https://www.washingtonpost.com/politics/interactive/2022/top...

Just pure Machiavellian outcomes

There's a previous submission from a different source: https://news.ycombinator.com/item?id=33535015

but when you have to guess stuff about the crypto market, you literally have to think the worst things or the best things and you will be right

my guess here is simple, CZ has liquidated everything that can be liquidated that doesnt make him look bad, hes deep in the very same business than FTX/Sam was, he doesnt need to look the balance sheet, chances are his balance sheets are similar or worse haha

So he probally liquidated longs if any, he probally did OTCs with other tokens/assets and just kept the FTT as a PR move to pretend he was a nice guy, anyways having an amount of $ "lost" by a token that was never worth anything is still 0 lost, he most likely got those tokens in exchange for other tokens worth nothing, or during ICOs stage so pretty much hes not losing any cash even tho you will read people saying how much he lost, remember all of that is nominal value, not real cash value at the end, the very same reason things are falling now.

[1]: https://www.cnbc.com/2022/05/13/robinhood-shares-jump-after-...

His seminal work reads like a groveling apology masquerading as advice to the politicians who had banished him.

IMO, the word works fine for describing someone who gambled on their own dubious advice and lost. Even moreso if the loss stems from a cyclical event, like the boom/bust nature of financial institutions which let the Medicis buy their way to political power in the 1400s.

Tell me who at the same level of insider info, gonna OTC borrow you millions of FTT for you to short, when most likely that person/entity owning millions of FTT is already trying to protect their value?

You have to remember that when you short and you bet for price going down, the other side is betting for price going up or at least for the price to stay at the same levels, the person borrowing you has to be constantly doing DD to be sure that its the right moment to borrow the asset, and its pretty obvious that someone holding big amounts of FTT was/is very aware of whats comming

if I was an OTC shorter and had millions of FTT and you see Binance CEO comming to you to short, I inmediatly said no and cashed out those FTT instead of shorting, cause clearly at those levels there is certainty of what they are doing.

Work at a trading firm and we saw the entire thing play out, but we're algorithmic so we weren't set up to take advantage.

Though if you're a small player, there's a lot of opportunity here. Some times, the difference between the price for liquidation and the price you can get somewhere else is high. We saw one dude make a quick $300k through a flash loan. The market isn't fully efficient yet, so this opportunity was available for 10 min before someone took it.

But even if they do produce that, it can only show the asset side if the balance sheet.

Quite a lot of financial failures are a result of off-balance-sheet liabilities.

USDT: https://app.aave.com/reserve-overview/?underlyingAsset=0xdac...

USDC: https://app.aave.com/reserve-overview/?underlyingAsset=0xa0b...

They were insolvent way before the crash.

I think the only synthetic, or fractionally backed stables left are Ohm and Frax. They do not have any significant market share.

Most volume is in

- USDT/USDC pairs

- ETH pairs

- BNB pairs

I run a website that tracks this stuff:

https://tradingstrategy.ai/trading-view/exchanges

Binance or CZ paid never paid face cash value for any those tokens, simple as that.

And most important, he hasn't purchase FTX. So it was just tweets and have your PR team contact major crypto news sites

So far it has cost them a couple of tweets.

The political cost of being in a depression is far too severe for those in power to not prevent it. They are armed with far more tools and knowledge today than 1929. This will be merely yet another recession in a long history of human society oscillations.

>Cryptos seem to be: 1) a tech stock 2) a "fair weather" asset.

I do agree with that, but it's a result of crypto being played by the same people who played tech stocks and fair weather assets. The OG evangelists who saw it represent the antithesis of the current world order have pretty much disappeared as crypto picked up attention from VCs.

On the contrary, the assumption seems to be on your part. You say "it's just the beginning" but the Fed has already been signaling that they will slow down and then cease the interest rate increases over the next several months.

I am concerned about their near new monopoly. But alleging that Binance is involved in these money printing shenanigans is simply baseless.

Source: https://twitter.com/cobie/status/1590384255091499008

Could be fake.

Edit: Looks like the parent commenter was referring to Binance's balance sheet, which might be what you were asking about. The balance sheet I linked is FTX+Alameda.

This is the mind boggling part to me and many others like you. How do you mess up this bad when you were on top of the world and a billionare before age 30? Was it really not enough?

Not sure which exchanges are sane anymore these days, you can rule out pretty much anything with it's own token as being too high risk, including Binance. Coinbase went too big too fast and we saw extreme greed with them going public. Kraken seem cautious overall, taking fewer risks and doing things the right way?

