere that salacious. As was summed up earlier today in an NPR segment on this story "airlines don't compete on safety." In other words, it is in the interest of every exchange that the exchange industry is on the whole viewed as being comprised of trustworthy actors. Crashing FTX doesn't seem an optimal move given the already precarious state of the crypto industry these days.
Speaking of optics, the author also made a nonsensical analogy "more opaque than a dog with glaucoma" when describing the inner workings of FTX. Quite certain they meant cataracts – the clouding of the lens of the eye – not glaucoma, which is damage to the optic nerve.
CZ could have gotten paid $1B or whatever many FTT they owned for $22/coin. That would have still weakened FTX and Alameda a ton. Them having to pay out so much of that money would have put them closer to the tipping point and gaining over a billion for CZ.
Obviously removing a top competitor that’s doing straight up robbery is something that should always be done. We are talking about awful actions.
Obviously removing a top competitor that’s doing straight up robbery is something that should always be done. We are talking about awful actions.
[deleted]
Really in this case CZ put a bullet in him as sure as he was holding a real gun. The need to build "trust" by not absolutely ruining one of his competitors didn't factor in here, because there is no need.
He's still posting on Twitter as though this is going to blow over. I don't get it. Is there a chance nothing is going to happen? What kind of advice is he getting?
"I’m meeting in-person with regulators and working with the teams to do what we can for customers." https://twitter.com/SBF_FTX/status/1592604699693580289
"So what can I try to do? Raise liquidity, make customers whole, and restart." https://twitter.com/SBF_FTX/status/1592710177152995328
"I’m meeting in-person with regulators and working with the teams to do what we can for customers." https://twitter.com/SBF_FTX/status/1592604699693580289
"So what can I try to do? Raise liquidity, make customers whole, and restart." https://twitter.com/SBF_FTX/status/1592710177152995328
His best chance of getting the least punishment is cooperating to the max.
Or being the second biggest political donor to the political party in power at the moment. Surely that doesn't hurt...
He seems to be deep into denial. I can’t imagine what’s going on in his mind right now.
I think that based on his enthusiasm to invest in Elon's takeover of Twitter he thought he was a big dog. He thinks he's a celebrity billionaire. He's still calling people to invest in his companies, which is like lighting money on fire because it's all going to be withdrawn immediately.
He is clueless.
Well there is people who would still invest in him with the condition of tighter control / regulation despite already losing money in this shitshow :-D. But it's probably just a crazy coping mechanism for being involved:
https://cryptopotato.com/despite-ftx-bankruptcy-kevin-oleary...
https://cryptopotato.com/despite-ftx-bankruptcy-kevin-oleary...
I would pay to hear some of these conversations of him asking for more money right now. I wonder if people just start laughing or try to tell him the truth.
> based on his enthusiasm to invest in Elon's takeover of Twitter
Could you explain what you meant by this?
Could you explain what you meant by this?
>I can’t imagine what’s going on in his mind right now.
Massive amounts of Selegiline, probably.
Massive amounts of Selegiline, probably.
That’s all I can conjure too. Or he’s calling in his political donations, etc.
"these drugs made me dumb"
I’d probably just up my dosage if I were in his position. This looks like a terrible moment to sober up.
It appears that he may have upped his dosage. And him acting like he can recover is from the drugs. To act like this after clearly committing crimes visible by tens of millions of people, and just getting torn apart for it online. I wish I was this confident!
> I wish I was this confident!
I’m over a decade sober, but fyi this is available to you if you just buy some meth or bath salts!
I’m over a decade sober, but fyi this is available to you if you just buy some meth or bath salts!
He thinks he can just Trump right through it.
If you just went from "famous decabillionaire" to "probable felon" in the span of a week, you'd probably be in cope mode too
I don't understand how he could hope to raise money if his idea is "We return it to the people I stole from." I have no doubt that, like Adam Neumann, there is some circumstance where VCs would give him another turn, but it would be because those VCs thought they could make money, not because they want to donate their money to make SBF's victims whole.
If any of the reports about Bankman-Fried's drug use are true, that might help explain his behavior.
2 points:
1. His tweet thread made me throw up in my mouth a bit. Blaming it on "liquidity" is laughable. Liquidity problems would be like "I own a lot of real estate and it would take me a long time to sell". Alameda's problem was a huge chunk of its balance sheet was FTT - it was fundamentally impossible to ever liquidate those tokens without guaranteeing to tank the price of FTT. Never mind the whole issue that customer funds were never legally his to loan to Alameda in the first place, regardless of crypto regulations or lack thereof. What happened to customer funds was simply theft.
