[HN Gopher] FTX faces potential hack, sees mysterious outflows t...
___________________________________________________________________
FTX faces potential hack, sees mysterious outflows totaling more
than $600M
Author : janmo
Score : 511 points
Date : 2022-11-12 05:30 UTC (17 hours ago)
(HTM) web link (www.coindesk.com)
(TXT) w3m dump (www.coindesk.com)
| edf13 wrote:
| It's interesting that we aren't seeing a bigger crash in overall
| crypto prices - generally it's holding up ok
| zeroclip wrote:
| Hopeful thinking: people realize that FTX is a CEX and the true
| value of crypto is in DeFi and DEXes.
|
| Reality: contagion will spread next week and everything will
| probably crash, even if DeFi remains unaffected.
| mudrockbestgirl wrote:
| Here is a view of the assets on-chain for anyone that's
| interested:
|
| https://debank.com/profile/0x59abf3837fa962d6853b4cc0a19513a...
|
| Currently at ~$390M. It looks like they're trying to swap most of
| the tokens they received into ETH on-chain.
| [deleted]
| dmichulke wrote:
| For comparison - a regulated traditional finance entity:
|
| _On October 31, 2011, MF Global executives admitted that
| transfer of $700 million from customer accounts to the broker-
| dealer and a loan of $175 million in customer funds to MF Global
| 's U.K. subsidiary to cover (or mask) liquidity shortfalls at the
| company occurred on October 28, 2011._
|
| https://en.wikipedia.org/wiki/MF_Global
| EdwardDiego wrote:
| Is this "whataboutism"? And if so, what's your point precisely?
|
| I don't think anyone has ever claimed that financial
| malfeasance is impossible in traditional banking entities.
| YossarianFrPrez wrote:
| One key difference is the following:
|
| > In January 2013, a judge approved a settlement that would
| return 93 percent of customers' investments, with the prospect
| of additional payouts from the company's general estate.
| austhrow743 wrote:
| I'm not seeing anything about a hack
| gasull wrote:
| To all the people replying that crypto isn't regulated: that's a
| myth. Exchanges are regulated and keep KYC info of their
| customers.
|
| If the FTX hack is true, then all that KYC info will be sold in
| the black market.
|
| Regulation didn't prevent the hack (or rug-pull?). Self-custody
| with DeFi does prevent it.
|
| It's shocking how some people are for tinkering hardware/software
| and self-hosting services like Nextcloud, but it comes to money
| they would rather leave their life savings with a third party (a
| bank or a custodial exchange) and renounce to all financial
| privacy.
| throwawaysleep wrote:
| You going to bet your tech skills vs a hacker when it comes to
| guarding your money?
|
| The reason people are comfortable tinkering with hardware and
| software is that it involves little to no risk. The stakes are
| extremely low.
| the-anarchist wrote:
| You mean a hacker that would need to enter your house, look
| for your hardware wallet, beat the mnemonic out of you and
| quickly enough steal the coins for you to not be able to
| transfer them yourself before he manages to find a computer
| with internet access that is sufficiently hidden to not be
| traced back?
| iakh wrote:
| Is it really that surprising people would rather keep their
| money in a bank that has hired professional security guards
| rather than at home under their mattress?
| gasull wrote:
| Yes, until we had cryptocurrency.
| oneoff786 wrote:
| It's a bit surprising if they spend a lot of effort
| complaining about banks
| bsder wrote:
| The difference is that when a bank gets robbed, I can still go
| get my money back via the legal system.
|
| When a crypto exchange or a crypto wallet gets robbed, you have
| nowhere to go to get your money back.
|
| There are good reasons why we don't keep large amounts of cash
| in our pockets or in our mattresses.
| the-anarchist wrote:
| Good luck getting your money through the legal system when
| the bank collapsed!
| notch656a wrote:
| FDIC. Everyone else pays for your shitty banking choices
| via inflation instead.
|
| To me the crypto version is better TBH, which would force
| either private insurance or none at all. Believe it or not
| you can buy private insurance for crypto, which would
| achieve something like FDIC.
| gasull wrote:
| FDIC covers only up to 200k USD. Many people have lost
| life savings when banks collapse. Also, not everybody
| lives in the US or in countries with a semi decent
| banking system.
| rsj_hn wrote:
| > Many people have lost life savings when banks collapse.
|
| Do you have some data for this statement? (in the US,
| post FDIC deposit era)
|
| Because even when a bank fails, there is usually more
| than enough to cover depositors, and what the FDIC does
| is arrange for the bank to be taken over by a healthy
| bank, with the deposits migrated (but equity and
| bondholders can take a bath). E.g. no depositor lost a
| penny in the financial crisis of 2008 -- which was the
| biggest financial crisis since the Great Depression --
| even if they had money in excess of the limits. However
| it's quite unusual to have money in excess of the limit
| -- if you have that much, you wont keep it as a deposit,
| you'll hold some government guaranteed bonds like
| agencies or treasuries. It is extremely poor cash
| management for an individual to have more than 200K in a
| demand deposit account when they can be earning more with
| government guaranteed bonds that are just as liquid as
| cash. You can even open an account with Treasury Direct.
| dragonwriter wrote:
| > E.g. no depositor lost a penny in the financial crisis
| of 2008
|
| No depositor has lost a penny in an FDIC insured account
| (even with total balances above the insurance limit) ever
| since the FDIC has existed.
| rsj_hn wrote:
| Do you have an example of a depositor losing money they
| stored in excess of this?
|
| Even a single example would do.
| dragonwriter wrote:
| No, I'm saying even _with_ excess balances, no one has
| lost money in accounts subject to FDIC insurance; there
| are no examples, it hasn 't happened.
| rsj_hn wrote:
| Sorry, I misunderstood -- thanks!
| astrange wrote:
| FDIC rescuing a bank doesn't involve money printing.
| Since the bank still closes and can't offer new loans,
| it's slightly deflationary.
| notch656a wrote:
| The events of the bank closing may be deflationary.
|
| The giving of now-gone money to the depositors is
| inflationary.
|
| The fallacy of your above statement is you're considering
| the system of 'fail, then FDIC pays out depositors' when
| in fact the alternative is 'fail, depositors eat losses'.
| The former is inflationary relative to the latter, and in
| fact punitive to those who chose banks that didn't fail.
| The net difference between the two is the discussed
| inflationary event 'FDIC pays out depositors.'
| astrange wrote:
| No, it doesn't increase the money supply because the FDIC
| has a pre-existing fund for it. They're not funded by the
| Treasury and when they are they pay it back.
|
| Though the US could've used more inflation at any point
| up to 2021 considering our inability to ever get
| unemployment low enough. (since they're theoretically
| more or less directly related)
| notch656a wrote:
| Pre-existing Funds that are just sitting waiting around
| to be put into depositor accounts once a bank fails have
| low to no velocity. Giving them to money-spending
| depositors is inflationary by virtue of increasing the
| velocity of that money that was previously just sitting
| on the sideline. Even in the scenario you present is
| inflationary.
| poisonborz wrote:
| Selfhosted services are typically entirely self-contained. You
| access them with clients controlled by you, with devices on
| your network, and apart from updates from trusted sources of
| your choice, not exchange with untrusted parties at all. I'm
| all for decentralised financials but the topic is orders of
| magnitude harder.
| [deleted]
| wesapien wrote:
| How do you know self hosting people do the thing you're
| suggesting?
| conradev wrote:
| Whatever info FTX had, sure. Looks like your private documents
| were stored with Stripe, a much better steward of your data:
|
| > FTX partners with Stripe to ensure a secure identity
| verification process. Please note data will be stored and may
| be used according to the Stripe and FTX privacy policies.
|
| https://help.ftx.com/hc/en-us/articles/360027668192-Individu...
| Seattle3503 wrote:
| I wouldn't be surprised if FTX has a copy of all documents
| and PII. I don't think regulators would accept "Stripe
| suddenly went under" as a valid excuse for not having KYC
| data.
| cuteboy19 wrote:
| > keep KYC info of their customers
|
| This is AML. It has nothing to do with protecting client funds.
|
| Though knowing FTX, they might have advertised compliance with
| "Employees must wash hands" as "We are a fully reglulated
| exchange complying with all applicable local and national laws"
| smt88 wrote:
| There's no way this is a coincidence. This is undoubtedly people
| who work(ed) at the company and were trusted with private keys
| trying to get away with some money while they can.
| alasdair_ wrote:
| Agreed. It's by far the simplest answer. They already have the
| keys and have the code.
| paulpauper wrote:
| I don't think it was insider job. If insiders wanted to steal
| people's assets why do it in such a public manner? If they
| have the keys they can just move funds discretely from the
| larger pooled assets without draining individual accounts. A
| malicious app update draws way too much undue attention.
| oliv__ wrote:
| If I were an insider, I'd want to steal the funds out in
| the open and add decoys such as the app update to make it
| look like a hack.
| bmitc wrote:
| What's weird is, why wasn't the system turned off? They've
| totally collapsed, filing bankruptcy, and supposedly aren't
| allowing withdrawals, so what was the point of leaving the
| system up and vulnerable?
| 55555 wrote:
| They don't have the power to pause non-FTT blockchain
| systems. What you're suggesting isn't really possible.
| Someone has to hold the keys -- and I doubt they used
| sufficient multi-sig -- and anyone who has the keys can
| always move the funds.
| bmitc wrote:
| But aren't they themselves (FTX) custodians of these funds?
| In that case, why not turn their services off to protect
| the keys from being hacked? What you say makes sense once a
| hack takes place, but how did the hackers get the keys? Or
| do they use external custodians?
| v64 wrote:
| > how did the hackers get the keys?
|
| It's most likely an inside job, either by disgruntled
| employees or SBF himself:
|
| "In a subsequent examination, FTX legal and finance teams
| also learned that Bankman-Fried implemented what the two
| people described as a "backdoor" in FTX's book-keeping
| system, which was built using bespoke software.
|
| They said the "backdoor" allowed Bankman-Fried to execute
| commands that could alter the company's financial records
| without alerting other people, including external
| auditors. This set-up meant that the movement of the $10
| billion in funds to Alameda did not trigger internal
| compliance or accounting red flags at FTX, they said."
| [1]
|
| [1] https://archive.ph/YImJS
| smt88 wrote:
| That is truly astonishing. How did he think he could get
| away with it?
|
| I kept wondering how someone who seemed smart, wanted to
| help others, and admitted that crypto is a Ponzi scheme
| could end up in crypto. It broke my brain.
|
| Now I see he was a brazen criminal all along and the
| world makes sense again.
| interleave wrote:
| Related to seeing mysterious outflows on ETH.
|
| I built a little tool that tracks the transaction networks of
| several top tokens.
|
| If anything: Highly entertaining, I see a LOT of weird stuff.
|
| It's called Pudding (because that's where the proof is) at
| https://alexisrondeau.me/pudding/
| tfsh wrote:
| It's been stated that FTX can access the wallets of their
| customers [1], I wonder if employees or other bad actors knowing
| the ship is sinking have decided to - forgive me for the quip -
| plunder any remaining assets.
|
| 1: https://www.coindesk.com/policy/2022/11/10/ftx-violated-
| its-...
| SighMagi wrote:
| That was my first thought. Not FTX related, but I just got
| another email from Coinbase reassuring me that they're not
| gonna use customer funds without permission. I have in the past
| moved my shit out of Coinbase wallets because of doubts about
| that. Honestly though I just want to GTFO of crypto at this
| point...
| lottin wrote:
| Get out, man. Learn investment theory. All you need is a
| couple of index funds and bonds. Investing isn't supposed to
| be exciting or make you rich quick.
| fosk wrote:
| And even there you can get access to options trading for
| quicker - and riskier - ways to make money using the
| traditional stock market. At least if you lose the money is
| not because somebody in the Bahamas decided it was time to
| retire earlier with your assets.
| hello639 wrote:
| > All you need is a couple of index funds and bonds.
|
| Ah, spoken like a true middle class Boglehead.
|
| VTI/VOO will not change your life, even after 30 years.
| Broad market ETFs are not worth the risk.
|
| You're better off doing bonds (little to no risk) or crypto
| (high risk, more likely for life-changing generational
| wealth compared, even compared to FAANG SWE TC).
| 65 wrote:
| Crypto isn't actually an investment in anything. It's
| just speculation.
|
| With crypto you're not investing in anything that will
| produce a positive cash flow. Bonds and the stock market
| actually produce cash flow.
| likecarter wrote:
| Crypto is life-changing in the sense that you will
| probably lose all your money as (1) a complete
| speculation or (2) in a hack or (3) due to fraud.
| kweingar wrote:
| Why not just bet it all on red and get your life-changing
| generational wealth without all the drama?
| MrBingley wrote:
| > life-changing generational wealth
|
| By that measure, the people who had their life savings in
| FTX (and Celsius and Luna before that) have certainly
| succeeded.
|
| Investing in total-market index funds is the single best
| strategy for the average investor. (In fact it's so good
| there's a proof! [1]) If you invested $10000 in the total
| US market in 1992 (30 years ago) and never touched it
| again, your inflation-adjusted balance today would be
| $72452 [2]. That's an insane 7x of real growth that
| requires absolutely no effort on your part. Even if you
| did a more conservative mix of 60% stock and 40% bond
| (VBMFX) you would have 4.5x real growth.
|
| [1]
| https://web.stanford.edu/~wfsharpe/art/active/active.htm
|
| [2] https://www.portfoliovisualizer.com/backtest-
| portfolio
| boppo1 wrote:
| Does that study account for stocks that have dropped out
| of the index? Re-balancing fees? What about LIRP/ZIRP?
| perryizgr8 wrote:
| > Coinbase reassuring me that they're not gonna use customer
| funds without permission
|
| "Not gonna" is wildly different from "cannot". So are you
| sure they physically cannot use your funds? If that's not the
| case, their promise is worth just the price of sending that
| email to you.
| readthenotes1 wrote:
| "at some point, you are the greater fool"
|
| "If you look around the table and can't see the chump, you
| are the chump"
| throwaway743 wrote:
| Not to argue, but just to point out, banks can also do this.
| It's called "bailing-in".
|
| Banks in the US can do it, but only with the excess of accounts
| containing more than $250k.
| Havoc wrote:
| It's gonna be the guy that fixes the printer & its his first
| forray into crypto world
| throwawaysleep wrote:
| And the giant scam that is crypto marches on. I feel like such a
| schmuck for not working on ICOs when that's as all going on. Was
| sure that this was all fraudulent, but you can walk off with a
| billion dollars now and nothing will happen.
| Ekaros wrote:
| Or get on early on some of this junk. But I back then didn't
| believe it would go up and still don't believe it to stay up or
| go up more...
|
| Some many opportunities from pre-mined shit coins to ICOs and
| so on.
| DogOfTheGaps wrote:
| Elon posted about this on twitter:
| https://twitter.com/elonmusk/status/1591313397362352130
| [deleted]
| [deleted]
| nixcraft wrote:
| He must be happy not to take the call with Sam Bankman-Fried to
| invest money
| https://twitter.com/TechEmails/status/1591107918816247808
| chatterhead wrote:
| Absolutely bullshit. Fried's parents are helping him build a
| defense against jail time for breach of fiduciary duty and
| embezzlement while his team coincidentally gets "hacked". Hacks
| are quickly becoming strategic fail-safes against corporate
| incompetence and useful as backroom data sales.
|
| The promise of cryptographic currency was that we have the power.
| These exchanges by design sap that power for a promise that now
| seems illusionary at best and a massive liability at worst.
|
| FINRA and the SEC need to charge Fried and his executive team
| immediately and begin the process of tearing apart that exchange.
| pbourke wrote:
| > The promise of cryptographic currency was that we have the
| power.
|
| As usual, we don't. The question is, do you want the power to
| be in a condo in the Bahamas or in a building with the
| company's logo on it, within walking distance of the SEC and
| SDNY?
| smoldesu wrote:
| Well, if you take the exchanges away nobody has access to
| convenient liquidity. It's unlikely that mainstream
| cryptocurrency will have a future after we've seen so many
| failures at such a large scale.