Hard to say for sure.

  - Double Tops btc in november 2021. 

  - Interest rates at record lows worldwide.

  - Early signs of inflation > Rumors of fed raising interest rates & rumors of quantitative tightening.

  - End of covid checks and government bailouts.

I also suggest you reading Financial Times and especially its comment section which is often more insightfull than articles themself... WSJ optional, but its comments section is trash (politicaly and economically very biased). > google bypass firewall.

I also suggest you to disconnect completelly from "assets" built and backed by hashed numbers (once you read "History of Financial Speculation", it will become clear).

Good luck.

Normal exchanges don't go bust all the time, it's not rocket science.

Interesting, I would have thought that Centralized exchanges would be cheaper and faster.

Cheaper because there are no block chain transaction fees. So assuming a DEX and CEX can charge the same fee structure, then CEX's should win as there is no exchange fee added to each transaction.

On chains like ETH that matters alot if you trade alot.

And same for speed. On a CEX a trade is a database update, on a DEX its a blockchain update. Hard to see how the later can be as fast as the former.

But 2021 was a time when the casino was giving away money for free. NOT gambling was the wrong move. Sitting on a high horse did nothing for anyone, except maybe bask in the schadenfreude when the thing invariably collapses.

Meanwhile lots of people, including me, made life changing money.

If you withdraw more than your interest and in some other crypto than your collateral then your loan now has leverage. During that particular withdraw transaction you will have signed some logic which can automatically liquidate your lent crypto if the amount you withdrew (minus interest) becomes worth less than your collateral.

Until that pre-signed liquidation transaction executes you are fully in control of the balance and keys.

Consensus is actually very very cheap if its not done with PoW or similar consensus "tech". Distribution isn't cheap because obviously 2 identical servers cost twice as much as one. But this comparison isn't actually applicable to real world use. A centralized system that wants to have high uptime and reliability does need multiple server too. Most centralized system do not reach the kind of reliability "blockchains" can have because from a cost-benefit point of view it just does not make sense. 99.999% uptime or about 5.5 minutes downtime per year is very expensive and very few public system come anywhere close to this.

>...there's a tradeoff where the cheaper you make it the easier it becomes to attack

That is actually a pseudo-math-security coming form the early days of Bitcoin. Yes, if you double the number of nodes the system is arguably more secure (if the nodes are actually operated by different entities) and it costs twice as much to run BUT there is no point to endlessly increase the number of nodes. Less nodes but strategically placed around the world operated by different entities is way way more efficient and cost way less than the blind "more is better" approach.

Some quick back-of-the-envelope calculation:

1 node hardware + energy and maintenance cost per year $100k USD. 50 such severs distributed all over the world.

This system would therefore cost about 5 million per year. Sounds like a lot but assume there are 1 million transactions per day that would mean 1 Tx cost only $0.0137. Obviously more Tx/d would reduce the price per Tx because operation cost cost does not grow at the same rate.

Give $0.0137 USD to the operators for each Tx sound like a good idea but most system also give the operators the power to change that price, which is comically stupid.

The reason Tx fees on some blockchains are order of magnitudes higher, is because of bad design, completely pointless levels of redundancy, and most importantly because the operators do make huge profits.

Its only logical that they would double the fee if that reduced the number of Tx by less than 50%. They dont care if you cant use the system anymore because the fees are too high for you they only care about the sum of all fees.

Imagine HN but every comment would cost money and the operator would want to make the maximum profit possible. You could plot the average number of comment at a given cost and find the price that leads to the maximum profit. One thing is for sure, comments would not be cheap.

DYOR or "don't trust, verify" are common mantras in the industry for a reason, and similarly are the reason that I hold custody of my own assets rather than relying on centralized entities like FTX.

Would you call Peloton's VC backers "ponzi schemers"?

https://blockworks.co/tether-pushes-back-timeline-on-audit-r...

Do people speculate on it more than they probably should? Sure. But at the heart of the stock market is a system of "I just sold a physical thing for $1000, and since you own the stock you get $0.00001 of that". At the heart of crypto is "my computer did some math, so... money".

Even if a company is loss making and doesn't pay dividend, there will be someone who would be interested in acquiring the company to actually run it and not just just to flip it to a bigger buyer at a later date. That is why Musk paid $44B for Twitter. Because after all is said and done, it is still the most influential social network amongst the people who matter. Owning it has a value for someone like Musk. That value comes from the activity that Twitter conducts and not the demand for its shares.