2. I'm not a psychologist, so I don't necessarily want to misuse the term "sociopath", but I have seen this trait in some people that is closely linked to a lack of conscience. That is, I would have never been able to do what SBF and gang did by stealing customer funds to prop up Alameda. And it's not because I'm some wonderfully moral person, it's because I would have become physically ill with guilt and lack of sleep. This is also why I'll never be able to run a large company or handle billions of assets - it would just be too much stress for me. There is a fine line between needing to have a healthy detachment from consequences you may cause, and being a sociopath. The more I hear from SBF just the more I'm convinced he's not on the "healthy detachment" side of things.
1. His tweet thread made me throw up in my mouth a bit. Blaming it on "liquidity" is laughable. Liquidity problems would be like "I own a lot of real estate and it would take me a long time to sell". Alameda's problem was a huge chunk of its balance sheet was FTT - it was fundamentally impossible to ever liquidate those tokens without guaranteeing to tank the price of FTT. Never mind the whole issue that customer funds were never legally his to loan to Alameda in the first place, regardless of crypto regulations or lack thereof. What happened to customer funds was simply theft.
2. I'm not a psychologist, so I don't necessarily want to misuse the term "sociopath", but I have seen this trait in some people that is closely linked to a lack of conscience. That is, I would have never been able to do what SBF and gang did by stealing customer funds to prop up Alameda. And it's not because I'm some wonderfully moral person, it's because I would have become physically ill with guilt and lack of sleep. This is also why I'll never be able to run a large company or handle billions of assets - it would just be too much stress for me. There is a fine line between needing to have a healthy detachment from consequences you may cause, and being a sociopath. The more I hear from SBF just the more I'm convinced he's not on the "healthy detachment" side of things.
-- his NYT article was... O.o
"“People can say all the mean things they want about me online,” he said. “In the end, what’s going to matter to me is what I’ve done and what I can do.”
He has also found other ways to occupy his time in recent days, playing the video game Storybook Brawl, though less than he usually does, he said. “It helps me unwind a bit,” he said. “It clears my mind.”
Shortly before the interview, Mr. Bankman-Fried had posted a cryptic tweet: the word “What.” Then he had tweeted the letter H. Asked to explain, Mr. Bankman-Fried said he planned to post the letter A and then the letter P. “It’s going to be more than one word,” he said. “I’m making it up as I go.”
So he was planning a series of cryptic tweets? “Something like that.”
But why? “I don’t know,” he said. “I’m improvising. I think it’s time.”"
..uh.. huh --
"“People can say all the mean things they want about me online,” he said. “In the end, what’s going to matter to me is what I’ve done and what I can do.”
He has also found other ways to occupy his time in recent days, playing the video game Storybook Brawl, though less than he usually does, he said. “It helps me unwind a bit,” he said. “It clears my mind.”
Shortly before the interview, Mr. Bankman-Fried had posted a cryptic tweet: the word “What.” Then he had tweeted the letter H. Asked to explain, Mr. Bankman-Fried said he planned to post the letter A and then the letter P. “It’s going to be more than one word,” he said. “I’m making it up as I go.”
So he was planning a series of cryptic tweets? “Something like that.”
But why? “I don’t know,” he said. “I’m improvising. I think it’s time.”"
..uh.. huh --
It's funny they unwittingly plugged FTX's game and didn't mention that he's been seen playing League of Legends.
He spent 4 hours playing LoL on Saturday
Im not defending him, but you can imagine a situation where a lot of conversations are happening in the background whilst wild speculation takes off online.
From the balance sheets circulating, there are still a lot of assets there. Some of it is fantasy but some of it is real but various levels of liquidity.
Im sure FTX, Sam and everyone associated is looking at how they can turn an $8 billion hole into a $3 billion hole.
I don’t think he or FTX are coming back because the reputation is destroyed, but I don’t see this ending in an $8 billion total loss.
I am tempted to put my money where my mouth is and buy some FTT for a somewhat positive announcement soon, but maybe that’s just degenerate gambling!
From the balance sheets circulating, there are still a lot of assets there. Some of it is fantasy but some of it is real but various levels of liquidity.
Im sure FTX, Sam and everyone associated is looking at how they can turn an $8 billion hole into a $3 billion hole.
I don’t think he or FTX are coming back because the reputation is destroyed, but I don’t see this ending in an $8 billion total loss.
I am tempted to put my money where my mouth is and buy some FTT for a somewhat positive announcement soon, but maybe that’s just degenerate gambling!
He paid fealty to the regime and tens of millions of dollars of bribes and protection money to the ruling class.