| infrawhispers wrote:
| FTX General Counsel confirmed unauthorized transactions:
| https://twitter.com/_ryne_miller/status/1591326796305530880?...
| mywaifuismeta wrote:
| > FTX US and FTX [dot] com initiated precautionary steps to
| move all digital assets to cold storage
|
| What assets?
| fmajid wrote:
| Is this like the people in Lebanon who have taken to robbing
| their banks to get their own money out?
| lizardactivist wrote:
| Is it in the US government's interest to see FTX thrive, or to
| see it disappear? What about crypto currency in general?
| FollowingTheDao wrote:
| Corporate theft is not a hack.
| paulpauper wrote:
| How is $ftt still at $2? What will happen to it in bankruptcy
| proceedings? $2 is still higher than it was in 2019.
| adam_arthur wrote:
| The fact that it's not 0 is kind of amazing. Demonstrates the
| vast ignorance of most in the crypto space
| X6S1x6Okd1st wrote:
| The hacker has spent the last 11 hours slowky and incrementally
| converting all the various tokens they got to ETH. They've been
| using a variety of different defi exchange and have eaten large
| slippage fees, at least once over 5M lost in slippage.
|
| We're not seeing any else, e.g. laundering through another
| exchange, splitting into different accounts, automating the
| liquidation of tokens to ETH, off loading ETH into a cold wallet
| etc.
|
| The on chain activity makes this look like an individual who did
| not prepare extensively before doing this or doesn't have the
| skills to use automation/operational best practices
|
| EDIT: first outflows from
| 0x59abf3837fa962d6853b4cc0a19513aa031fd32b have started, they
| still haven't liquidated all their PAXG, a stable coin pegged to
| gold, unclear if it's freezable.
|
| They were able to liquidate all of their USDT except 4M on
| avalanche, and all of their usdc both of which can be frozen. Dai
| is a usd pegged stable coin that can't be frozen, they have
| nearly 1% of it. Note that Dai is heavily exposed to USDC so
| authorities could pressure USDC to destroy Dai
| biztos wrote:
| I'm sure this is a total noob comment but I love how the
| account is named "FTX Accounts Drainer" on Etherscan:
|
| https://etherscan.io/address/0x59abf3837fa962d6853b4cc0a1951...
|
| [Edit: and also the Heist label is very useful!]
| hi5eyes wrote:
| common for etherscan to label malicious wallets
| matheusmoreira wrote:
| Weird. Why ETH and not Monero? ETH can be traced.
| hamiltonians wrote:
| no hurry. it's not like he needs the money now
| smeej wrote:
| There is some hurry. Miners and nodes could theoretically
| update and refuse transactions that come from these
| wallets.
|
| There would have to be enough of them doing this to prevent
| the transactions from getting through, which is far from
| guaranteed, but this is of the sort of scale that it could
| gain the required support.
| smeej wrote:
| They're largely ERC-20 tokens, which can be swapped for ETH
| on DEXes. Monero is a whole separate blockchain, and cross-
| chain swaps are still in their infancy and don't have markets
| to convert ERC-20 tokens to Monero, or definitely not with
| any sort of volume.
|
| The ETH will probably eventually be laundered and some of the
| cleaned coins sent places they could eventually be traded for
| XMR and eventually cashed out, but there's no way to do that
| quickly, and this needs to be done quickly.
| chitowneats wrote:
| "still in their infancy" implies they will eventually
| mature. Non-zero chance we're watching the final implosion
| of blockchain based cryptocurrency.
| VectorLock wrote:
| I don't think we'll ever see the end of cryptocurrency.
| Too good of a grift.
|
| I wonder if we will reach a point where "crypto" will
| revert to not meaning "cryptocurrency" though.
| Falcotech wrote:
| Although FTX was a crypto exchange the crimes committed
| were not dependent on blockchain technology. FTX is a
| company and was holding money and assets for its clients.
| It's somewhat similar to what Bernie Madoff did to his
| clients, before crypto was relevant.
|
| Blockchain based cryptocurrency isn't going anywhere
| anytime soon. This will remind people to take self
| custody of their crypto and not leave it on an exchange.
| lazide wrote:
| Just like cash is a crime magnet, so is Crypto at rest,
| and for the same reason.
|
| If anything, Crypto is easier to track and stop the
| looting, compared to if someone left a key to a warehouse
| containing a billion dollars in cash in it with no
| security cameras, which is what FTX seems to have managed
| to do.
| jacoblambda wrote:
| I don't know if I'd consider this a fair evaluation.
|
| From my observation, the overwhelming majority of
| failures, collapses, and hacks have had a fairly limited
| exposure to the Ethereum-style/Solidity-based networks.
| This even includes the exchange collapses like FTX.
|
| By and large Monero, Litecoin, Bitcoin, Algorand,
| Cardano, and the other networks that are reasonably
| isolated from the ETH/Solidity space have been largely
| unaffected by the majority of the "cataclysm" that the
| space has seen over the last year or two. I don't see any
| of these projects closing up shop in the near future and
| I don't see their communities giving up on them either
| (maybe with the exception of Bitcoin's refusal to move
| away from PoW or to introduce more programmability).
|
| Odds are the cryptocurrency space is going to recede for
| at least a few years once the ash settles but IMHO there
| are too many projects that have yet to suffer serious
| thefts (as in actual loss not numbers go up/down) in
| their communities. Likewise these projects tend to also
| be the ones with shops that are holding sufficient
| operating funds in stable assets (i.e. US dollar
| equivalents & bonds) to continue development for the next
| 5+ years.
|
| TLDR: The failures, hacks, collapses, etc have had
| limited effect on a lot of projects outside of the
| popular/flashy part of the the cryptocurrency space.
| Those projects still have a more or less assured lease on
| life for the next half a decade.
| bonestamp2 wrote:
| What are the chances that this is an insider and not an
| outsider? I ask because the timing of this "hack" is obviously
| a little suspicious.
| [deleted]
| MrMan wrote:
| almost surely an insider.
| bogota wrote:
| the fact that it has been executed so poorly to me seems like
| it is an insider who woke up and thought they could get away
| with it because they hd access to the keys
| sillysaurusx wrote:
| There are reports of SBF having used a backdoor to move
| funds. https://twitter.com/BTC_Archive/status/1591365581550
| 551043?r...
|
| It's unclear if that's a legit source though.
| tsol wrote:
| I've heard this, but seen no real evidence. As of right
| now it's hearsay
| sillysaurusx wrote:
| More hearsay, but it seems to be increasing.
| https://www.tiktok.com/t/ZTRxcP6dx/
|
| Mostly posting it for later, in case it turns out to be
| true.
|
| There was also a tweet trying to pin it on a specific
| coworker.
| sillysaurusx wrote:
| Announcement of an announcement that the hacker's
| identity is theoretically about to be uncovered.
| https://news.ycombinator.com/item?id=33577311
| BeFlatXIII wrote:
| When everyone's getting fired because the company went
| bankrupt, loot the office so you can get a nice chair as
| your final paycheck rather than letting that chair go to
| the creditors.
| FormerBandmate wrote:
| Wouldn't an insider be an expert on crypto markets? They
| literally ran one
| dmurdoch wrote:
| No. Not all insiders would necessarily be professionals
| as covering their tracks post crypto hack. They could
| just be someone who knew they had access to the keys and
| said "screw it my life is already horrible lets try
| this".
|
| Another option is honestly an insider who got screwed (a
| lot of employees had a TONNE of money on FTX) selling the
| keys they knew of to someone else.
| lordnacho wrote:
| Or they got screwed and thought about how to screw the
| higher ups even more. They never need to cash out the
| money to do this.
|
| Nobody will ever not be suspicious of SBF and his inner
| circle again after this hack.
|
| If it were just a big collapse and it went like an
| ordinary bankruptcy with the creditors getting a haircut,
| he'd just be considered an idiot. Money mysteriously
| vanished? Now he's malicious as well, and any court is
| going to ask SBF where it went, and even if he didn't
| know nobody would believe it.
| vkou wrote:
| The latter immediately occured to me. It is a lot easier
| to claim ignorance if your key gets used by someone else
| to drain the vault, than it is to drain the vault
| yourself.
| bombcar wrote:
| 1. Not all the insiders are very skilled, as we can see
| from these things blowing up in expected ways.
|
| 2. Even if you ARE a skilled insider, you may have no
| experience with laundering coin.
|
| 3. The biggest/best coin launderer was killed (tornado?)
| recently, so you may have to learn everything again.
|
| 4. You may be an expert with a gun to your head in some
| basement in God knows where, and trying to not be shot.
| hnews_account_1 wrote:
| 1) this is not the market. It's just blockchain txns.
|
| 2) trust me when I say, no one in crypto except some very
| very select exchanges actually know how to make a market
| trading software. They think they can compete with NYSE
| which is large and employs such incredible talent that it
| still survives in a really tough industry. They're likely
| closer to my grad school project, which even I can tell
| you, sucked absolute balls.
| X6S1x6Okd1st wrote:
| They may not have been involved in the operations of how
| to run the software/make the trades/interface, who knows
| they could just be a physical security person that
| realized there was an opportunity in the chaos.
|
| I haven't seen any public information that tells us who
| it might be, this is all guess work, but it really
| doesn't look like a professional operation like Lazarus
| Group
| matai_kolila wrote:
| Not well!
| stephc_int13 wrote:
| I can't wait to watch the Netflix series.
|
| If you think about it, even his name seems to be a troll.
| AirStreamer27 wrote:
| How can USDC or USDT be frozen?
| X6S1x6Okd1st wrote:
| The smart contacts have a blacklist that the companies can
| add to, that would disable transfers.
| eightysixfour wrote:
| Both are centrally managed and are semi-regularly frozen at
| the request of authorities.
| somebodythere wrote:
| The smart contract has an array of frozen addresses that will
| not be permitted to move funds, which can be edited by Centre
| and Tether respectively.
| FollowingTheDao wrote:
| Corporate theft is not a hacking.
| seretogis wrote:
| When you say "corporate theft" are you referring to theft
| from corporations or theft by corporations? I'm not sure it's
| clear which is relevant here.
| k__ wrote:
| An insider stealing from his employer is not a hacker in
| the classical sense, I think.
| JamesianP wrote:
| I assume they mean embezzlement. Which come to think of it
| may or may not involve hacking.
| zen21 wrote:
| > The on chain activity makes this look like an individual who
| did not prepare extensively before doing this or doesn't have
| the skills to use automation/operational best practices
|
| How common is the knowledge of these best practices?
| boppo1 wrote:
| A hacker who got in from the outside would probably be
| sophisticated enough to at least 1. automate transfers 2.
| launder through monero or a tumbler or something
|
| This looks like someone who barely understands crypto because
| all of the transfers can be traced, and since they're
| apparently working manually and slowly, the audit-surface is
| huge.
| [deleted]
| [deleted]
| [deleted]
| api wrote:
| Is it a coincidence that the founder of FTX seems to be fleeing
| to Argentina?
|
| Of course one would assume he or his conspirators would do a
| better job, but maybe not if this busting out was initiated
| under time pressure.
|
| Once again almost everything in cryptocurrency proves to be a
| scam.
| Maursault wrote:
| > seems to be fleeing to Argentina?
|
| That could only work before 1997.[1]
|
| [1] https://www.congress.gov/treaty-document/105th-
| congress/18/d...
| matheusmoreira wrote:
| > Once again almost everything in cryptocurrency proves to be
| a scam.
|
| Once again people on HN hate on cryptocurrencies for no good
| reason.
|
| This isn't a cryptocurrency problem, it's a fractional
| reserve banking problem. These centralized exchanges are
| unregulated banks in disguise. It's no surprise to anyone
| that they exhibit all of the problems of unregulated banks.
| Problems such as "we used customer deposits to gamble, lost
| everything and are now insolvent".
|
| To think one of the reasons cryptocurrency was invented was
| to end the need for such things...
| jtbayly wrote:
| Well, if this was what cryptocurrency was created to
| prevent, then whether or not it's a scam, it's pretty well
| clear to me that it's useless.
| goodSteveramos wrote:
| >people on HN hate on cryptocurrencies for no good reason.
|
| Traditional bankers have spent an incredible amount of time
| and taken huge political risks to gain hold over the US
| money supply. They and people in the wall street sphere
| have a very good reason to hate on crypto, they just dont
| have any convincing arguments for people like us who dont
| want them controlling the money supply.
| solardev wrote:
| Crypto doesn't need Wall Street types to give it a bad
| name. It does that just fine on its own...
| goodSteveramos wrote:
| > In the summer of 2013, Bankman-Fried began working at
| Jane Street Capital, a proprietary trading firm,[2]
| trading international ETFs.
|
| Somehow Satoshi and Andreessen managed to not start a
| ponzi scheme and this guy did.
|
| Still waiting for your argument on why the big 7 wall
| street banks should be involved in the money supply
| instead of democratically elected leaders, which was my
| primary point.
| bboygravity wrote:
| "Once again almost everything in cryptocurrency proves to be
| a scam."
|
| This is like saying "once again almost everything in US
| dollars proves to be a scam" after Lehman fell.
|
| The sentence makes no sense at all to me.
| VagueMag wrote:
| Why would the attacker move the funds to any remotely
| censorable coin like DAI?
| [deleted]
| themihai wrote:
| I think he tries any avenue available. Even if 50% is lost
| it's still a good trade.
| VagueMag wrote:
| I guess I'm really ignorant of the whole DeFi ecosystem and
| how it works and so maybe this isn't feasible, but I would
| think keeping 100% of Bitcoin and Monero (even if their
| prices crash a further 80%) would be better than going into
| these very easily controlled stablecoin.
| hamiltonians wrote:
| Dai cannot be censored by
| VagueMag wrote:
| > _heavily exposed to USDC_
| hamiltonians wrote:
| this is not the same as protocol level censorship
| VagueMag wrote:
| If authorities wanted to freeze a subset of DAI, could
| they do so by directing USDC to refuse to back those
| tokens?
| X6S1x6Okd1st wrote:
| Nope they'd have to freeze the entire collateral that Dai
| has (~33% of all collateral they have rn), Dai could not
| freeze individual addresses and almost assuredly wouldn't
| even if asked.
| pcthrowaway wrote:
| There aren't USDC backing the DAI for any given DAI. If I
| have 5 DAI, you can't point to 3-4 USDC backing it (I
| think ETH backs it too).
|
| Even if Circle did freeze some of DAI's USDC, the Dai
| contract does not contain the ability to freeze user
| funds, and I believe is also not upgradeable
| haldujai wrote:
| > _The on chain activity makes this look like an individual who
| did not prepare extensively before doing this or doesn 't have
| the skills to use automation/operational best practices_
|
| This may be an understatement of their skill level. It seems
| the individual(s) also used a Kraken account to transfer funds
| and have been identified per their CSO.
|
| https://twitter.com/c7five/status/1591434844760076290?s=61&t...
| X6S1x6Okd1st wrote:
| I believe that is the white hat group. It helps to identify
| the exact txns & addresses they are referring to here.
| wklm wrote:
| what are the best practices for dumping a significant amount of
| illiquid shitcoins under time pressure?
| X6S1x6Okd1st wrote:
| The harmony bridge hack by Lazarus group (north korean actor)
| is a good example:
|
| The first address used is
| 0x0d043128146654c7683fbf30ac98d7b2285ded00
|
| It's a bit harder to trace using public tools because they
| immediately start splitting off the various coins to other
| addresses, but looking at just the USDC:
|
| They split it off into a single purpose address that is just
| responsible for converting it to ETH. They do this via
| private transactions utilizing uniswap v3 and a set amount
| just about every minute (they settled on ~2M). If you scan
| through them their slippage is very good here. If you wait a
| bit of time you let the arbitrage bots move funds from
| wherever is available so your slippage isn't so bad.
|
| account responsible for USDC conversion: https://debank.com/p
| rofile/0x58f4baccb411acef70a5f6dd174af78...
|
| This account was also responsible for a number of
| liquidations: https://debank.com/profile/0x9e91ae672e7f7330fc
| 6b9bab9c259bd...
|
| They again show good slippage and also show that they use 3
| different exchanges
|
| After they've converted everything to ETH with good slippage
| they then fan out to multiple accounts that then do a series
| of deposits into tornado cash at 100 ETH each.