In crypto value comes only from the demand. In stock, demand comes from the value being generated by the company.

Companies like Coinbase are selling turtles all the way down, then.

We're about to see this process unfold for FTX. How exciting!

Regarding ownership, however, you can explicitly own things- or parts of things- on the basis of token ownership, but you’re right that this isn’t the way that bitcoin and many other technologies are structured.

It happens every day....

Oracle (READ: aggregated/decentralized APIs feed) services and other infrastructure that supports decentralized protocols (network graph, etc.)

Decentralized lending, borrowing, trading.

SaaS products in on-chain analytics, portfolio management, commerce aggreggation.

Gaming

Fine Art (a tiny minority of the art scene in crypto is pretty interesting, ex. distributed multiplayer run-time art, something that can't really exist outside of the medium)

Digital Collectibles as an end consumer product or in service of the construction of lifestyle brand / gaming / etc startups. (A lot of the most boring use cases land here, imo)

Advertising

Content creation/consumption

Have you guys ever even used any dApps?

If I have a speculative belief that Venmo will rise above Cash.App, PayPal and crypto and end up powering the digital economy, even to the point that a major Blue Shield insurance company would send me reimbursements on it, should I be putting my savings into its balance? What should I value my money on Venmo? What utility would there be for holding ETH in that balance vs USD, besides sheer speculation that ETH would rise in value?

No it's not. When an asset prices in cash, that price is dependent on it's ability to generate future cash (Goods/Services price based on the utility from consuming that thing). If you think that model is wrong, then you are wrong.

>As far as GDP, Ethereum spawned an entire new industry with tons of companies paying actual salaries to people (in fiat, if I might add), all of whom bought lattes and cars and houses, and some, I'm sure, also bought Peloton bikes.

Oh no no no. You are not buying any of that when you buy Ethereum. We are not talking about whether or not Coinbase/Binance/etc. are Ponzi schemes. They offer services in exchange for fees. That is GDP full stop.

Again, I can argue they are bad businesses because their fees are dependent on a Ponzi Scheme, but they are not the Ponzi Schemes.

>Crypto currencies are like stock tickers. The price does not have to have any bearing on the actual value generated by the stock or the company it represents.

This is a very weird argument. When an acquirer wants to buy a company, they need to pay the stock (usually plus a premium) price to own that company. Stock prices reflect the theoretical takeout price of a company (and this is put into practice every day).

Cryptocurrencies are marketed to you as similar to stock tickers, but they are currencies (it's sort of in the name) and currencies are valued by the demand for goods/services/assets you can buy with them (i.e. this is why export economies, all else equal, have strong currencies).

I would agree that cryptocurrencies would go up in value if you could buy an increasingly large amount of things with them (and only them), but heuristics imply the exact opposite is true.

>There is a speculative element to all markets, including the stock market. And I think you know that as well.

You're really not getting that there's 'overestimate future cashflow' speculation (bad but not so bad) and 'funamental misunderstanding of the asset' speculation.

But, it's your pocketbook so good luck.

Paying developers goes in the cost column, not the benefit column. (If you hire a bunch of developers and pay them to sit around twiddling their thumbs all day, you're not growing the economy but rather damaging it - they could've done something more productive instead). The question is what value the ecosystem produces that people are paying in for. And there's certainly a subjective element to that, but the market price should be a sanity check.

Peloton sells exercise bikes and delivers virtual spin classes etc.. And while you can certainly argue they're overvalued (and I'd agree with you, FWIW), it's easy to see how they're actually doing something valuable in the real world - something that, in a small marginal way, improves peoples lives. We can have a sensible conversation about whether a weekly Peleton class is worth $45/month, but people are paying that much for it, not as a speculative "investment" but as a simple exchange of money for goods and services. Real people are better off - in that they were able to take the class and get fitter or whatever. There's certainly a speculative element on top of that, but at the foundational level there's real value being produced.

Where's the product or service for Ethereum? They've had long enough to come up with one. People used to talk about doing cross-border currency transfers (genuinely useful) or that cat breeding game (potentially genuinely fun), but nowadays fees are too high for either of those to be worthwhile and people don't really talk about them. It's not just excessive speculation on top of a fundamentally sound business; there's simply no there there.

This is like the Broken Window Fallacy.

All that money that was spent building Ethereum could have been spent on activities that were far more useful to society.

That service is the point of the whole thing. The fees go to stakers who *execute your computation for you and ensure the integrity of the results*. ETH is analogous to credits on AWS. It's simply an execution environment with different properties from AWS.