Provided he told all the right people to get out while the getting was good, he's got good reason to be confident. I bet he knows about a lot of skeletons in closets too, although people tend to wind up not killing themselves in prison when they try to use that kind of leverage against the mob, so he'd be well advised to take his flailing about the wrists with a sauteed lettuce leaf if it came to that.
Provided he told all the right people to get out while the getting was good, he's got good reason to be confident. I bet he knows about a lot of skeletons in closets too, although people tend to wind up not killing themselves in prison when they try to use that kind of leverage against the mob, so he'd be well advised to take his flailing about the wrists with a sauteed lettuce leaf if it came to that.
I'm so frustrated right now that he's still not arrested while in the sister thread a bicyclist was arrested for touching a car that was hiding its license plate.
The government is doing the opposite that it should be doing.
The government is doing the opposite that it should be doing.
I wonder if any of the politicians who took his crypto money are going to give any of it back. Looks like a few are, but some are remaining silent:
https://www.msn.com/en-us/news/politics/democrats-took-his-s...
https://www.msn.com/en-us/news/politics/democrats-took-his-s...
> Rep. Ruben Gallego (D-AZ) said he spent money given to him by Bankman-Fried to drive turnout for Andrea Salinas, a Latina running for Congress in Oregon—whom Bankman-Fried spent millions to defeat during the district’s Democratic primary.
> “So, I think I’ve paid it back,” Gallego said.
I don't think he has the same definition of "paid it back" as most people do.
> “So, I think I’ve paid it back,” Gallego said.
I don't think he has the same definition of "paid it back" as most people do.
I don’t understand the pressure to give bad people their money back. What’s it supposed to accomplish? I’m not sure it should even be legal to send money to SBF. It’s seeming more and more likely that he’s head of a criminal conspiracy.
If the money was stolen, it was never SBF's to give. The law does have provisions that can force the clawback of stolen funds. But because we're talking about politicians here, I don't think anybody believes the law will be enforced equally to them.
It's supposed to prove that you're better than they are. It's not supposed to accomplish anything other than that.
Looks like some of the politicians are re-gift the donations to charity.
https://fortune.com/crypto/2022/11/15/politicians-sam-bankma...
https://fortune.com/crypto/2022/11/15/politicians-sam-bankma...
"There followed a jujitsu move by which the Binance chief created a market run on FTX."
There seems to be an attempt to sell a narrative which blames Binance for this. That's bogus. We know now that FTX was so looted and so broke it was doomed. The only question was what would pop the bubble.
This is straight theft of customer assets, like Madoff. As with Madoff, once there was a downturn, it all came apart.
There seems to be an attempt to sell a narrative which blames Binance for this. That's bogus. We know now that FTX was so looted and so broke it was doomed. The only question was what would pop the bubble.
This is straight theft of customer assets, like Madoff. As with Madoff, once there was a downturn, it all came apart.
Let's imagine Bernie Madoff telling the feds, "Hey, I know how to invest. Let me make everyone whole again."
Instead, we had this:
https://www.bloomberg.com/graphics/2018-recovering-madoff-mo...
https://en.wikipedia.org/wiki/Recovery_of_funds_from_the_Mad...
So some future Irving Picard will have the task of getting people some of their money back. I wouldn't want that job.
Instead, we had this:
https://www.bloomberg.com/graphics/2018-recovering-madoff-mo...
https://en.wikipedia.org/wiki/Recovery_of_funds_from_the_Mad...
So some future Irving Picard will have the task of getting people some of their money back. I wouldn't want that job.
Probably not, as Enron was a real company and its collapse led to massive job losses. Crypto is just speculators losing money. More like Tulipomania, maybe Madoff if it can be proven that it was intentional.
I mean crypto has thousands of employees too?
Also enron was also just speculators losing money
Also enron was also just speculators losing money
According to the wiki page, FTX only has 300 employees.
AFAIK, this wasn't a situation were people gambled and lost, it was just straight up fraud. FTX misled customers (not investors) into thinking their deposits were safe, when in fact they were being used for gambling (because of course they were).
[deleted]
Pretty unfair to CZ. FTX was using FTT as an infinite money glitch. Why would CZ hold a coin that has a strong likelihood of going to 0?
https://dirtybubblemedia.substack.com/p/is-alameda-research-...
The balance sheet showed billions of dollars in assets for coins that had tens of millions in liquidity. There's an 8 billion dollar hole in the balance sheet. It's pretty clear they used customer deposits to pay back lenders. Why would CZ buy a company that's nearly an Enron level fraud, and due for a criminal investigation. https://www.visualcapitalist.com/ftx-leaked-balance-sheet-vi...