|
| They were done with the liquidation within 2 hours. This
| attacker is still liquidating as far as I can tell
| x86_64Ubuntu wrote:
| What's "slippage"?
| wklm wrote:
| execution cost
| x86_64Ubuntu wrote:
| Thanks.
| papichulo4 wrote:
| Asking for a friend? :)
| [deleted]
| HaZeust wrote:
| Bulk bridge swap service IMO. Avalanche or Fantom would be
| your best bet right now.
| drexlspivey wrote:
| Looks like he sent the money to a kraken account under his real
| name lol. https://cryptoslate.com/ftx-hacker-identity-
| discovered-by-kr...
| MisterTea wrote:
| What if its a frame job?
| andrewinardeer wrote:
| Or identity theft occured for the malicious KYC process?
| zeroclip wrote:
| Restating my comment from Celsius unwinding one month ago:
|
| Three clear and obvious outcomes of this unwinding:
|
| 1. The crypto mantra "not your keys, not your coins" rings true.
|
| 2. Entrusting your personal financial data with a private company
| is sure to end in disaster, either by hack or court order.
| Privacy should be a basic and legally protected feature of
| blockchains.
|
| 3. Centralized Finance or CeFi is mostly a sham and deserves to
| be heavily regulated. Not to be confused with on-chain and
| transparent Decentralized Finance or DeFi platforms like Aave
| that have behaved predictably through this downturn, and have
| never required KYC.
|
| https://news.ycombinator.com/item?id=33153865
|
| We haven't seen privacy and KYC be an issue yet with FTX but data
| breach could be next after the money goes.
| maccard wrote:
| > The crypto mantra "not your keys, not your coins" rings true.
|
| Until crypto has a workable solution to this that doesn't rely
| on me keeping paper copies of my master key in a safe, it's not
| really viable for the masses without exchanges like coinbase
| and co.
|
| > Entrusting your personal financial data with a private
| company is sure to end in disaster, either by hack or court
| order
|
| Hard disagree here. In all my years of interacting with private
| companies they have always protected my money, even when it was
| taken from me fraudulently.
|
| > Centralized Finance or CeFi is mostly a sham and deserves to
| be heavily regulated.
|
| I dunno, cefi works pretty well for me.
|
| Of course the difference is that the cefi institutes and
| private companies are regulated traditional banks.
|
| > Privacy should be a basic and legally protected feature of
| blockchains.
|
| For a decentralised system that touts it's benefits as not
| being tamperable, a legal protection is worthless. If we
| require legal protections for blockchains what value does that
| prove over a centralised regulated system? Also, as it's
| decentralised and privacy focused there's nothing stopping
| someone in a country with a different interpretation of "legal
| protection" being involved.
|
| >We haven't seen privacy and KYC be an issue yet
|
| We absolutely have, with AML checks. Try cashing out 100k of
| crypto and using it as a deposit for a mortgage with a bank or
| lender, and see how open to it they are. This has been the case
| for at least 3-4 years here in the UK.
| zeroclip wrote:
| See social recovery wallets, paper wallet isn't only
| solution. Masses might prefer a custody on exchange but with
| that comes risk like in Celsius, FTX. Regulation needed to
| curb this risk so that those services feel just like the
| other "safe" CeFi services you are used to.
|
| > In all my years of interacting with private companies they
| have always protected my money, even when it was taken from
| me fraudulently.
|
| I was talking about data. On a long enough timeline, all
| financial services holding user data will be vulnerable to a
| breach. Money maybe also vulnerable but less so if regulated,
| I guess you are lucky to be interacting with regulated
| exchanges.
|
| > If we require legal protections for blockchains what value
| does that prove over a centralised regulated system?
|
| Regulate the companies, like Celsius and FTX. Users can use
| these on and off ramps into blockchain with more regulatory
| oversight and assurances their assets won't be leveraged
| without their consent.
|
| Your last point seems like misunderstanding. I say we haven't
| yet seen FTX user data and privacy be breached.
| fumblebee wrote:
| Surely it's _not_ a coincidence that on the day FTX announces
| bankruptcy, this gigantic hack occurs?
|
| Some folks in this thread are speculating this might've been an
| inside job.
|
| I suspect, it's likelier that hackers had been aware of a
| vulnerability for some time, had a plan to drain these funds, but
| decided to hasten the timeline on the basis of the news FTX was
| going under.
| stephc_int13 wrote:
| From a technical standpoint, how difficult it is to hack your
| own company?
|
| What would you do, if you spent years building a Crypto/Ponzi
| scam and that you were the first to know that it was going to
| crumble?
|
| Let it go and face the consequences? Or try to save a few bucks
| knowing that you don't have much more to lose if it fails?
| michaericalribo wrote:
| There's as much evidence for your theory as there is for GP's
| stephc_int13 wrote:
| Sure.
|
| But what would _you_ do, in this context?
| spydum wrote:
| if the coins are stolen or lost in some way, they cant be
| liquidated and thus shouldnt devalue the coin right?
| could reducing the availability actually be a way of
| preserving the market?
| HWR_14 wrote:
| I mean, the "inside job" theory seems to have more
| evidence, because as was pointed out hackers don't normally
| wait months to execute their attacks. And are more likely
| to use automation.
| lordnacho wrote:
| > From a technical standpoint, how difficult it is to hack
| your own company?
|
| It would be easy. If you're the founder might have special
| access to the keys, in fact you probably need to for
| emergency purposes. Whether that's a "hack" I don't know, it
| seems to just be theft.
|
| The real question is what do you do with the fact that you
| have the keys? If you are tempted to nick all the money, you
| might end up in a bad place.
| stephc_int13 wrote:
| Some more infos, it seems:
|
| https://twitter.com/gurgavin/status/1591434645295730689
| stephc_int13 wrote:
| What if you already are in a bad place?
| lordnacho wrote:
| If you use non-privacy chains, which are the common ones,
| you can get found out as soon as you try to do anything
| meaningful with it. Eg you move to some country, you want
| to buy a place, you find a seller willing to take crypto,
| ding-ding-ding, authorities will ask them where they got
| the coins from and there you are in your pool.
| stephc_int13 wrote:
| So, what you're saying is that some hackers are siphoning
| all the "funds" for no reason at all?
|
| Or maybe, if they are hackers they can use/launder those
| in some way or another, but if this is SBF behind a mask
| then he can't?
|
| I am far from an expert about money laundering
| techniques, but I find it hard to believe that it is
| impossible to launder, given the context.
| lordnacho wrote:
| There's probably something these guys know that ordinary
| HN people don't know about how to extract the money.
|
| Perhaps there's a jurisdiction where it's made a lot
| easier.
| stephc_int13 wrote:
| They don't even have to know much. They will be
| approached by people who does.
|
| Money laundering can be lossy and even very lossy, the
| result will always be better than zero.
| LawTalkingGuy wrote:
| You can use your many millions to move the market in
| small-caps and take your profits only from the other
| side.
| pclmulqdq wrote:
| A lot of the crypto "mega-hacks" we have seen in the past have
| involved insiders: either insiders getting phished or insiders
| doing the theft themselves.
|
| 7-8 digit hacks are often legitimate hacking, but suspiciously-
| timed 9 digit hacks have been inside jobs in the past.
|
| I'm giving more than even odds to the theory that a top
| executive of FTX wanted a retirement fund. Let's see if one of
| them disappears.
| TacticalCoder wrote:
| > I suspect, it's likelier that hackers had been aware of a
| vulnerability for some time, had a plan to drain these funds,
| but decided to hasten the timeline on the basis of the news FTX
| was going under.
|
| This make no sense to me. Thieves in the crypto currency world
| seize the opportunities before other thieves do: what more do
| "hackers" need than 600m? 700m? 900m?
|
| Why let a vulnerability unexploited, risking someone else to
| exploit it before you? Because 600m wouldn't be enough? (and
| before the price crash it was probably worth way more than
| 600m).
|
| I don't buy it.
|
| Insider job 100%. Especially seen that it's a know fact it was
| run by scammers.
|
| It's not as if we were talking about honest people playing it
| fair. We're talking about a scam.
|
| A more than shady company, ran by scammers.
|
| I call insider job unless proven otherwise.
| nooby12345 wrote:
| JamesianP wrote:
| They might've been in the process of transferring crypto
| silently for months and only now had to rush overtly enough
| to be spotted.
| BeFlatXIII wrote:
| Drain the funds before the creditors get to them.
| [deleted]
| yalogin wrote:
| Does anyone know what the state of fintech is now? Haven't heard
| much about them. There are a lot of companies like chime that
| received investments but not sure how much they can survive in a
| downturn
| trophycase wrote:
| Where are the regulators and enforcers when we actually need
| them? How is any high up in this institution not arrested yet?
| What the hell are they doing?
|
| Like is this a psyop to destroy crypto? Is this preferential
| treatment of SBF due to his donations/regulatory capture? Imagine
| if there was a mass shooter in a crowd of people and they just
| let him continue firing until he ran out of ammo, that's
| analogous to what's happening right now. Absolutely insane.
| paulpauper wrote:
| Regulators are like the fire trucking coming after the home
| burned down. Regulators seem to do a poor at at stopping people
| from being scammed. Scammers keep coming up with new types of
| scams that evade regulators, and people keep falling for them.
| rchaud wrote:
| interesting hypothetical with the mass shooter. crypto
| regulations being what they are, you would need some equivalent
| of a "good guy with a gun" to take out the bad one.
| threeseed wrote:
| > Like is this a psyop to destroy crypto
|
| Why would the government get their hands dirty when crypto can
| self-implode on its own.
| cuteboy19 wrote:
| I would remind you that classifying crypto to be securities
| would very easily make all of this illegal. Yet the crypto
| sphere fought tooth and nail against this.
| jl2718 wrote:
| https://twitter.com/jagoecapital/status/1590751676105125888
| anm89 wrote:
| It's pretty astounding that there was essentially no volatility
| in crypto markets along with this. To the point of being fishy.
| qeternity wrote:
| It shouldn't be astounding. The entire crypto market is
| controlled by a handful of powerful entities. It goes up when
| they want it to, and it goes down when they want it to.
|
| It crashes when they lose control, as they did earlier in the
| year. But at this point I don't believe there's enough riding
| on FTX that they've lost control again.
|
| FTX is a story of retail and normies getting rinsed. But that's
| zero sum. Who do you think ended up on the other side of the
| equation? Those people are in a decent position.
| anm89 wrote:
| Yeah, somehow, I don't think a yearlong 80-90% down is the
| choice of a cabal of all powerful overlords.
|
| I did forget to wrap my doorknobs in tinfoil today so maybe
| I'm just not thinking straight
| shorthistory wrote:
| 1. Who is transferring the funds?
|
| a. Bankman-Fried and associates
|
| b. insiders (disgruntled)
|
| c. outsiders (hackers)
|
| 2. Is it plausible that the transferred funds be laundered?
|
| 3. Can this altruism get any more effective?
|
| This story is utterly fascinating. It keeps getting better and
| better. I remember thinking Mt. Gox was wild. This fraud is
| second only to Ponzi.
| vishnugupta wrote:
| The simplest explanation I have (occam's razor) is a tie
| between 1.a and 1.b
|
| I've also heard rumors that inside bad actors pushed out a
| forced FTX app update to gain access to accounts. So the
| advisory is to uninstall FTX and not go anywhere near that
| website. Any money one has is unfortunately gone, wait for the
| bankruptcy proceedings to recoup it, if at all.
| vgatherps wrote:
| > I've also heard rumors that inside bad actors pushed out a
| forced FTX app update to gain access to accounts.
|
| If it's an inside job with this capability you'd likely
| already have such access?
|
| Only way is that somebody has access to push this, doesn't
| have access to the keys, and rewrites the app to send them
| assets or something. But the mass withdrawals imply the keys
| are compromised, and pushing the app would very
| unquestionably imply you?
|
| It's quite strange that a bad update was pushed at all since
| it implies that the bad actor doesn't have key access, but
| everything else they do does.
| drewmol wrote:
| Do you think it's at all likely they were able to
| exfiltrate the keys or escalate privileges by pushing the
| malicious update? It's not an iOS or android update from my
| understanding, just an update to the backend/content
| server.
| YossarianFrPrez wrote:
| Regardless of whether you are pro- or anti- crypto, the collapse
| of FTX, SBF's bubble bursting in a rather extreme fashion, and
| now this hack are more nails in the coffin for mainstream
| support.
|
| I am no fan of crypto myself, but it's interesting to think what
| would have to happen for crypto to burnish its image.
|
| Would key people have to voluntarily form some sort of
| coordinating council and self-regulate? Would they have to invite
| governments to regulate them better? Whatever the solution is,
| I'd be highly surprised if it could be done algorithmically and
| reassure anyone.
| fallingknife wrote:
| This stuff seems pretty crazy, but it's no worse than what
| happened in early 1900's Wall St. If crypto is ever going to be
| used as a real payments system, and something you would put in
| a 401k, it will need regulation similar to stocks. Not sure if
| it really works, though, because it would remove the anonymity
| and decentralization that are pitched as the entire advantage
| of the system.
| YossarianFrPrez wrote:
| I'd be curious to read anyone's thoughts on what would have to
| happen for crypto to improve its image at this point. Would
| being regulated exactly like traditional banking / finance be
| enough? More regulation? Would it be regulation + lower rates
| of fraud, hacks, collapse, and abuse? Or something else I'm not
| thinking of?
| can16358p wrote:
| Transparency. Crypto has almost everything needed to be fully
| transparent with a public ledger but exchanges (CEXes) still
| operate behind closed doors.
| winternett wrote:
| Depositor Insurance probably... But still, every single
| promise has been burnt in the crypto world.
| YossarianFrPrez wrote:
| Ooh, that's a good one. Who on earth would underwrite such
| a thing?
| petesergeant wrote:
| It would need a legal, non-speculation use-case that isn't
| much better solved by extant centralised systems
| dzink wrote:
| 1. Crypto and web3 is so tarnished in consumer minds, it cannot
| recover. The next big thing in this space needs stay away from
| those terms like the plague.
|
| 2. Energy has become so valuable these days and Crypto tech has
| become so WASTEFULLY, UNNECESSARILY energy intensive, that the
| next iteration needs to be as cost efficient and effective as
| software. Transaction costs need to begin and remain extremely
| low to none. Only a process that is always cheap to run will be
| able to take over micro transactions worldwide and unlock true
| financial freedom for the world.
|
| 3. Last but not least, any transaction tech that cannot cash
| you out cheaply and immediately and easily should be considered
| a ponzi scheme. Marketing your coin and not allowing people to
| liquidate it due to natural or artificial constraints, makes
| you immediately not a store of value but a scam and dangerous
| to the entire ecosystem of trust.
|
| The current financial system took a LOT of guardrails to keep
| people from tanking the trust in it for their own self gain.
| When you lose trust in the system, people pool their money out
| of it and go buy oil, or bricks, or stocks, or whatever else is
| actually worth something. If you want to dominate with a tech-
| based system. Trust should be completely unbreakable - as in
| identity needs to be absolute and bad actors banished from the
| system forever or some severe term that works as deterrence.
| himinlomax wrote:
| "Web3" was never mainstream, despite the obvious
| manipulations to try to make it so.
| hestefisk wrote:
| It was headline on Singapore FinTech Festival in 2021. I
| hope the organisers have warm ears now.
| ryanSrich wrote:
| 1. Remember ICOs? Web3, NFTs, and DAOs are going to be this
| cycles ICOs. The word crypto isn't going away, but everything
| else might.
|
| 2. Crypto's (as an industry) energy consumption is negligible
| when looking at other similar sized industries. POW is still
| the best method of mining.
|
| 3. 100% agree.
|
| > The current financial system took a LOT of guardrails to
| keep people from tanking the trust in it for their own self
| gain.
|
| The current financial system took decades to be rigged
| properly. It rewards politicians and elites. There's no
| denying that. The everyday man is left holding the bag 9
| times out of 10. This was the very reason Bitcoin was
| created. Thinking the government is going to save you is an
| insane idea.
| tootie wrote:
| I have never understood what problems crypto/Blockchain/web3
| is actually supposed to solve. I know it gained traction
| during the Libertarian/Austrian economics zeitgeist following
| the 2008 financial collapse. There was fear that the
| traditional fiat system was irreparably broken and couldn't
| be relied on. In reality regulators and central bankers did a
| pretty solid job (not perfect but they eventually got it
| right). DeFi was basically saying regulation is impossible to
| do without corruption so let's make transactions possible and
| regulation impossible. Not a great idea and now a fully
| failed experiment. Crypto as an asset class for profit was
| only ever an emergent property fueled by speculators. Crypto
| as actual currency is still valuable (mostly for criminals)
| so it may stay for a while but it's not going to make anyone
| rich ever again.
| [deleted]
| landemva wrote:
| One important feature for me is that nobody can take my
| coins from my wallet. Putting coins into an exchange or
| JPMorgan is not what I mean.
| dzink wrote:
| Trust is oil that makes economic engines fast and abundant,
| while distrust is sand - even a few specks cause damage.
| Trust between actors is key here, not just trust that the
| system won't malfunction. The next iteration has to make
| every participant as safe as can be (without raising the
| threshold for entry).
|
| I would approach the next iteration as software with a very
| robust test suite - there is a rich portfolio of financial
| scams out there and your system needs to help deter, detect,
| prevent, etc, as much of that as possible automatically. All
| human systems devolve down to policing rule compliance with
| time.
|
| Draw them in with ease of use that beats current financial
| tools (transaction fees for commercial transactions for
| example) and keep them in with trust (any bad actor has only
| one identity and loses it or is prohibited from using it for
| a time, - forcing them to use non-digital payment processing
| with much higher transaction costs.
| eastbound wrote:
| 1) To recover, a crypto will probably need to include specs
| about how the exchange should run.
|
| Exchanges have failed 3-4 times, and it seems they're part of
| a currency since people keep coming back to them. So there
| needs to be a system where I keep having control over my
| coins while they're in an exchange: ability to withdraw from
| the exchange, ability to approve a transaction.
| vishnugupta wrote:
| All of this is a solved problem in equity exchanges world.
| Escrows, SPIC etc. No need to reinvent a wheel that was
| invented after learning from so much of pain.
|
| So regulators either come down heavily on these exchanges
| or they will let retailers continue to get conned.
| cdiddy2 wrote:
| Its a solved problem in crypto too. Shapeshift allowed
| for swapping of funds while always having control of the
| keys, but it was given hell by regulators. If it were
| allowed to grow maybe things like ftx wouldnt have gotten
| so big
| mianos wrote:
| Like a normal exchange, audited and run by professionals
| not crypto bros. A walled depository, like a normal
| exchange. Running within a reputable regulatory framework.
| Nothing new here.
| saurik wrote:
| So, the only service you really need is something like
| Tether, not an exchange (as you can use decentralized
| exchanges). The service Tether operates--and I'm not
| claiming they aren't also some horrible scam, but I'm using
| them as the example because they are seemingly the minimal
| thing you need--is to act as the connection between fiat
| banks and decentralized chains, by supporting wire/ACH on
| one side and issuing a token on the other side (which they
| will later accept back for money). You don't need crazy
| complicated exchanges with their massive attack surface:
| you just need Tether. Now, is it possible to have a
| transparent Tether that you reasonably trust to be
| legitimate? I don't know. Maybe that's Circle--the people
| who do USDC, and which have been managing to compete with
| Tether for the most used stablecoin as of this year--as
| they do regular SEC filings and have fancy accounting
| reports? Alternatively, maybe if some large existing bank--
| such as Bank of America--were willing to issue a
| stablecoin, we'd all be willing to trust it to not be
| corrupt? But you really, honestly, don't need a full-blown
| centralized exchange for crypto to work: you just need a
| working stablecoin with enough easy-to-access liquidity
| that you can quickly buy in and out with a ton of money.
| nprateem wrote:
| A DEX
|
| https://particl.news/introducing-particls-basicswap-dex/
| jasonwatkinspdx wrote:
| All reasonable points, and potentially insurmountable
| challenges. Also whatever it is, needs to have incremental
| utility, otherwise there's no road from the present to the
| future for it.
|
| Also to repeat a minor rant of mine, anyone designing a would
| be successor to Etherium should think _very_ deeply about
| programming language theory and consult /engage with experts
| in that community. Much pain could be avoided by finding
| types and semantics appropriate to automated contracts.
| landemva wrote:
| You can build whatever language features you want, though
| it still should deploy into the EVM. Vyper is an existing
| alternative to Solidity.
|
| I would like to see more alternatives, so stop ranting and
| start building.
|
| https://www.quicknode.com/guides/smart-contract-
| development/...
| jasonwatkinspdx wrote:
| Observing that you can implement any semantics atop a
| turing complete mechanism isn't interesting. You're also
| ignoring the very interesting possibility of using a
| total language.
|
| I am perfectly fine expressing a criticism without trying
| to become the next ETH developer. That's a pointless and
| rude behavior. If you find my criticism uninteresting you
| are free to simply scroll on.
| Mistletoe wrote:
| About #1 I think you are wrong. History has shown us that all
| they need to forget it is a few days of green numbers again.
| The siren song of a few days of up only.
| notahacker wrote:
| I think the bigger damage is done to the institutional
| investors. They might have been able to ignore historic
| collapses of exchanges as the sort of thing that happens
| when a promising new asset class is dominated by amateurs
| that originally wanting to trade playing cards, not
| sophisticated professionals like them. But SBF was supposed
| to be the adult in the room, an ex-Jane Street trader
| focused on providing liquidity who wanted the market to be
| better regulated...
| TEP_Kim_Il_Sung wrote:
| Not everything that calls itself "crypto" is decentralized,
| peer to peer, or a crypto-currency.
|
| https://www.corbettreport.com/bitcoinpsyop/
| yieldcrv wrote:
| Shame poorly run companies and stop using them. Mainstream's
| insistence on conflating this with crypto masks the proper
| shaming of mismanaged companies.
| irusensei wrote:
| > I'd highly surprised if it could be done algorithmically
|
| Except this exists since the beginning?
|
| I feel people are missing the point. A decade ago a guy created
| some system that allows users to digitally self custody funds
| without a third party. That's self regulation to you.
|
| MtGox was not that. Celsius was not that and finally FTX was
| not that. Binance is not that. Those companies and their tokens
| conjured out of thin air are glorified digital cassinos folks.
|
| Government regulation? Will it make a difference? The stuff
| they did is already ilegal in pretty much any country isn't? By
| the way wasn't SBF trying to push regulations to hurt his
| competitors? Didn't he funded D and R candidates? Do you really
| think you can trust anything that can come out of regulation to
| be effective and not exploitable?
|
| FFS doesn't FTX US division have a NY bitlicense? That's
| probably the most strict license in finance.
|
| As for crypto reputation I see this as a big W for the core
| principles of self custody. Bitcoin "toximaxis" being right all
| along. Even here people often reply me they feel more
| comfortable using a third party. It's all good but perhaps you
| should instead trade stocks or idk commodities or wathever?
| imtringued wrote:
| I think this is the end of fully centralised exchanges. All
| exchanges will have to build their own Validium and customers
| will self custody their non fiat funds on that Validium and the
| centralised exchange merely runs the order book logic and fiat
| onramp.
| bamboozled wrote:
| Is it?
|
| Maybe this is part of the hardening of these systems? Part of
| the evolution which grows a thicker skin?
|
| What about all the trials of traditional currencies we all know
| and love?
|
| Not really a crypto fanboy, but I'm not sure this means the end
| of anything.
| BlueTemplar wrote:
| From the guy that did "FTX bankruptcy explained!" :
|
| "John Law - The First Financial Engineer - A History of Paper
| Money and The Mississippi Bubble" :
|
| https://youtu.be/H5uKPUPQSyQ
| douglaswlance wrote:
| This isn't a crypto failure. Crypto works.
|
| This is a human failure. FTX didn't collapse because of the
| technology. It collapsed because of human error.
|
| The fix is rather simple. If an organization looks like a bank
| and quacks like a bank; it should be regulated like a bank.
| [deleted]
| himinlomax wrote:
| Bad user interfaces have caused catastrophes (see for example
| Three Miles Island or the Mont Saint Odile Airbus crash) that
| have also been labeled "human error", but those catastrophes
| wouldn't have happened without the bad UI.
| MrMan wrote:
| as SBF himself allowed in the Bloomberg interview, this
| system only works if humans, driven by FOMO and greed, bid up
| the tokens. that, more than the technology underpinning the
| system, is a necessary condition for defi or centralized
| crypto to "work."
|
| defi is rife with hacks theft and rug pulls. but a form of
| fraud that is built into the entire ecosystem are tokenomics
| that carve out allocations of tokens to early holders, so
| they front run every one else.
|
| this cannot be escaped - there is no refuge from the grift
| _built in_ to the entire ecosystem. decentralized is a lie
| propagated to support a scam on everyone who got in later
| than early holders.
| albertopv wrote:
| All crypto currencies are a ponzi scheme. Change my mind.
| anomaly_ wrote:
| Do you know what a Ponzi scheme is?
| px43 wrote:
| Ponzi schemes by definition use opaque ledgers. Ponzi
| schemes are custodial. Ponzi schemes guarantee returns.
|
| There exist Ponzi schemes which have disguised themselves
| as cryptocurrencies, but the idea that _all_
| cryptocurrencies are Ponzi schemes demonstrates a complete
| ignorance of what a Ponzi scheme is.
| polygamous_bat wrote:
| > Ponzi schemes by definition use opaque ledgers.
|
| Why? To me a ponzi scheme is where the earlier
| "investors" get paid out with the money of later
| "investors". That's it. By that definition it's quite the
| "decentralized", somewhat stochastic ponzi.
| someguydave wrote:
| Your definition covers every investable asset.
| px43 wrote:
| Ponzi victims are told on paper that their "investments"
| are increasing in value, and that they can withdraw at
| any time, when in reality, the assets don't actually
| exist. Also a key aspect is that their balance only ever
| goes up.
| cdiddy2 wrote:
| your definition includes stocks. I suppose you might be
| right that stocks are a ponzi
| tehjoker wrote:
| they weren't back when the reason people bought them were
| dividends, now the only real exit is if the company goes
| bankrupt or is purchased. The intervening time is hard to
| describe as anything other than pure speculation and
| piling dupes on top of each other
| imtringued wrote:
| Take a look at RAI.
| everfree wrote:
| In a ponzi scheme, there is a fictitious business model
| that's purported to be turning a profit, and its lack of
| profit is hidden by secretly using new inflows to pay off
| old investors.
|
| In crypto, none of that is hidden. It's widely known that
| dollars cashed out by earlier investors come from the
| coffers of later investors. Since e.g. Bitcoin doesn't
| deceive people about being a profitable company, it's by
| definition not a ponzi scheme. It's important to use this
| terminology correctly.
| lamontcg wrote:
| "It can't be a Ponzi because they're honest about it
| being a scam right up front"
| paulgb wrote:
| Saying it's not a Ponzi doesn't mean everfree is
| defending it, it's just useful to have precise
| definitions about these things.
| everfree wrote:
| That's how the definition works, yes.
|
| By the way, who is the "they" that your sentence refers
| to?
| JamesianP wrote:
| well you have to draw a line somewhere. Call it something
| else if you want to criticize it. Like a bunch of fools
| racing towards a cliff.
|
| But if they're honest about something being a scam how
| can it be a scam? Seems like a paradox.
| lamontcg wrote:
| Literally only a paradox in places like Hacker News by
| people who are motivated to question calling crypto a
| Ponzi.
|
| I've got bad news. It is still a Ponzi if people are
| "honest" about it being a Ponzi, it is still a Ponzi if
| it started out as an investment idea and it went Ponzi as
| losses added up. Arguing that clear Ponzis aren't really
| Ponzis due to some kind of semantic rules is a gigantic
| display of "copium".
|
| The only real difference is the distributed and
| decentralized nature of the scams. And the CEO of
| JPMorgan has described crypto coins exactly as a
| "distributed Ponzi scheme" before Congress.
|
| If you wind up paying out redemptions with new deposits
| as fast as you can, right before you fail hard, then it
| was a Ponzi all along. That's it. That's the definition.
| JamesianP wrote:
| Do you consider social security, or for that matter all
| government tax and welfare systems which depend on growth
| via immigration to be ponzi schemes too?
|
| Why do you believe it is bad news to me? It's just
| semantics.
| everfree wrote:
| > It is still a Ponzi if people are "honest" about it
| being a Ponzi
|
| It literally isn't. Please go back to the definition,
| which requires a specific type of deception. If you
| wished, perhaps you could call crypto some kind of
| gamble, confidence game, or other category of scam.
|
| > Arguing that clear Ponzis aren't really Ponzis due to
| some kind of semantic rules is a gigantic display of
| "copium".
|
| From your tone it seems like you think I'm trying to
| defend crypto in this thread. I'm not. I'm trying to
| defend the meaning of a precise and descriptive term so
| that it doesn't get watered down to the point of being
| synonymous with "scam". Because if that were to happen,
| we would lose a useful phrase in the English language.
|
| It really ticks me off when people knowingly use
| terminology incorrectly like this out of anger. Just call
| crypto a scam or a con if you want. There's no need to
| let your anger leave a mark on the English language
| itself.
|
| > And the CEO of JPMorgan has described crypto coins
| exactly as a "distributed Ponzi scheme" before Congress.
|
| Well he was using the term "ponzi scheme" incorrectly
| then, and should have used a more general term like
| "scam". Really, this isn't hard. Just read the
| definition.
|
| It's also worth noting that JPMorgan executed their first
| trade on a public ("crypto coin") blockchain last week,
| so maybe he ended up changing his mind? Or maybe there's
| some internal consistency with JPMorgan investing effort
| in things they believe to be ponzi schemes - I'm not one
| to try to make that distinction.
|
| > If you wind up paying out redemptions with new deposits
| as fast as you can, right before you fail hard, then it
| was a Ponzi all along. That's it. That's the definition.
|
| That's not even how cryptocurrency works. Not even beanie
| babies or tulips worked like that.
| JamesianP wrote:
| > From your tone it seems like you think I'm trying to
| defend crypto in this thread.
|
| Yes I got ranted at for suggesting "fools racing towards
| a cliff" as a better description. These threads appear to
| have attracted a lot of people looking for a fight and
| will jump on any nuanced post as a "pro" side.
| everfree wrote:
| I've noticed this phenomenon a lot, and I'm not exactly
| sure what causes it. If you correct someone's
| understanding of the software, half the time they'll try
| to pick a fight with you over being a supporter of it. I
| haven't experienced that while discussing any other type
| of software project.
|
| Perhaps it results from the human tendency to try to
| separate "good guys" from "bad guys". Whatever it is, I
| find it really gets in the way of productive discussion.
| lamontcg wrote:
| Cite that definition.
|
| And that is how cryptocurrencies work. There's net
| inflows of currency, and net outflows of currency and
| there is a systemic bank balance at any one time of
| currency. If outflows exceed inflows for long enough then
| the balance is drained to zero and the music stops. That
| is a Ponzi. Madoff's Ponzi worked up until the 2008
| recession hit him with redemptions and outflows and his
| bank balance got drained.
| everfree wrote:
| > A Ponzi scheme is a form of fraud that lures investors
| and pays profits to earlier investors with funds from
| more recent investors. Named after Italian businessman
| Charles Ponzi, the scheme leads victims to believe that
| profits are coming from legitimate business activity
| (e.g., product sales or successful investments), and they
| remain unaware that other investors are the source of
| funds.
|
| Key phrases:
|
| * the scheme leads victims to believe that profits are
| coming from legitimate business activity
|
| AND
|
| * they remain unaware that other investors are the source
| of funds.
|
| Neither of those apply to cryptocurrencies. Nobody
| believes that Bitcoin conducts business activity, and
| everyone is transparently aware that other investors are
| the source of cash-out funds.
|
| > There's net inflows of currency, and net outflows of
| currency
|
| Commodities (fungible property of market value, like
| cryptocurrencies) don't have net inflows or outflows.