SBF describes coins like a ponzi with no shame https://www.youtube.com/watch?v=C6nAxiym9oc
This was Alameda CEO https://www.youtube.com/shorts/qvURq4jaUcA
https://twitter.com/carolinecapital/status/13790363463003054...
Meanwhile, after 1 - 2bn in customer funds are missing. Everyone is asking Sam to say what happened. Sam proceeds to troll by writing the words "What happened" one letter at a time, with an Elizabeth Holmes-like legal disclaimer that he's not going to recall any of the details.
The balance sheet showed billions of dollars in assets for coins that had tens of millions in liquidity. There's an 8 billion dollar hole in the balance sheet. It's pretty clear they used customer deposits to pay back lenders. Why would CZ buy a company that's nearly an Enron level fraud, and due for a criminal investigation. https://www.visualcapitalist.com/ftx-leaked-balance-sheet-vi...
SBF describes coins like a ponzi with no shame https://www.youtube.com/watch?v=C6nAxiym9oc
This was Alameda CEO https://www.youtube.com/shorts/qvURq4jaUcA
https://twitter.com/carolinecapital/status/13790363463003054...
Meanwhile, after 1 - 2bn in customer funds are missing. Everyone is asking Sam to say what happened. Sam proceeds to troll by writing the words "What happened" one letter at a time, with an Elizabeth Holmes-like legal disclaimer that he's not going to recall any of the details.
Agreed. If anything he protected Binance customers from exposure to this dumpster fire.
>This was Alameda CEO https://www.youtube.com/shorts/qvURq4jaUcA
>https://twitter.com/carolinecapital/status/13790363463003054...
I have to admit the tweet is pure cringe, but I can't see anything wrong with the youtube. Most of the answers seem reasonable if you don't try to interpret in the worst possible light and factor in that there's zero context provided.
>https://twitter.com/carolinecapital/status/13790363463003054...
I have to admit the tweet is pure cringe, but I can't see anything wrong with the youtube. Most of the answers seem reasonable if you don't try to interpret in the worst possible light and factor in that there's zero context provided.
These people are supposed to be some kind of geniuses but everything that comes out of their mouth is contentless drivel. Caroline says at best she's using elementary school math. The articulation SBF provided of how the system works was literally something like 'A box you put coins into and take money out of' which he then explained to be a ponzi scheme in everything but name. How on earth did these kids come to be in charge of such massive amount of capital? The whole thing defies logic.
They're well connected ivy-league kids with a politically and financially enriched background. They had rich folks who know other rich folks, and they were trying to do a capture of an emerging financial sector (that they then lobbied to regulate with the government).
It was a scam from the start that would turn crypto into political party money - forever.
It's actually a surprise they didn't succeed
It was a scam from the start that would turn crypto into political party money - forever.
It's actually a surprise they didn't succeed
> SBF describes coins like a ponzi with no shame https://www.youtube.com/watch?v=C6nAxiym9oc
Just offering that just a few minutes into that video, I saw everything I hate about many youtubers' style, generally. I can't describe it, but there it is.
I listen to Odd Lots. Generally, that podcast keeps things thoughtfully presented. I remember that episode and it reinforced distrust of crypto.
Just offering that just a few minutes into that video, I saw everything I hate about many youtubers' style, generally. I can't describe it, but there it is.
I listen to Odd Lots. Generally, that podcast keeps things thoughtfully presented. I remember that episode and it reinforced distrust of crypto.
I get where you're coming from. But its also an interesting observation that CoffeeZilla (the youtuber) has consistently provided critical crypto industry reporting on par or better than most mainstream media.
I honestly trust him as much as Matt Levine when it comes to Crypto. Which is saying a lot as Matt Levine is arguably the best financial reporter of a generation
I honestly trust him as much as Matt Levine when it comes to Crypto. Which is saying a lot as Matt Levine is arguably the best financial reporter of a generation
> The whole thing is quite messy – much like the whole crypto ecosystem, which is supposed to be open and transparent but is more opaque than a dog with glaucoma.
Centralized exchanges are NOT crypto. They often don't even use crypto - just fabricated records in their databases with no crypto backing whatsoever, like FTX.
Centralized exchanges are NOT crypto. They often don't even use crypto - just fabricated records in their databases with no crypto backing whatsoever, like FTX.
And Enron was the Enron moment of what industry exactly?
These comparisons make for good clickbait, but in reality they're meaningless.
The truth is, these sorts of things happen in cryptocurrency every bear market, and in more mature markets as well but just to a less extreme degree. The only reason it feels huge in cryptocurrency is because the news has been covering it non stop, celebrities were endorsing things and commercials were on TV. In reality the magnitude of this collapse, logarithmically, is smaller than all previous bitcoin and related market collapses. In absolute terms it's big, and it is a big deal just like any financial happenings are a big deal, but itst being made bigger than it is because there's money to be made manipulating emotions.