| Commodity prices are determined by order books which are
| in turn determined by supply and demand, not by capital
| flow. When a buyer and seller meet and exchange money for
| a piece of property (like a bitcoin), there is no
| "inflow" or "outflow", property just changes hands.
|
| > there is a systemic bank balance at any one time of
| currency.
|
| There is no "systemic bank balance at any one time of
| currency". That's not how cryptocurrency works. Where is
| Bitcoin's bank account, and what is Bitcoin's bank
| account balance?
|
| > If outflows exceed inflows for long enough then the
| balance is drained to zero and the music stops.
|
| Cryptocurrencies have no such inflows, outflows, or
| "balance". They aren't like investment funds or companies
| - they behave like physical objects, like beanie babies
| if you will. The beanie baby crash wasn't caused by any
| kind of beanie baby "balance" being drained to zero, it
| was caused by people collectively deciding that beanie
| babies were no longer worth a premium price.
|
| > Madoff's Ponzi worked up until the 2008 recession hit
| him with redemptions and outflows and his bank balance
| got drained.
|
| Bitcoin does not have redemptions, outflows, or a bank
| account. It's a series of rocks that people trade between
| themselves, sometimes at a higher price, sometimes at a
| lower price.
|
| You seem to be confused about the definition of
| cryptocurrency. Should we go over that next?
| [deleted]
| polygamous_bat wrote:
| > This isn't a crypto failure. Crypto works. This is a human
| failure.
|
| "Guns don't kill people, people kill people."
| mjburgess wrote:
| A point no one who wants to ban guns would disagree with.
| pksebben wrote:
| the edge here being that if a tool is powerful enough to
| take someone's head off, we should probably do something
| to mitigate the risk of folks using it.
| bmitc wrote:
| People keep saying this, but I don't follow. FTT was a token
| manufactured out of thin air. Crypto works as a concept, I
| suppose, but people saying crypto works is like the people
| that say Agile works. How long do we have to wait to see
| crypto working? Where are the success stories of crypto?
| There's a long laundry list of hacks, scams, company
| failures, "tokenomics", NFTs, <x> on blockchain, etc. Saying
| crypto works as a technology base is not enough. Currencies
| and tradeable "assets" are a social thing. It isn't just a
| technology.
| capkutay wrote:
| FTX is a centralized (not DeFi) exchange that used their
| own coin as collateral and obfuscated their liquidity. This
| wouldn't be possible in open decentralized exchanges that
| many in web3/crypto were advocating for. However SBF made
| it his mission to lobby regulation on DeFi and a blind eye
| to CeFi exchanges like his own.
|
| https://www.politico.com/newsletters/morning-
| money/2022/10/2...
| hiq wrote:
| You just get a different set of tradeoff on a
| decentralized exchange. E.g. many users don't have the
| basic opsec required to protect their private key without
| losing it.
|
| For a cryptocurrency owner taken at random, I think it's
| likelier that they make a mistake with their private key
| than they lose tokens held in a Coinbase (or another CEX
| among the less dodgy, regulated, etc.) account.
| boppo1 wrote:
| >basic opsec required to protect their private key
| without losing it.
|
| Exactly. I've long wondered if there's any way to
| overcome this without essentially going back to a
| 'trusted broker/custodian' model
| vkou wrote:
| > many in web3/crypto were advocating for.
|
| If many people in this space are advocating for
| decentralized exchanges, how come everyone uses
| centralized ones?
|
| If there's ever a time and place for voting with your
| wallet, this seems to be it, and the wallets are speaking
| loudly and clearly.
| zeroclip wrote:
| The wallets are speaking clearly, DeFi volume is through
| the roof right now.
|
| https://defillama.com/dexs
|
| A lot of people put money on CEX because they are
| ignorant, or willing to take on some risk for slightly
| cheaper and faster trades. Those people probably regret
| their decision now. If they used Uniswap and Aave they
| could not have withdrawals paused because of one
| company's insolvency.
| apienx wrote:
| "If many people in this space are advocating for
| decentralized exchanges, how come everyone uses
| centralized ones?"
|
| Convenience.
| boppo1 wrote:
| DeFi doesn't interface with fiat.
| naijaboiler wrote:
| Its really a viewpoint common to tech workers. They see and
| solve the technological aspects of a problem while
| remaining blind to the larger more complex social aspects
| that remain unsolved, but think the problem is solved.
|
| Here are other examples:
|
| - promising self driving cars (driving is more than a
| technical activity, it's a social activity. AI is nowhere
| close to driving the easier technical aspects, much less
| the more complex social aspects)
|
| - AI is already better than or will replace doctors. As of
| all doctors do is look at symptoms and up with diagnosis.
| The social part of medicine is the larger job by far, not
| diagnosis.
|
| - algorithms can't biased. My AI predicts some function
| that has some real life impact. That the input data is
| biased, and therefore the output data is just as biased or
| even more biased. Well that's not my problem. I only build
| models, and lines of codes are not biased. But the result
| of your work is being used in the society to perpetuate
| bias. It's not okay to remain wilfully oblivious to that.
| Nursie wrote:
| This is what the entire cryptosphere always seems to miss -
| society. People have pitched cryptocurrency/blockchain/NFTs
| for all sorts of things, and every one is a pure tech
| solution that misses the social aspect.
|
| I had someone try to tell me blockchain voting would fix
| Russian democracy, because it would ensure transparent,
| accountable elections. OK, so how are you getting it in
| there? Just going to stroll into the Kremlin and make the
| current leadership implement it? You'll be laughed at
| shortly before your arrest. No, fixing Russian politics is
| primarily a social issue. Transparent, accountable voting
| _could_ be part of a possible future effort at reform, but
| first you need to somehow gain the power to implement
| reform at all.
|
| Coming up with a software solution alone does nothing. And
| this is what is often missed.
|
| "I can imagine a better future in which my amazing software
| solution plays a pivotal role, therefore if I create that
| software, things are sure to turn out that way"
| netheril96 wrote:
| Lumping diagonally opposed things (centralized coins like
| FTT or decentralized coins like BTC) under the same
| category (crypto) is quite misleading.
|
| > How long do we have to wait to see crypto working?
|
| BTC (on chain) is still working as intended, after all
| these years.
| YossarianFrPrez wrote:
| It's an interesting level of abstraction question. On a
| fine-grained level, yes, BTC works algorithmically as you
| have pointed out, and FFT is not the exact same thing as
| BTC. The question the is whether either of these things
| work socially / for society.
|
| Whether it's accurate or not, I imagine non-experts would
| regard the difference between BTC and FFT as pretty
| negligible, perhaps akin to the difference between
| "social media" and IG vs. Reddit.
| Bootvis wrote:
| The creation, distribution and governance are completely
| different. The public may not care but in the long run we
| mow see it matters.
| grumpyprole wrote:
| > BTC (on chain) is still working as intended, after all
| these years.
|
| It's certainly working on destroying the planet with its
| obscene energy requirements.
| irusensei wrote:
| Energy which was paid for. If there is a problem with
| that then price it accordingly.
| me551ah wrote:
| Energy which is used to mindlessly calculate dumb hashes,
| trillions of which are discarded every second for the
| winning 'hash'. Proof of Work is basically lottery, but
| which consumes energy instead of tickets.
| irusensei wrote:
| Not a miner. I do use a computer to calculate dumb stuff
| all the time for entertainment purposes.
|
| I mean... Cyberpunk 2077 could run acceptably on an
| integrated 65W APU but instead I chose to crank
| everything on max with ray tracing through a 4090 just to
| see some dumb frames on a screen that are discarded at a
| hundred per second.
|
| And I don't ever remember having to ask permission to use
| the kW h I'm paying for.
| notahacker wrote:
| I'm not sure gamers have over-specced their gaming
| machines to the extent they're using more electricity
| than a medium-sized European country...
| irusensei wrote:
| Are you suggesting the combined power usage of gamers
| specing their machines above average recommended system
| requirements is less than the power used by mining
| industry? I'm skeptical about that.
|
| And its beside the point because again its none of your
| business.
| notahacker wrote:
| > Are you suggesting the combined power usage of gamers
| specing their machines above average recommended system
| requirements is less than the power used by mining
| industry? I'm skeptical about that.
|
| Yes, of course, I am absolutely suggesting that
| overspecced gaming PCs played by a minority of gamers in
| their spare time don't use more electricity than a medium
| sized developed country (or indeed the 24/7 running of
| industrial scale server farms deploying chips designed
| because even the most powerful gaming chips weren't
| anywhere near energy intensive enough to win the energy-
| burning competition). Why would you possibly consider the
| small number of people using high spec gaming PCs a few
| hours a day use more electricity than a developed world
| country?
| irusensei wrote:
| Still skeptical and like I said I would not care if they
| do because it's none of my business how they use the
| energy they pay for.
|
| Why don't you go for power companies instead and demand
| clean energy investments? Might be a better use of your
| activism instead of just going for people using their own
| stuff in a way you don't like. It's not going to end
| well. I'm pretty sure the insane degrowth narrative will
| target gaming or other power intensive recreative uses
| sooner or later but that's another discussion.
| cesarb wrote:
| > just to see some dumb frames on a screen that are
| discarded at a hundred per second.
|
| If these frames were really discarded (that is, not shown
| on your screen), then yes, it would be a waste. But my
| understanding of your example is that these frames were
| displayed, and their light reached your eyeballs.
| irusensei wrote:
| They are if the thing about the eye being limited to
| 60FPS is true.
| me551ah wrote:
| Calculating hashes in a loop is dumb, cyberpunk is a
| pretty complex piece of code which also utilises GPU
| aspects like ray tracing,
| paulgb wrote:
| Nobody has the power to unilaterally "set the price" of
| energy, it's set by the market.
|
| Free markets are great for a lot of things, but pricing
| in externalities isn't one of them.
| irusensei wrote:
| Agreed but I think people should be looking at power
| companies and how they generate energy for accountability
| instead of going for industry A and B. Wiping PoW from
| the face of the earth won't make those coal plants in
| China go away.
| paulgb wrote:
| No, but it will reduce the demand for what they produce.
| This isn't hypothetical, even in the US there are
| examples of coal/natural gas plants getting brought
| _back_ online for bitcoin mining (finger lakes NY;
| Hardin, MT)
| [deleted]
| systemvoltage wrote:
| I am not a fan of "destroying the planet" arguments
| mainly because anything goes, super ambiguious and not
| very precise. Buy our razors because cartridge razors are
| destroying the planet! https://bandisposablerazors.org/
|
| Destroying the planet = Can't question it, can't argue
| about it, it is the end all of all arguments. How could
| you ever oppose something that destroys the planet?
|
| They all sound the same:
| https://en.wikipedia.org/wiki/Greenwashing
| kevinak wrote:
| On top of being hard to argue against, it just isn't
| true. It's a net positive for the environment, at least
| it will be in a couple of years:
| https://batcoinz.com/50-landfills-mining-bitcoin-a-zero-
| emis...
| systemvoltage wrote:
| Generally though, conceptually the argument goes like
| this "You can't do X because it destroys the planet.
| Since we cannot destroy the planet, there is no other
| option but to accept banning of X". But, there is no
| limits or guards to this. You can easily go down the
| slippery slope and say X is the city of Chicago that
| needs to be destroyed for the collective good. It
| consumes too many resources.
|
| Riddled with subjectivism. You cannot do less since there
| are no objective limits to what is "acceptable levels of
| destruction of the planet" means. It has a different
| subjective weight to different entities arguing the
| position. In the limit, this would mean we erase humanity
| all together and leave the planet alone.
|
| You can bully a lot of things your way before any one can
| speak up against it. There is a level of insidious moral
| superiority built into it which makes it prime for
| exploitation. Corporations are doing exactly that.
| pksebben wrote:
| is this paper saying that Bitcoin _will_ all be mined
| using methane, or that it _could_? because those are two
| vastly different conclusions.
| kevinak wrote:
| I don't believe it's saying either. It's saying that the
| trend is towards net zero emission and that this will
| happen by the end of 2024. After that I would assume we
| go into the negatives and improve the current situation.
|
| "Based on the estimated average growth rate of bitcoin
| mining operators using vented methane of 6.9 MW/month,
| the Bitcoin network will become Carbon Negative in Dec
| '24."
| ipython wrote:
| So... we will solve global warming by running a network
| of computers with custom ASICs at 100% utilization,
| cooling them as necessary, performing useless
| computation, so a cabal of technobros can move imaginary
| internet money around 10 times per second?
|
| Oh and increasing the power usage of this fire pile will,
| as you say, "improve the current situation"?
|
| Your point is that the only way we can avoid burning
| methane is to use that to power bitcoin mining rigs???
| kevinak wrote:
| No, I've never claimed that. Regardless of what you think
| about Bitcoin, if it's useless or not, don't you agree
| that net negative is better than zero?
|
| Burning methane (flaring) is most definitely an
| improvement over not doing it. That's just a fact. It
| accounts for about 20% of global emissions and is 25
| times as potent as CO2.
| https://www.epa.gov/gmi/importance-methane
|
| You would use Bitcoin mining as a monetary incentive to
| flare methane. You could do other things but it requires
| more infrastructure investment and might not even be
| possible in certain locations that are far from where the
| electricity would be used.
| ipython wrote:
| I would agree that not performing useless computations is
| better than performing useless computations. If monetary
| incentives are all we need, then just use tax incentives
| to do so. That seems much easier than shipping mining
| rigs and the corresponding cooling to locations
| apparently too far from civilization to produce energy
| for anything useful.
| Stention314 wrote:
| This is wrong and green washing.
|
| We could also use this energy for better things than
| Bitcoin.
|
| And while BTC doesn't make any value besides moving money
| from one person to another, it also produces hardware
| garbage like ASIC chips and power supply.
|
| It also steals demand from others too.
|
| There is only downside for most of us than benefit of
| allowing Bitcoin mining independent of it's source.
| kevinak wrote:
| No, this is not wrong. You can't magically just "use it
| for something else". That's not how this works. You need
| to generate electricity where it is needed (or transport
| it, which costs money).
|
| If there are landfills out there that are just spewing
| methane gas (20x worse than CO2, btw) into the
| atmosphere, why not make sure that is burned and used
| more efficiently? Please show me a realistic plan to do
| this. Bitcoin does it without forcing anyone and without
| taxes directed towards it.
| netrus wrote:
| Aren't landfills close to civilization usually, so it
| would not be hard to transfer the electricity some miles
| to charge Teslas, heat homes or power etc.
|
| Where are landfills too remote to transport electricity
| away from?
| kevinak wrote:
| I'm sure that's the case for some of the landfills, but
| definitely not all of them.
|
| In the US 70% of the methane from landfills is vented,
| rather than flared. That means that for some reason,
| either it's too expensive to do or something else is
| blocking this. And that's just the US.
|
| You can also imagine that landfills in the developing
| world are better targets. Infrastructure is not as good
| there as it is in the US or in Europe.
| Stention314 wrote:
| The profit is too small.
|
| Easy to solve with laws. Shouldn't be allowed anyway to
| just pick the good things from a gas field...
| netheril96 wrote:
| Well, maybe I should raise the example of ETH instead. It
| is still working as intended, decentralized, and
| consuming little energy.
| bmitc wrote:
| > Lumping diagonally opposed things (centralized coins
| like FTT or decentralized coins like BTC) under the same
| category (crypto) is quite misleading.
|
| Crypto generally means digital currency, does it not? I
| think leaving them out would be actually misleading.
|
| > BTC (on chain) is still working as intended, after all
| these years.
|
| Working in what sense?
| wsc981 wrote:
| _> Working in what sense?_
|
| That you can securely and cheaply transact value without
| a third party being involved?
|
| That governments can't directly block your account the
| way Trudeau blocked protestors bank accounts?
|
| Probably a few other ways as well ...
| Stention314 wrote:
| Bitcoin fees are often not cheap at all.
|
| Just a week ago someone got cought and the fbi took his 3
| billion dollar worth of BTC.
|
| Sending crypto to someone in Iran or Russia is against
| the law independent of how you do it.
|
| And just because you can send BTC to Iran someone in Iran
| also needs to exchange it to something real again.
|
| While banking is more restrictive, when you go to your
| bank with your passport, you actually can recover your
| account. I know someone who lost 10k because he lost his
| key.
|
| For most people it's saver and easier and they are not
| affected and don't care about all those BTC/crypto
| benefits at all
| kevinak wrote:
| You need to start backing up your statements with facts.
| Please show us that bitcoin fees are "often not" cheap at
| all.
|
| Here's some actual data you can look at:
| https://mempool.space/graphs/mining/block-fee-rates#all
|
| Look at the "Min" fee rate; regularly very close to 1.
| That's $0.02 at current prices.
| Stention314 wrote:
| Sources? I was buying and transferring bitcoins over 8
| years as I bought weed through it.
|
| Of course you can even pay 0 but you know it's not the
| normal someone would wait days for the transaction going
| through.
|
| You clearly did not use Bitcoin often enough otherwise
| you could just looked the spikes up yourself. That first
| corona year was even worse with the fees.
| foogazi wrote:
| > This is a human failure
|
| Is there any crypto out there without humans ?
|
| Is there an undo button to reverse the transaction?
|
| All financial systems involve humans
| miguelmota wrote:
| > Is there any crypto out there without humans ?
|
| What OP is referring to is that you don't need to trust
| people if the dex is on-chain and verifiable. FTX was a
| non-transparent and insolvent centralized exchange which
| wouldn't be possible if it was on-chain because anyone can
| see the funds that are available and the protocol would not
| allow leverage backed by non-existing collateral.
|
| > Is there an undo button to reverse the transaction?
|
| No there isn't. This is a double edge sword.
|
| > All financial systems involve humans
|
| To a degree, but centralized exchanges have more knobs
| controlled by humans while an on-chain dex and just be
| deployed once and require no human intervention. A dex can
| be audited fully on-chain and anyone can see if the
| contract has any master holder keys. The FTX fiasco is
| because they own all your crypto because they have the
| master keys. The future of finance is people being in
| charge of their own money and where no unexpected entity
| can arbitrarily inflate the supply, which is only possible
| with crypto.
| blueblisters wrote:
| What foogazi was perhaps suggesting is that no financial
| system can work if it doesn't account for fundamental
| human behavior - we make mistakes and we are greedy if
| not held accountable "off chain".
|
| The blockchain is perfect when everyone acts in good
| faith and makes no mistakes.
|
| In the real world, that's not the case. Unfortunately,
| you need centralized institutions to regulate financial
| transactions, control the supply of money and enforce
| laws when they're broken, reverse mistakes when they
| happen.
|
| > The future of finance is people being in charge of
| their own money and where no unexpected entity can
| arbitrarily inflate the supply, which is only possible
| with crypto.
|
| This is not the future, and it'll almost certainly never
| happen with crypto.
| miguelmota wrote:
| Then what is the future? Certainly not the government
| going haywire with the printer. It's impossible to
| trustlessly verify the exact number of US dollars in
| circulation, but it's trivial to do with
| cryptocurrencies.
| lottin wrote:
| Removing the possibility for human intervention doesn't
| make things more resilient quite the contrary. Removing
| human control of public policies, such as those involving
| the management of public resources, is downright anti-
| democratic and dumb. If you people intend to build a
| monetary system, you need to educate yourselves about
| monetary systems. The money supply must be managed (i.e.
| inflated and deflated in your unconventional parlance) in
| order to keep prices stable. An currency in which prices
| are not stable will never be used as currency by
| businesses because it would put them in danger of going
| out business due to price swings. Restricting the
| issuance of currency doesn't make the supply of such
| currency fixed. Look up how money is created by the
| banking system. Only a small part of the money supply is
| money created by central banks.
| miguelmota wrote:
| The money supply managed by an on-chain protocol where
| it's fully open, trustless, and predictable is 100% times
| better then a small group of people at the treasury
| deciding to print money and inflate peoples savings
| always.
| lottin wrote:
| > is 100% times better
|
| I think this says it all.
| imgabe wrote:
| There is the same undo button that exists for every other
| financial institution that commits fraud: lawsuits.
| Thorrez wrote:
| And if you can't find the person to sue because the
| person is an anoymous hacker? With fiat the court will
| tell the banks to reverse the transactions.
| miguelmota wrote:
| If someone sends physical cash to a person across the
| world, is there an undo button?
| imgabe wrote:
| That isn't the case here. Anyway, people get defrauded
| through banks all the time with advance fee fraud, 419,
| and other scams and banks don't reverse those.
| hestefisk wrote:
| Spot on. Money is a social construct after all and thus
| subject to human fallacy.
| baq wrote:
| The fraud going on in there was not human error. Reuters
| wrote about a backdoor sbf used to make transactions with ftx
| assets off the books, without alerting controls. If this is
| true, it's oceans eleven stuff.
| Thorrez wrote:
| If a bank gets hacked, generally the transactions get
| reversed. If a cryptocurrency exchange gets hacked, that
| generally can't be reversed.
|
| Regulation can make things more secure, but I don't think it
| can realistically stop all attacks. Regulation is slower than
| attackers. The ability to reverse transactions is what's
| really needed to prevent attackers from getting away with
| money.
| lottin wrote:
| Who will be in charge of deciding which transactions need
| to be reversed and when? It seems to me that the ability to
| have reversible transactions is at odds with the
| descentralised nature of blockchains.
| iamacyborg wrote:
| Tell that to the folks who forked Ethereum.
| Thorrez wrote:
| I agree with you. There doesn't seem to be a good way to
| allow transactions to be reversed while keeping
| decentralization.
|
| My point is that this decentralization is bringing in a
| risk that traditional banks don't have. So saying
| "regulating it like a bank will make it as secure as a
| bank" is incorrect.
| threeseed wrote:
| > it should be regulated like a bank
|
| And how would they implement KYC/AML regulations which are
| fundamental to banking ?
| TEP_Kim_Il_Sung wrote:
| By force, if necessary.
| threeseed wrote:
| No technically. There are seemingly endless ways to move
| funds anonymously.
| MacsHeadroom wrote:
| There's endless ways to move cash.
|
| If/when the movement of cash/crypto is peer-to-peer or
| interacting with a machine only (a machine that gives
| quarters for dollar bills or a DEX, for example) KYC is
| entirely unnecessary.
| threeseed wrote:
| Dealing with large volumes of cash is very difficult.
|
| It's physically large so you can't move it between
| countries with drawing attention from customs and
| security. You can't exchange it between currencies easily
| since brokers are required to implement KYC/AML. Banks
| have automatic triggers on their internal systems to
| notify regulators if you deposit/withdraw large sums.
|
| And if it's being tracked then washing it requires you
| having to go through exotic means like poker machines
| since all simpler options have been locked down over the
| decades.
|
| It's one of the reasons crypto is so popular with states
| like North Korea, Iran etc because it's scalable enough
| to allow them to move billions.
| hestefisk wrote:
| Indeed. Beyond the failure of human greed in the crypto Ponzi
| schemes, FTX is also a massive regulatory failure. These
| firms have been allowed to play with people's money for too
| long.
| tenpies wrote:
| It's probably no accident that SBF made substantial
| donations to one of the major US political parties. And by
| substantial, I mean that party's second biggest donor in
| the '20-21 cycle.
| JamesianP wrote:
| I think the new laws and regulations are coming out as we
| speak. Since it's such a new area they have been slow. The
| SEC just hired a bunch of new people. They have been busy
| prosecuting people too.
|
| I also think FTX has been violating plenty of them already
| from the sounds of it. They probably thought they were
| being clever, but wouldn't pass the "duck test".
| YossarianFrPrez wrote:
| I agree that the algorithms powering crypto are sophisticated
| pieces of technology. Just look at the zero-knowledge proofs.
|
| The thing is that "not being regulated like a bank" is
| exactly what many people like / liked about it. (Yield
| farming, using DeFi for mortgages, etc.)
|
| What I'm saying is that Crypto seems to be headed to being
| taught alongside, if not the Therac-25, then the Mars Climate
| Orbiter (which was lost to some people working in metric vs
| standard.)
| jl2718 wrote:
| A CEX is "like a bank" because it's a human that takes
| custody of assets, not because it does trades and loans.
| Smart Contracts, however, can't be regulated the same way
| that human custodians can, but they are also designed not
| to be able to do unexpected things.
| threeseed wrote:
| There have been plenty of examples of Smart Contracts
| doing unexpected things because all of the myriad of edge
| cases were not anticipated for.
|
| It's one of the reasons the classic financial system
| works so well because it has the flexibility of manual
| fail-safes in cases where mistakes have been made. Smart
| Contracts will never really work unless it has the same.
| pksebben wrote:
| I don't really have a dog in either kennel, but something
| about the idea that a human absolutely must be in the
| control loop for a currency to work feels... not wrong,
| but maybe "not wrong so far".
|
| We've managed to get computers to do some really batshit
| stuff. Drive cars, make art, algorithmically trade to a
| level of success a human could never dream of, etc. I
| don't know if a solution to the problem of managing the
| stability of a currency is around the corner, but I'm
| fairly sure somewhere in the future it exists.
|
| And then, I can't help but think of how just about every
| disaster we've had in the financial system was a result
| of the humans with their hands on the economic knobs
| being knobs themselves. The solutions we provide when in
| crisis wouldn't be necessary if we didn't have such a
| strong tendency to drive ourselves off cliffs - not to
| mention that our current financial system has gotten so
| complicated I'm not sure there's anyone out there who
| truly, thoroughly, groks it without being reductive.
| ISL wrote:
| If there were a clear and well-regulated equivalent of
| Tether, with obvious and transparent dollar-backing, I
| suspect it would find a lot of usage.
|
| Might cost $1.15 to mint a new USD-coin redeemable for
| $1.00, but I suspect there would be an appetite.
|
| Massive volatility and the occasional collapse of a crypto-
| bank are probably hindering the appetite of many people for
| anything in the crypto market. That population probably
| would dwarf any yield-farmers.
| atdrummond wrote:
| Right now stablecoins are a pretty profitable business
| because of interest rates.
|
| An attestation report available 24/7 should be generated
| easily if you're doing things properly, as well as
| frictionless burning and minting.
|
| Note: I work for Glo, a non-profit stablecoin, so have a
| vested interest in this space. I do not and am not
| speaking on behalf of our group.
| everfree wrote:
| > If there were a clear and well-regulated equivalent of
| Tether, with obvious and transparent dollar-backing
|
| There are several. I compiled a list of them a few months
| ago.
|
| https://news.ycombinator.com/item?id=31381864
| me551ah wrote:
| Crypto works for what use case exactly? Crypto payments take
| much longer time than traditional credit card ones , are
| barely supported by most websites and in many cases cost more
| in transaction fees than credit cards.
|
| And with a lot of people storing their money in these major
| crypto banks , what we now have is a fairly centralised
| structure which kind of defeats the purpose of crypto. Worse,
| these banks also hold each other's tokens similar to what
| your normal banks do. And if that's not enough some of them
| even do fractional reserves and use the real money they get
| for investing.
| rabite wrote:
| Perhaps for the use case of the underbanked, which is the
| majority of the world. That I need to wait for confirmation
| on the blockchain for a crypto payment is orders of
| magnitude faster than my other option, which is wait for
| someone to manually bring in foreign currencies by train.
| My country is not on SWIFT. My passport will not allow me
| to get a bank account in any country that would let me
| process credit cards. I am not allowed to use Paypal.
|
| This kind of comment is the epitome of the Western
| privilege -- your governments cut off entire countries from
| the banking system, deny their own citizens access to banks
| because of their political beliefs, and then tout the
| alleged superiority of your credit cards, which are now
| denied to truckers and Kanye West by the same companies
| that were happy to do business with Pornhub when they were
| knowingly facilitating the monetization of child sex
| slaves.
|
| Credit cards and United States dollars are the tools of
| thieves, thugs, rapists, and warmongers. Bitcoin works for
| the use case of not staining your hands with the blood and
| tears of their victims, at the very least.
| me551ah wrote:
| I'm from India, one of the most populous countries in the
| world. And we have instant online transfers with no
| transaction fee and it's called UPI.
| kevinak wrote:
| Is everyone in India banked? How do you transfer money
| outside of the India? Can you do that insta fly with UPI
| as well?
|
| There are more countries than India, I'd suggest maybe
| taking a look at South America, Africa and Asia.
| ipython wrote:
| This argument always intrigued me. Once you point out
| cryptocurrencies don't actually solve the unbanked
| problem for poor people, then the use case immediately
| shifts to "well have you tried to move seven figures
| between countries"?
|
| By the way many African countries have a robust mobile
| phone based banking infrastructure. Nothing to do with
| cryptocurrency. See
| https://qz.com/africa/2161960/gsma-70-percent-of-the-
| worlds-... for example.
| listenallyall wrote:
| This seems like a simplification. Crypto, like any currency,
| needs to be able to be easily converted to and from other
| currencies. I can walk up to thousands of money changers and
| exchange USD for Euros, Pounds, and plenty of small
| countries' currencies. Meanwhile it may be technically
| possible to do the same with crypto, virtually nobody is, and
| the places that do offer a conversion, like BTC ATMs, charge
| enormous fees.
| croes wrote:
| So bank regulation worked in 2008, is was just a human
| failure?
|
| Communism works, it's just human failures?
|
| The measure of whether something works is whether it prevents
| human failure.
| hestefisk wrote:
| Socialism to some extent has been successful in some
| countries. Sweden is a good example.
| BlueTemplar wrote:
| No it isn't. Pretty sure that they have a lot of private
| entities owning the means of production in a free(ish)
| market, and not mostly the government ?
| vinay427 wrote:
| I agree with your statement, perhaps with a very loose
| sense of "socialism to some extent".
|
| However, socialism is not communism, which is what the GP
| comment mentioned.
| pksebben wrote:
| We had gotten rid of bank regulation, which caused 2008.
|
| https://www.federalreservehistory.org/essays/glass-
| steagall-....
| dmichulke wrote:
| You forgot:
|
| Regulation works but it was just human failure:
|
| https://en.wikipedia.org/wiki/MF_Global
| quickthrower2 wrote:
| It is "just" another hack/collapse. That has been happening
| since mtgox and earlier and it hasn't put people off using it
| l.
| electic wrote:
| This isn't crypto. This is a centralized exchange with a
| centralized website, with centralized databases, that is run
| and controlled by humans. In fact, if you use a centralized
| exchange there is no use of blockchain for the most part.
|
| There's a literal saying, "Not your keys, not your coins". Only
| if people would listen.
| bmitc wrote:
| > There's a literal saying, "Not your keys, not your coins".
|
| Doesn't that also legitimatize a hack then? If someone hacks
| or steals your keys, you can't then turn around and say "but
| wait, those aren't your keys".
| jamesknelson wrote:
| Yes, it does, but some of us actually consider this to be a
| feature.
|
| The issue with reversibility is that it's not just
| reversibility - it's _also_ the power for the authorities
| to take your assets from you.
|
| The question isn't "do you want to be able to get your
| money back after it was stolen", it's really, "do you want
| the powers that be to be able to decide whose money it is."
| We've been lucky to live in a world where "yes" is a
| reasonable answer. But there's no guarantee that it'll stay
| that way. And crypto is insurance against that possible
| change.
| RandomLensman wrote:
| In what way is crypto an insurance there? Typically,
| ruthless regimes are good at separating you from your
| assets. I don't see any of the typical methods not
| working with crypto. It's really only an insurance
| against marginally bad situations and there lots of other
| things work equally well.
| lottin wrote:
| To be clear, "crypto" is just a book that says these
| individuals own however many tokens. It doesn't guarantee
| that anyone will abide by what the books says. It doesn't
| guarantee that nobody will take your real wealth from you
| by force.
| redox99 wrote:
| Crypto obviously has its disadvantages, hacks being one.
| There could be major UX improvements to crypto that would
| aid in reducing hacks and increasing security.
|
| But either way, it's a tradeoff and that's fine. TradFi is
| reversible and centralized, crypto is not. Sometimes you
| want one thing, sometimes you want the other.
|
| I like having _part_ of my assets in a way that can 't be
| frozen, like the people that protested in Canada whose
| banks accounts were frozen.