These comparisons make for good clickbait, but in reality they're meaningless.
The truth is, these sorts of things happen in cryptocurrency every bear market, and in more mature markets as well but just to a less extreme degree. The only reason it feels huge in cryptocurrency is because the news has been covering it non stop, celebrities were endorsing things and commercials were on TV. In reality the magnitude of this collapse, logarithmically, is smaller than all previous bitcoin and related market collapses. In absolute terms it's big, and it is a big deal just like any financial happenings are a big deal, but itst being made bigger than it is because there's money to be made manipulating emotions.
Enron was the Elf Aquitaine [1] compounding moment of the energy industry. It's not comparison, it's a chain reaction, fraud begets fraud.
[1] Happened in 1994: 'the biggest fraud inquiry in Europe since the Second World War... Elf became a private bank for executives who spent £200 million on political favours, mistresses, jewellery, fine art, villas and apartments', £200 million, how quaint https://en.wikipedia.org/wiki/Elf_Aquitaine#Fraud_scandal_(1...
[1] Happened in 1994: 'the biggest fraud inquiry in Europe since the Second World War... Elf became a private bank for executives who spent £200 million on political favours, mistresses, jewellery, fine art, villas and apartments', £200 million, how quaint https://en.wikipedia.org/wiki/Elf_Aquitaine#Fraud_scandal_(1...
Question: Will SBF still be a millionaire many times over after this?
He will likely end up in jail. If he's not in jail by the end of this there is just serious corruption.
The corporate structure surrounding FTX is so complex, and given that Elizabeth Holmes is still walking free, I would guess it will be a long long time before anyone involved here sees a jail cell.
Elizabeth Holmes defrauded investors. SBF gambled with customer deposits. I’d say the stakes are higher.
Edit: fixed formatting.
Edit: fixed formatting.
Plus, Holmes was judged to be guilty, the sentencing will be this week: https://www.theguardian.com/technology/2022/nov/14/theranos-...
I'm just saying that it's been 7 years since the fraud went public
Yeah. The SEC was created to protect the general public. Not “sophisticated investors ” (aka those who care afford to lose money)
Holmes made up device was in a few Walgreens giving people made up medical test results. I disagree the stakes are higher here.
He's a citizen of the most corrupt country in the world and the (only?) one that legalised that corruption and gave it a different name. He was the biggest donor to the governing party.
He'll be fine.
He'll be fine.
The Bahamas is the most corrupt country in the world?
[deleted]
Most corrupt country in the world? By what measure?
It's legal in your country to pay huge sums of money to your politicians in order to buy influence. Ergo the laws of the country and the actions of the government are for sale to the highest bidder.
In most other countries, this would land people in jail, but in the US it's so utterly brazen that you can find the details online. See https://www.opensecrets.org/
Don't forget that the very phrase "Banana Republic" is a result of US corporations that had bought the US govt and gotten them to oust governments in 3rd world countries for the benefit of those US corporations.
In most other countries, this would land people in jail, but in the US it's so utterly brazen that you can find the details online. See https://www.opensecrets.org/
Don't forget that the very phrase "Banana Republic" is a result of US corporations that had bought the US govt and gotten them to oust governments in 3rd world countries for the benefit of those US corporations.
Transparency International maintains a global corruption index - the US ranks 27th in terms of "least corrupt" which is within the top quintile. Many other countries rank worse. For example, Fiji is rated 45th on the index.
You can absolutely use money to influence politicians in the US, but that's likely true of wherever you live too. New Zealand is a very not-corrupt country according to the corruption index, but I seem to recall Peter Thiel had no trouble purchasing citizenship in contravention of their laws - I'm sure money had nothing to do with that though.
You can absolutely use money to influence politicians in the US, but that's likely true of wherever you live too. New Zealand is a very not-corrupt country according to the corruption index, but I seem to recall Peter Thiel had no trouble purchasing citizenship in contravention of their laws - I'm sure money had nothing to do with that though.
> The US ranks 27th in terms of "least corrupt"
Oh yes, that's why I consider them the worst. They're so corrupt they legalised it and have conned organisations like Transparency International into believing that in the US, paying off politicians isn't corruption. That's the funniest part... they call it speech.
But the same "speech" in any other country is considered corruption and bribery.
You were able to point to the NZ example with Peter Thiel precisely because corruption is so rare there and there was a massive outcry about his case.
Oh yes, that's why I consider them the worst. They're so corrupt they legalised it and have conned organisations like Transparency International into believing that in the US, paying off politicians isn't corruption. That's the funniest part... they call it speech.
But the same "speech" in any other country is considered corruption and bribery.
You were able to point to the NZ example with Peter Thiel precisely because corruption is so rare there and there was a massive outcry about his case.
Paying off politicians in the US is illegal and it is prosecuted. As I mentioned, money buys you undue influence over politicians in the US - but that's true in every country. There is no reason to think the US is more corrupt than most countries, or the most corrupt in the world - as you've said. What evidence there is shows that US has unusually low levels of corruption relative to the other countries in the world.
The Transparency International index is based off of a survey of residents asking questions about perceived corruption. Paying off politicians, even if it were done as legal campaign contributions, would contribute to perceived corruption.
I know about the Peter Thiel example not because there was a massive outcry, I have basically no exposure to New Zealand news, but because I read about Peter Thiel and came across the story that way. I have no doubt that all I'd have to do to find an unending stream of money influencing New Zealand politicians is go to Google and search for it. But, I don't need to, because I already know that money is a corrupting influence worldwide - not just in the US.
The Transparency International index is based off of a survey of residents asking questions about perceived corruption. Paying off politicians, even if it were done as legal campaign contributions, would contribute to perceived corruption.
I know about the Peter Thiel example not because there was a massive outcry, I have basically no exposure to New Zealand news, but because I read about Peter Thiel and came across the story that way. I have no doubt that all I'd have to do to find an unending stream of money influencing New Zealand politicians is go to Google and search for it. But, I don't need to, because I already know that money is a corrupting influence worldwide - not just in the US.
> The Transparency International index is based off of a survey of residents asking questions about perceived corruption
That's very convenient for the US, and why it managed to avoid being #1 on the list.
In India a small businessman gets annoyed that he has to pay a $20 bribe to have an operating license issued, but it works. He will tell Transparency Intlt that bribery is rampant. In the US there is no bribe a small business owner can pay to make his business work because the multinational billion dollar corporation with offices on Wall Street, D.C, and every other major city has paid off the legislators and had them introduce laws that introduce a barrier to entry that no small business could ever scale. The US small business owner will honestly tell Transparency Intl that he's never had to bribe anyone.
opensecrets.org
That's very convenient for the US, and why it managed to avoid being #1 on the list.
In India a small businessman gets annoyed that he has to pay a $20 bribe to have an operating license issued, but it works. He will tell Transparency Intlt that bribery is rampant. In the US there is no bribe a small business owner can pay to make his business work because the multinational billion dollar corporation with offices on Wall Street, D.C, and every other major city has paid off the legislators and had them introduce laws that introduce a barrier to entry that no small business could ever scale. The US small business owner will honestly tell Transparency Intl that he's never had to bribe anyone.
opensecrets.org
OK but you said the USA is the *most* corrupt country in the world. Meaning if there is even *one* country more corrupt, the US isn't the most corrupt. Why is the US more corrupt than India or Russia for example?
Good question.
My answer is that in those two countries, bribing legislators is illegal, while enforcement is poor.
In the US, it's all been made legal, so happens on a massive scale right out in the open.
In India a small businessman gets annoyed that he has to pay a $20 bribe to have an operating license issued, but it works. In the US there is no bribe he can pay to make his business work because the multinational billion dollar corporation with offices on Wall Street, D.C, and every other major city has paid off the legislators and had them introduce laws that introduce a barrier to entry that no small business could ever scale.
opensecrets.org
My answer is that in those two countries, bribing legislators is illegal, while enforcement is poor.
In the US, it's all been made legal, so happens on a massive scale right out in the open.
In India a small businessman gets annoyed that he has to pay a $20 bribe to have an operating license issued, but it works. In the US there is no bribe he can pay to make his business work because the multinational billion dollar corporation with offices on Wall Street, D.C, and every other major city has paid off the legislators and had them introduce laws that introduce a barrier to entry that no small business could ever scale.
opensecrets.org
No, there's no world in which he is. Fraud on this level will see massive forfeiture as directed by the SEC and DOJ and then civil suits will clean up anything left afterward he's released from prison.
> No, there's no world in which he is
Sure there is.
The scenario where he escape with a suitcase of gold to a country without extradition.
Or another scenario would be if he had serious blackmail on several key govt officials.
Sure there is.
The scenario where he escape with a suitcase of gold to a country without extradition.
Or another scenario would be if he had serious blackmail on several key govt officials.
When you're hitting at that level you can't hide, not anymore. Maybe in the 70s. Countries without extradition aren't usually the kinds of places you want to go these days, and people there are bound to know who you are and shake you down when you're a globally known rich guy.