| LilBytes wrote:
| The exchange is a component of crypto, as an industry.
| Imagine defending social media but shitting on Facebook. To
| use your words to try and make your argument:
|
| This isn't social media. This is Facebook with a centralized
| website, with centralized databases, that is run and
| controlled by humans. In fact, if you use a Facebook there is
| no use of social media for the most part.
|
| There's a literal saying, "not paying for it, you're the
| proruct". Only if people would listen.
| irusensei wrote:
| > Imagine defending social media but shitting on Facebook.
|
| I see no contradiction on shitting on facebook while
| defending say Mastodon. In fact people were doing this with
| twitter just a few days ago before $current_thing happened.
| LilBytes wrote:
| Mastodon isn't an argument that social media isn't
| terrible.
|
| The same argument can't be made for crypto exchanges and
| the industry they occupy also being terrible.
| Thorrez wrote:
| You're right that a lot of the risks are due to holding in a
| central website. But cryptocurrency in a central website is
| more risky than fiat in a central website, because if a
| central website gets hacked and the hackers steal fiat,
| generally those transactions will be reversed, whereas if the
| hackers steal cryptocurrency, generally those can't be
| reversed.
| peyton wrote:
| What do you mean by stealing fiat currency from a central
| website? How would a website custody fiat?
| polygamous_bat wrote:
| Paypal?
| Thorrez wrote:
| I do an electronic transfer from bank A to bank B. I have
| a balance in bank B. Bank B then gets hacked.
| colechristensen wrote:
| Crypto that doesn't suffer from these kinds of failures is
| boring. It looks like traditional banking with a different API.
| Exciting maybe for banking nerds, but not so much for anyone
| else. Ultimately though blockchain ledgers will probably only
| be long term useful for record keeping between small closed
| groups of independent entities like banks settling overnight
| balances between themselves. It's never going to be entirely
| algorithmic as there is always the chance of mistake or failure
| which needs human judgement to correct.
| petesergeant wrote:
| > blockchain ledgers will probably only be long term useful
| for record keeping between small closed groups of independent
| entities like banks settling overnight balances between
| themselves
|
| It's never going to be useful for that, though. It doesn't
| solve any of the problems that small, closed groups who know
| each other and have legal recourse have.
| YossarianFrPrez wrote:
| I think most people would say that they want banking to be
| boring.
| nfw2 wrote:
| And that's why most people don't own any crypto
| concinds wrote:
| I'm pro-crypto. This is just a repeat of Mt Gox from 2014. Same
| scam. Gamblers and get-rich-quick idiots get wiped, as they
| should. Those people don't want regulation; they see that as an
| obstacle to becoming billionaires. In a few years, you'll see
| them gambling their money again.
|
| The real reason there'll be regulation isn't because the
| community wants to be reassured; it's because governments are
| afraid, and want control over the entire financial system since
| they believe they can tame "systemic risks" (while using
| bullshit value-at-risk models; I guess everyone in this story's
| an idiot). And in the new bull market, when the abysmal idiots
| want to get rich quick again, you and I might bail them out.
| tigrezno wrote:
| I don't see banks losing mainstream support when they have
| caused massive crisis with derivative products and shit. We
| rescue them so new generations will be swimming in debt and
| nothing happens.
|
| It's not about crypto, it's about human nature and avarice.
| paxys wrote:
| In the short term - yes. More broadly though, large-scale
| frauds like this one will only result in increasing government
| scrutiny and regulation, which can actually be good for the
| crypto investment ecosystem.
| YossarianFrPrez wrote:
| Hmm, tbh, that's a point I hadn't fully considered. To flip
| your point around, what hypothetical scenario would be bad
| for the crypto ecosystem long term?
| paxys wrote:
| - Bugs or some fundamental/unfixable exploits in bitcoin
| algorithms
|
| - Successful or semi-successful 51% attack (maybe state
| sponsored)
|
| - Global energy crisis/crackdown on mining
|
| - Global economic crisis of the scale where people
| desperately need cash/commodities and can't waste their
| money in speculation
| YossarianFrPrez wrote:
| While I agree that those things would harm the popular
| perception of crypto, continued fraud, theft, and greed
| are also doing so too.
| listenallyall wrote:
| > nails in the coffin for mainstream support
|
| People have short memories, further, people get caught up the
| hype. If Bitcoin's price starts to bounce, and especially if it
| manages to approach a new all time high, plenty of people will
| be on board, in fact even moreso, because the tagline will be
| that Bitcoin is resilient, it always comes back, it can
| overcome any crisis.
|
| Furthermore, although it seems like a lot of people are talking
| about FTX, probably 90% of the people who know of Bitcoin are
| entirely unaware of this story. I own some crypto assets, and I
| had never heard of "SBF" and the only thing I ever knew about
| FTX was that it made an awful television commercial. Never
| thought about them ever since.
| ShredKazoo wrote:
| A less-discussed effect here is that crypto sketchiness crowds
| out legitimate applications. If someone has a problem that
| crypto is actually a good fit for -- an application that would
| legitimately deliver value for customers, insuring medical
| tourism perhaps -- a lot of people will dismiss it just because
| they assume crypto=scam.
|
| As crypto gets scammier by the year, this crowding-out effect
| means that the dream of early adopters 10+ years ago, of a
| world economy running on cryptocurrency, becomes more and more
| distant.
|
| Combine with rising interest rates, I wouldn't be shocked to
| see BTC drop below $10K and never recover. Past crypto bubbles
| have reinflated by exposing crypto to larger and larger
| segments of the investing public, but I think we may be running
| out of greater fools. For example, last I checked the number of
| Americans who own crypto is pretty similar to the number who
| have an old-fashioned brokerage account.
| alexchantavy wrote:
| > If someone has a problem that crypto is actually a good fit
| for -- an application that would legitimately deliver value
| for customers, insuring medical tourism perhaps -- a lot of
| people will dismiss it just because they assume crypto=scam.
|
| If there's a great application that solves an important
| problem using crypto then I imagine most people would focus
| on the problem and not the fact that crypto is used to solve
| it; they'd probably even gloss over how the application
| works.
| ShredKazoo wrote:
| Fair point, however I think the argument ultimately still
| holds. If customers or regulators learn that the
| application is crypto-powered under the hood, they'll be
| turned off. And it might be that the crypto part _can 't_
| be stuffed under the hood.
|
| It's a frustrating situation for someone like me who enjoys
| geeking out about designs for alternative institutions. I
| see many ways our institutions could be better-designed --
| better aligned incentives making higher ed way cheaper &
| more effective, stuff like that -- and simultaneously there
| was so much momentum around crypto, including e.g. El
| Salvador adopting bitcoin. But somehow they never met in
| the middle. It sucks that people put their faith in tech
| geeks like me, and they got let down. Somehow crypto's
| "solution in search of a problem" never collided with the
| many institutional problems that desperately need solving.
| acdha wrote:
| > It sucks that people put their faith in tech geeks like
| me, and they got let down.
|
| Well, not like you since you're genuinely trying to solve
| real-world problems.
|
| I had that feeling a lot during the dotcom era because
| you had a similar, although less pronounced, dynamic
| where some companies were focused on selling their
| technology as some kind of magic cure for every problem
| (this was also the era where you'd see startup founders
| proudly showing off millions of dollars worth of Sun
| servers running Oracle to process 100 orders a day). We'd
| get calls from our clients who'd get these shiny
| presentations but couldn't understand how something made
| sense for their business, and we'd walk through it with
| them and confirm that it didn't.
|
| Most of those "it's new and shiny! Buy now!" companies
| either folded or were acquired at more accurate
| valuations when bubble money dried up. I remember a
| couple of sales guys asking about jobs and it was like
| "you didn't care what your prospects needed when money
| was easy, who can afford you now?"
|
| My advice would always be to focus on what real thing
| you're making better. If you can't find one, either leave
| or have a fallback plan for things suddenly grinding to a
| halt. Lower-level staff are usually the ones left holding
| the bag unless your job is very clearly linked to
| revenue.
| imtringued wrote:
| RAI works exactly as promised. The problem is that it is
| not a ponzi scheme. RAI is a cryptocurrency that basically
| implemented Milton Friedman's idea of replacing the federal
| reserve with a computer.
| smt88 wrote:
| Past crypto bubbles reinflated primarily because everyone had
| too much cash and interest rates were falling for decades.
| Even smart money had nowhere to go.
|
| We may not see an environment like that for the rest of our
| lives.
| [deleted]
| bellBivDinesh wrote:
| The problem is the crypto community's skepticism of proven
| financial safeguards. Large financial systems are centralized
| for a reason and they seem intent on finding out why by hitting
| every bump in the road at full speed.
| redox99 wrote:
| Pretty much everyone in the crypto community would be fine
| and happy if exchanges were forced to prove they own the
| users funds. Crypto people generally don't want _crypto_
| regulation. But exchanges are not crypto. They are a third
| party holding your crypto.
|
| The problem is that regulators "confuse" that (or pretend to)
| and any regulation that comes out hurts the users, and the
| DeFi space, instead of focusing on centralized business like
| FTX that are outright stealing users funds.
|
| Also what FTX did is without a doubt already illegal, it's
| not like it's some kind of loophole or legal thing they did.
| someguydave wrote:
| Agree. You don't need extra special "crypto" regulation to
| know that customer's assets should not be stolen.
|
| Arguably, fractional reserve banks "steal" customer
| deposits to invest and pay interest in exchange. They have
| a very particular license from the government and are
| monitored (and insured) and rightly so - they are very
| dangerous.
| YossarianFrPrez wrote:
| Indeed. In a way it reminds me of how easy it is to be
| utopian if you ignore incentives.
| nightski wrote:
| What's amusing about your comment is that exchanges are the
| one centralized part of crypto due to the interfce with fiat
| and they also tend to be where all of the fraud occurs.
| threeseed wrote:
| > where all of the fraud occurs
|
| Might want to look into the rug-pulling with shitcoins,
| NFTs etc.
|
| That is far more insidious since it is targeted at young
| adults/children by influencers such as Jake Paul, Lil Uzi,
| David Dobrik etc.
| jl2718 wrote:
| Yes, smart contracts can be programmed to allow terrible
| human behavior. Banks also have this feature.
|
| But... they can also be programmed NOT to allow terrible
| human behavior. Banks do not have this feature.
| polygamous_bat wrote:
| > But... they can also be programmed NOT to allow
| terrible human behavior.
|
| Maybe, if you are a god tier programmer. On a long enough
| timescale the probability of your crypto project ending
| up on the rekt.news leaderboard is 1.
| threeseed wrote:
| Banks interact with the legal system at every level.
|
| So yes there maybe terrible human behaviour at times but
| very quickly it results in either (a) people being fined
| or going to jail or (b) laws improving to prevent it e.g.
| KYC/AML.
|
| Also as someone who works at a bank there is a _lot_ of
| code which governs what people can and can 't do.
| jl2718 wrote:
| Are you suggesting that KYC/AML protects consumers from
| the bank?
| someguydave wrote:
| Banks actually do have terrible behavior if you think
| fractional reserve banking is a scam. If banks were not
| backed by the government printing press they would all
| collapse.
| YossarianFrPrez wrote:
| What's also interesting is that decision-making power is
| very rarely fully centralized in large financial companies.
| Boards of directors, fiduciary duties, third-party audits,
| attorneys, and so on, all structurally serve to
| decentralize decision making. There is, of course,
| individual variability, and such structures are not always
| successful.... E.g. I've read that the board of FTX wasn't
| an independent board in any meaningful sense.
| 55555 wrote:
| To correct your comment a bit, fraud occurs much more on
| centralized human-run exchanges that do NOT handle fiat.
| Handling fiat => licenses => regulation => harder to do
| fraud and get away with it.
| gizmo385 wrote:
| > due to the interfce with fiat and they also tend to be
| where all of the fraud occurs.
|
| Yes, because that's where the actual value is at the end of
| the day. Regardless of how much people want to pump crypto,
| when push comes to shove, the recognized value of crypto
| for the vast majority of people is it's conversation rate
| to fiat currencies.
| someguydave wrote:
| I use my airline miles before dollars when buying plane
| tickets. This does not mean I value airline miles over
| dollars.
| JumpCrisscross wrote:
| > _exchanges are the one centralized part of crypto_
|
| Crypto is immensely more centralised than the American
| banking system. That's what makes it resilient. Every
| wallet's state is always globally known. Compare that with
| the series of subpoenas one must serve to learn what's in
| whose bank account.
| pksebben wrote:
| I believe 'centralization' here refers to centralized
| control. The ledger is distributed anyhow, so not very
| central.
| [deleted]
| px43 wrote:
| This is a Wall Street corruption story.
|
| https://twitter.com/wallstreetpro/status/1591167190996504576
|
| Sam, Caroline, and everyone at the top of FTX and Alameda have
| very close family ties to key power brokers on Wall Street,
| which is how they were able to run this scam. FTX has also
| lobbied extensively for harsh regulations on DeFi, which is a
| key reason that he was hated by people in the cryptocurrency
| space, and adored by Wall Street.
|
| The only reason FTX got caught is because of evidence they left
| on-chain. Any other investment fund might have been able to
| sweep it all under the rug, but since the massive payout from
| FTX to Alameda was visible for the world to see, the corruption
| was obvious, and the whole thing collapsed.
| sillysaurusx wrote:
| Very interesting take.
|
| How would another investment fund transfer customer funds to
| Alameda while being able to sweep it under the rug?
|
| I think the transfer wasn't the problem. It was illegal, yes.
| But the empire fell because Alameda lost the money.
|
| Alameda's CEO: "I use very little math. Being comfortable
| with risk is important. We tend not to have things like stop
| losses." https://www.tiktok.com/t/ZTRxWbctK/
| px43 wrote:
| From what I've gathered, Alameda lost the money during the
| Luna collapse back in the spring. Sam extended a loan from
| FTX (using customer funds) to Alameda (which he owned 90%
| of) to prevent Alameda from collapsing with everything else
| (Three Arrows Capital etc). When called out, he claimed on
| Twitter that he was just shuffling around some cold
| wallets. The balance sheet leak from last week handed
| observers a smoking gun showing that it was actually being
| loaned out to Alameda, triggering Binance to begin their
| exit, which kicked off the cascade of events.
| polygamous_bat wrote:
| > This is a Wall Street corruption story.
|
| No, stop trying to spin this. It's a stereotypical crypto
| story.
|
| > Sam, Caroline, and everyone at the top of FTX and Alameda
| have very close family ties to key power brokers on Wall
| Street, which is how they were able to run this scam.
|
| Who was Do Kwon's wall street family tie?
|
| > FTX has also lobbied extensively for harsh regulations on
| DeFi, which is a key reason that he was hated by people in
| the cryptocurrency space, and adored by Wall Street.
|
| Centralized exchange lobbies against decentralized exchange,
| isn't that just business?
|
| > The only reason FTX got caught is because of evidence they
| left on-chain.
|
| Really? Source? From what I know it was just good old balance
| sheet (probably an Excel file, even) that got leaked.
|
| > Any other investment fund might have been able to sweep it
| all under the rug, but since the massive payout from FTX to
| Alameda was visible for the world to see, the corruption was
| obvious, and the whole thing collapsed
|
| Utter bull. FTX paid Alameda a long time ago. No one knew
| this story until 2 days ago because none of this works the
| way you are talking about.
| oarsinsync wrote:
| > > This is a Wall Street corruption story.
|
| >No, stop trying to spin this. It's a stereotypical crypto
| story.
|
| It's worth considering that these things are not mutually
| exclusive. Why can't it be both?
| [deleted]
| sillysaurusx wrote:
| (We should remember to be careful in the thread to stay
| substantive; dismissing your opponents claims as "Utter
| bull" may feel good to write, but the sentence after that
| is the valuable one for readers. Only you can prevent
| forest fires^W^Wflame wars.)
| eternalban wrote:
| Wiki was quiet about Caroline Ellison's family but a random
| post on the internet just happened by and the claim is her
| father is Glenn Ellison.
|
| https://economics.mit.edu/people/faculty/glenn-ellison
|
| but p.s. the whole comment is worth a paste:
|
| SEC Chair Gary Gensler's old boss at MIT was Glenn Ellison.