For time being he seems to be firmly stuck in the Bahamas and I doubt he's going anywhere except in handcuffs.
The Alameda CEO, though, was last spotted in Hong Kong, which offers many more possibilities.
The Alameda CEO, though, was last spotted in Hong Kong, which offers many more possibilities.
You need nothing that heavy.
Many printed out bitcoins fit in an envelope.
Many printed out bitcoins fit in an envelope.
Printed out bitcoins?
Yes having bitcoins is just having a private key. In 12 or 24 words format a wallet can even be memorized if needed. The blockchain is the global ledger of how much money there is on corresponding public keys.
yea, but probably not with gold. Besides dealing with the physical difficulties of it, it was a crypto exchange after all which also just got magically "hacked" when things started to go downhill. sure getting out that crypto isn't the easiest but likely easier than millions in gold.
one thing crypto is pretty decent for is hiding a bunch of money from authorities
[deleted]
It really isn’t, crypto has mini enron moments on a regular basis. Any real bank losing $100M of customer funds (or much more) isn’t the least bit surprising. Happens all the time. Sure more people are noticing over time but it’s not done happening.
This article is a good succinct summary of events, especially for someone like me who isn't keyed into the "who's who" of the crypto world.
I'd caution that the author of the article isn't too keyed into crypto either.
> A friend who is deeply involved in this industry told me of the clashing egos. “CZ helped SBF create FTX, let him grow it, and then when it got too big, he destroyed it.”
The situation was entirely the creation of FTX - CZ just amplified the alarm that was already ringing when Alameda's balance sheet issues came to light.
Tl/Dr; SBF ran both an exchange and a hedge fund as allegedly separate companies. His hedge fund made several highly speculative investments during the crypto bull run. They then started bailing out companies in the summer when the tera/Luna stable coin crashed. Along this time falling crypto prices were causing Alameda to get margin called. Eventually SBF took user funds from the exchange to meet the hedge funds margin calls. At that point it became a zombie company. Depending on what you read SBF had less than a billion dollars of assets to 10 billion of liabilities.
The scope of SBF's fraud is being actively uncovered by the community as we speak. It'll be a while before we know the full picture.
Painting this as crypto bro trader war trivializes it and reduces SBF's responsibility. SBF built a house of cards on top of fraud and eventually some wind knocked it down. The responsibility lies with him and his leadership team.
> A friend who is deeply involved in this industry told me of the clashing egos. “CZ helped SBF create FTX, let him grow it, and then when it got too big, he destroyed it.”
The situation was entirely the creation of FTX - CZ just amplified the alarm that was already ringing when Alameda's balance sheet issues came to light.
Tl/Dr; SBF ran both an exchange and a hedge fund as allegedly separate companies. His hedge fund made several highly speculative investments during the crypto bull run. They then started bailing out companies in the summer when the tera/Luna stable coin crashed. Along this time falling crypto prices were causing Alameda to get margin called. Eventually SBF took user funds from the exchange to meet the hedge funds margin calls. At that point it became a zombie company. Depending on what you read SBF had less than a billion dollars of assets to 10 billion of liabilities.
The scope of SBF's fraud is being actively uncovered by the community as we speak. It'll be a while before we know the full picture.
Painting this as crypto bro trader war trivializes it and reduces SBF's responsibility. SBF built a house of cards on top of fraud and eventually some wind knocked it down. The responsibility lies with him and his leadership team.
The collapse of Binance will be the Enron moment. By magnitude, Tether is a much bigger "fractional reserve" (Ponzi) scheme than FTX.
Are you confusing Bitfinex and Binance?
No. Binance is a huge exchange and is tied to Tether, which is an open scam. Bitfinex is a comparatively small player.
How many Enron moments is crypto going to have?
I don't remember New York Times doing a glowing feature on Enron and its leadership after it had collapsed.
It's not nice making fun of people's names, but ever since this blew up I can't help but call him Cryptoman-Fraud.
So many people are kicking SBF now that he's on the ground and it's disgusting. Anyone who was talking shit about him in private but now is going public with it isn't smart you are a pussy.
I've never met the guy but I used FTX this month and it was solid. I'm hoping they pull through. We need more last mile providers. Instant crypto banking is >> than the molasses fiat banking we currently have.
(Obviously if you were talking shit about him publicly before the fall then I respect that and please carry on)
I've never met the guy but I used FTX this month and it was solid. I'm hoping they pull through. We need more last mile providers. Instant crypto banking is >> than the molasses fiat banking we currently have.
(Obviously if you were talking shit about him publicly before the fall then I respect that and please carry on)
Haven't they effectively admitted to stealing billions of dollars of FTX exchange customer funds to try and prevent Alameda from going under? Alameda blowing up would be one thing, its investors knew they were making a risky bet, but FTX exchange users appear to have been just straight-up robbed.
I've been able to make withdrawals from FTX just fine, but haven't logged in in a few days.
Well their assets were frozen on Nov 10 by the Bahamas' securities regulator, so I hope you withdrew any money that you needed.
https://www.bloomberg.com/news/articles/2022-11-10/ftx-com-a...
https://www.bloomberg.com/news/articles/2022-11-10/ftx-com-a...
You should delete the app from your phone. An update has come out since this story broke that looks like a trojan that scans for wallet keys on your device. Also, don't go to they're website.
So, that's basically where things sit right now.
So, that's basically where things sit right now.
You forgot to link the source
> We need more last mile providers. Instant crypto banking is >> than the molasses fiat banking we currently have.
Based on what? Don't get me wrong, laws that have enabled companies to do awful things without repercussions definitely need improvement... but continuing to allow such corruption, just because it is a crypto exchange, only hurts the cause not helps it. These billionaires need to be held accountable at all levels. Holding SBF accountable will only help instill my confidence that things are improving... but when a bank gets caught doing it and is given a free pass, then I will certainly continue to have doubts that things have improved much.
Based on what? Don't get me wrong, laws that have enabled companies to do awful things without repercussions definitely need improvement... but continuing to allow such corruption, just because it is a crypto exchange, only hurts the cause not helps it. These billionaires need to be held accountable at all levels. Holding SBF accountable will only help instill my confidence that things are improving... but when a bank gets caught doing it and is given a free pass, then I will certainly continue to have doubts that things have improved much.
FTX was claiming it was FDIC insured???
From August 2022:
Crypto firm FTX gets warning from FDIC to stop ‘misleading’ consumers about deposit protection
https://www.cnbc.com/2022/08/19/crypto-firm-ftx-receives-cea...
From August 2022:
Crypto firm FTX gets warning from FDIC to stop ‘misleading’ consumers about deposit protection
https://www.cnbc.com/2022/08/19/crypto-firm-ftx-receives-cea...
> Instant crypto banking
At least you recognize the fact his exchange is actually a bank in disguise. Plenty of people did not make that connection and they absolutely deserve to be angry that some asshole donated their deposits to some US political party and god knows what else.
At least you recognize the fact his exchange is actually a bank in disguise. Plenty of people did not make that connection and they absolutely deserve to be angry that some asshole donated their deposits to some US political party and god knows what else.
There are crypto exchanges that deliberately offer a bank-like user interface and use bank-like terminology to make people think they are as safe as banks. Example:
Crypto.com:
Crypto.com:
The World’s Fastest Growing Crypto App
Join 50M+ users buying and selling 250+ cryptocurrencies at true cost
Spend with the Crypto.com Visa Card and get up to 5% back
Grow your portfolio by receiving rewards up to 14.5% on your crypto assets
Apple iOS download icon
Android Play Store download icon
The scam is fractional reserve banking. That's bad enough on its own but you gotta consider the fact these are unregulated banks which means they don't really have to follow rules such as "you must keep X% of all deposits as a reserve".
So not only do these exchanges inflate the cryptocurrency supply, they're also prone to overleveraging themselves in their attempts to "efficiently allocate" customer funds, exposing them to risk without them even realizing it, often losing everything in the process and crashing the entire cryptocurrency economy when that inflated money supply disappears into thin air.
So not only do these exchanges inflate the cryptocurrency supply, they're also prone to overleveraging themselves in their attempts to "efficiently allocate" customer funds, exposing them to risk without them even realizing it, often losing everything in the process and crashing the entire cryptocurrency economy when that inflated money supply disappears into thin air.
> as safe as banks
Don't forget that U.S. banks steal 4 FTX's worth of customer funds per year: https://breckyunits.com/the-great-bank-robbery.html
Don't forget that U.S. banks steal 4 FTX's worth of customer funds per year: https://breckyunits.com/the-great-bank-robbery.html
Reading as others, apparently as ignorant as me, ask questions about crypto, etc. the in-crowd seem to get it, seem to understand it. I find that generally the case with anything monetary/financial though: the people that do this complex stuff seem to understand it but seem unable to explain it in a way that someone as simple as me can understand.
In order to play the crypto game you have to learn this absurd set of rules. And there's something about crypto though where the proponents almost revel in other's ignorance. I've had a hard time deciding whether the proponents really understand it (and all of its nuances) or if pretending you understand it in fact part of the game.