| His daughter Caroline Ellison is the CEO of FTX sister-
| company Alameda Research (and Sam Bankman-Fried's lover
| apparently).
|
| The GC of FTX used to be lead counsel to Gary Gensler when he
| was CFTC Chair.
|
| Sam Bankman-Fried's mother was Hilary Clinton's lawyer.
|
| Gabe Bankman-Fried, brother to Sam (also a former Jane Street
| trader), is founder of "Guarding Against Pandemics". He was a
| Legislative Correspondent for the US House of Representatives
| and an advisor to large political donors in the Democrat
| party.
|
| The family Aunt Linda Fried is a WEF member on the Global
| Agenda Council on Aging.
|
| The father, Joseph Bankman, is a Stanford professor who has
| lobbied on behalf of Hedge Fund managers before Congress
| before (film records exist).
|
| FTX Head of Ventures & Commercial at FTX Ventures, Amy Wu,
| started with the Clinton Foundation years ago.
|
| Nishad Singh FTX Director of Engineering has spent over 8
| million for Dem candidates.
|
| Obama's Commodity Futures Trading Commissioner, Mark Wetjen,
| was the head of FTX Policy & Regulation.
|
| Chief regulatory officer of FTX is Dan Friedberg was
| previously a lawyer at Ultimate bet (a site where they
| basically cheated against players).
|
| Stuart Hoegner General Counselor at Bitfinex/Tether was
| previously Director of Compliance at Excapsa which was
| responsible for the Ultimate bet poker software.
| sgammon wrote:
| Dude, in a world of Lloyd Blankfeins, Kevin O'Leary is a
| small fish.
| kortilla wrote:
| Blankfein is worth just over 2x Kevin O'Leary. They aren't
| really categorically different.
| bo1024 wrote:
| Blockchain tech should distance itself from finance and
| cryptocurrency. The most interesting and promising thing about
| blockchains is decentralized coordination of group decision
| making.
|
| Based on your comment and the rest of HN, many people think
| blockchain = finance with cryptocurrency and NFTs. That's what
| FTX was. Boring. DeFi is only slightly more interesting.
|
| Blockchains like ethereum do run on a cryptocurrency, but the
| currency is not the most interesting part, it's just
| lubrication for interesting applications.
| BLKNSLVR wrote:
| I actually see this as an opportunity for the established
| financial companies to insert themselves into the ecosystem,
| using their established reputation, processes, and adherence to
| traditional bank regulation as a 'trust' base that's been both
| lacking permanently and (whatever was there) eroded over the
| last 12 months.
|
| Both exchanges and coins / tokens are going at what looks like
| very cheap right now.
| TEP_Kim_Il_Sung wrote:
| >Their established reputation
|
| The reason trustless decentralized crypto currencies were
| invented: So we don't have to rely on banking corporation's
| glowing reputations.
| grumple wrote:
| Verrry skeptical. They get hacked the same week that they go
| under and face regulators?
|
| For apps to be compromised, that means a dev was involved, either
| knowingly or unknowingly. And as a dev, that unknowing part would
| be very hard, way more difficult when dealing with an app that
| handles so-called financial transactions. If something got in
| unaudited, that's also on the devs.
| headsoup wrote:
| What I don't get (well I do, lobbying and inside deals), is why
| these guys have run so long (especially Tether). Just because
| crypto is a 'decentralised' wild west opposed to government
| shouldn't mean they sit outside of the laws around fraud,
| laundering and deception, especially if they're registered
| companies.
|
| The lack of legal focus, given the obvious illegitimacy of it all
| is disgraceful and I can't even imagine the size of the wealth
| transfer happening through all this.
| throwawaysleep wrote:
| Popular appeal?
|
| All sorts of scams, from dietary supplements to homeopathy
| pyramid schemes are permitted to carry on because fighting them
| is too unpopular.
|
| Edit: take a look at Twitter. Crypto folks are busy worried
| that the Us gov will overreact and regulate crypto over this.
| 1270018080 wrote:
| Scientology, herbalife, and other obvious scams have persisted.
| I think crypto people love getting defrauded, and as long as
| they enjoy it there won't be much pressure to prosecute.
| lelanthran wrote:
| I Dunn if it is fair to include Scientology in that.
|
| Other than the amounts of money involved, it clearly is a
| religion.
| Ekaros wrote:
| And in general religions are in business of extracting
| money from people and using it for their own means.
| Scientology is not any different from any other. Including
| the mainstream Christian cults...
| drewmol wrote:
| And their means both as determined by their doctrine and
| expressed by their history vary greatly. In the US
| religions have been legally defined (a subject of much
| debate historically) as they are given tax and regulatory
| exemptions and often public funding. Here's a good read
| on the topic from 1969:
|
| https://scholarship.law.nd.edu/cgi/viewcontent.cgi?articl
| e=3...
|
| I'm curious, are there specific ones your referring to,
| or do you consider all mainstream denominations of
| Christianity cults?
| e1ghtSpace wrote:
| Wait is the government a religion?
| kgwgk wrote:
| You may want to check the validity of the syllogism.
| drewmol wrote:
| The US government is made up of 4 religions: Democrat,
| Republican, MAGA and Bernie Sanders.
| lelanthran wrote:
| I don't understand the modding down. Does someone want to
| explain why Scientology is different than, say, the major
| Christian religions? Or Islam?
| drewmol wrote:
| Here's my understanding:
|
| In Christianity, god extorts adherence through the
| revelation that there's eternal life after death and the
| threat of eternal damnation as punishment for
| insubordination. The requirements to enter Heaven are
| acknowledgment and acceptance of Jesus' crucifixion as
| atonement for your transgressions (and possibly
| repentance).
|
| In Islam, god extorts adherence through the revelation
| that there's eternal life after death and the threat of
| eternal damnation as punishment for insubordination. The
| requirements to enter Paradise are not explicitly defined
| (aside possibly through dying in a Jihad) so strict
| adherence is arguable more crucial than in Christianity.
|
| In Scientology, god extorts adherence by eliciting
| confessions of past transgressions on videotaped
| counseling sessions and threatening public exposure for
| insubordination, among other tactics.
| boppo1 wrote:
| At least Islam and Christianity funded art, architecture
| and to some extent science and literacy.
|
| Disclosure: I'm agnostic asymptotically approaching
| atheist
| echelon wrote:
| > Just because crypto is a 'decentralised' wild west opposed to
| government shouldn't mean they sit outside of the laws around
| fraud, laundering and deception, especially if they're
| registered companies.
|
| Entirely speculation, but something fun I've heard repeated
| occasionally:
|
| If this was "just tech", it could find itself regulated easily.
| (Though this isn't necessarily the case.)
|
| If it's a geopolitical weapon or spy tool of any consequence,
| then there may be other stakeholders pushing back against
| weakening it.
|
| Plausible, borderline conspiratorial, but fun to think about.
| VagueMag wrote:
| 'Testbed for CBDCs' and 'black budget money laundering' seem
| like compelling explanations for the stunning regulatory
| forbearance (so far) to me. I've also seen speculation that
| FTX/SBF were intentionally allowed to create Ponzi bubbles of
| epic proportions in order to discredit decentralized digital
| currency and make it radioactive in most of the public's
| mind.
| gorbachev wrote:
| Or just the usual story of near senile legislators being
| decades behind actual developments and just not getting it,
| and therefore not moving quickly enough.
| rlt wrote:
| Alternatively, governments knew FTX was a fraud and let it
| happen to weaken peoples' faith in crypto.
| px43 wrote:
| FTX was able to fleece Wall Street investors specifically
| because of their deep Wall Street connections. This is a
| corrupt Wall Street story. The only reason they were exposed is
| because they left evidence on-chain, and people started asking
| questions. There are very few people who have been in the
| cryptocurrency space for more than 5 years that had any sort of
| trust in FTX.
|
| https://twitter.com/concodanomics/status/1591232063906217984
| bogomipz wrote:
| The article states:
|
| >According to on-chain data, various Ethereum tokens as well as
| Solana and Binance Smart Chain tokens exited FTX's official
| wallets and moved to decentralized exchanges like 1inch. Both FTX
| and FTX US appear to be affected."
|
| Can someone say what the significance of moving these tokens to a
| decentralized exchange is? I'm guessing there's a strategic
| reason for doing so. Can someone explain what that it is if so?
| Aaronstotle wrote:
| The FTX App has allegedly been hacked as well. This reeks of an
| inside job/coordinated attack.
|
| Edit: It is rumored that SBF is en-route to Argentina
|
| Second Edit: This is a Twitter rumor, with no verification, could
| be fake news. I was going to paste the Tweet, but the Tweet has
| been removed because it was seen as unlikely.
| graeme wrote:
| App not updated in app store. Could popup box be edited in app
| to be malicious of would such a feature need to already be
| coded in like Epic's non app store payments thing?
| 1270018080 wrote:
| Argentina has an extradition treaty with the US though?
| notch656a wrote:
| ... and extremely porous borders. Doubt anybody would be dumb
| enough to actually fly directly to their target country.
|
| Also worth noting, due to a quirk in the way Argentina
| citizenship laws are written once he is in the country he can
| file immediately for citizenship and he won't be deportable
| (although he will be extraditable). I'm not an attorney but
| that may help him in case his passport is revoked.
| Aaronstotle wrote:
| Yeah, I will post the link to the plane that is rumored to be
| his.
| shorthistory wrote:
| What is the source of rumor please?
| saurik wrote:
| https://twitter.com/0xfoobar/status/1591292545346473984
| [deleted]
| Magi604 wrote:
| Tether is just as if not more shady than anything coming out of
| this whole FTX saga. It wouldn't surprise me if people behind the
| scenes are working on it right now to try and bring it down and
| be first to claim that scalp.
| jl2718 wrote:
| I would like this to be a rogue white-hat. Anybody have a theory?
| graeme wrote:
| They're making Madoff look good. He semi-voluntarily* turned
| himself in when the jig was up, and the govt eventually recovered
| about 2/3rd of the money
|
| FTX seems like it's still trying to steal funds
|
| *Madoff confessed to his family, said he would turn himself in,
| and asked for 24 hours to get affairs in order. Family refused,
| called FBI immediately
| fortran77 wrote:
| Madoff recovery is 88.35%. See:
| https://www.justice.gov/opa/pr/justice-department-
| announces-....
|
| Many of Madoff's victims exaggerated their loses. If they
| invested $1MM at a claimed return of 15% for 6 years, they
| would claim they lost $2MM, not the $1MM principal.
|
| (I just hope our Government doesn't try to bail out crypto
| speculators!)
| graeme wrote:
| Thanks! Wow even better than I recalled
|
| To be fair there's something to that idea. Market returns
| about 7% on average. Over six years that would be an
| opportunity cost of 50%.
|
| But, as you say there's got to be some loss for choosing to
| put one's money with a con artist
|
| I doubt there will be a crypto bailout as it seemingly didn't
| get big enough to blow up anything outside itself. It also
| had an anti public relations campaign for years
| fortran77 wrote:
| I've been around the block a few times, and I've had people
| over the years tell me about an "investment" or a fund, or
| their brother-in-law who could get me 15% or more on my
| money. And every time I've been smart enough to say "no
| thanks."
|
| I must admit, I don't have a lot of sympathy for Madoff's
| victims. Especially the charities! If I donate money to a
| charity, I'd expect the money to go to help people or to
| further their cause -- not to be invested in a high-risk
| ponzi scheme.
| akiselev wrote:
| The irony!
|
| _> In 1992, Bernard Madoff explained his purported
| strategy to The Wall Street Journal. He said his returns
| were really nothing special, given that the Standard &
| Poors 500-stock index generated an average annual return
| of 16.3% between November 1982 and November 1992. "I
| would be surprised if anybody thought that matching the
| S&P over 10 years was anything outstanding." The majority
| of money managers actually trailed the S&P 500 during the
| 1980s._
|
| From
| https://en.m.wikipedia.org/wiki/Madoff_investment_scandal
| ec109685 wrote:
| There was a constant drumbeat of high interest promises
| by these crypto companies, even the supposedly "safe"
| ones. And so many people thought it was a no lose
| proposition. E.g. 8% APR at FTX.us: https://mobile.twitte
| r.com/ftx_app/status/141749746557453927...
| TedDoesntTalk wrote:
| Why haven't they deleted this tweet by now?
| zone411 wrote:
| What difference would it make?
| alasdair_ wrote:
| Lol at the first comment from over a year ago: " Make it
| so I can withdraw like a normal wallet and I'm in"
| wmf wrote:
| The Renaissance Medallion fund made over 30% per year, so
| people who had heard of that would be primed to believe
| that 15% was possible.
| fortran77 wrote:
| Yeah, but anyone who thinks about it realizes that a rate
| that high simply isn't sustainable.
| fbdab103 wrote:
| >I doubt there will be a crypto bailout as it seemingly
| didn't get big enough to blow up anything outside itself
|
| If politicians wanted to make crypto bros whole, I would
| lose my mind. I doubt I am the only one, and I would hope
| that would be scene as a political death sentence to
| endorse such a proposition.
| fortran77 wrote:
| Some California congresspeople wanted to bail out dot-com
| speculators during the 2000 crash, at least of their tax
| oblications:
|
| https://www.bizjournals.com/sanjose/stories/2001/07/30/da
| ily...
|
| (I was opposed to this. I purposely didn't exercise stock
| options that I couldn't or wouldn't sell immediately
| because I knew about the tax liability. I don't believe
| the defense that someone who wants to speculate in stock
| options just didn't know about the taxes. People who wish
| to speculate with complicated forms of investors should
| be prepared to take all the risk.)
| cookie_monsta wrote:
| I honestly don't understand why any speculators get bailed
| out ever. They're in it for above-market profits, how is it
| that they don't have to accept the risk?
| fortran77 wrote:
| Madoff's victims weren't bailed out with Government money,
| they recovered assets from Madoff. (It was with Government
| effort though, including "clawing back" money from other
| Madoff customers who had actual gains!)
| cookie_monsta wrote:
| Then it's not a bailout, it's asset recovery. That's fine
| with me - somebody rips you off, take them to court like
| everybody else has to.
| agotterer wrote:
| They also recovered money by clawing back returns that
| investors made in the years leading up to the scandal finale.
| latchkey wrote:
| Heck, they are making Mark Karpeles look good.
|
| https://twitter.com/MagicalTux/status/1591295272621314049
| adastra22 wrote:
| I'm getting my mtgox claim paid out, finally. Never would
| have picked that for my 2022 bingo card.
| VagueMag wrote:
| Perhaps there's some effective altruist argument for why this
| is best for the world. Trying to make the Ponzi lesson stick or
| something.
| akiselev wrote:
| He just wanted to bring back the guillotine. He's a big
| picture thinker.
| rippercushions wrote:
| It gets worse: somebody has pushed what appears to be a malicious
| update to the FTX app, and the official FTX telegram channel is
| warning people not to even browse to the website!
|
| https://twitter.com/zachxbt/status/1591293813519253504
| tootie wrote:
| If half of this drama happened to JP Morgan, it would be bank
| runs and global depression.
| graeme wrote:
| I've been trying to figure out the technicalities there.
| Neither the ios nor android apps have updates since the crash.
|
| The update box is clearly based on their pre existing popup
| used for things like 2FA.
|
| Could this popup have been modified with new text and linked to
| a new malicious site without an app update on ios or android?
|
| Or, could the popup only function if it was already coded into
| the app waiting to be activated? Meaning premeditated
| fshbbdssbbgdd wrote:
| It's pretty common for apps to load some external content
| from a server to show to the user. This is useful in part
| because it allows you to update the content without going
| through the slow app review process. Potentially, if your
| backend got hacked, the hackers could change this content.
| graeme wrote:
| Sure, but your onboarding flow popup buttons? I don't think
| app review allows those to be loaded from a website
| liamfd wrote:
| You can definitely serve content like that from your
| server and have the app render it (no website required).
| The review process would not block that.
|
| You could also serve a change like this with an OTA
| update, again no app store review required, which ios and
| android allow (as long as you don't fundamentally change
| the app, and even then they could only catch that
| retroactively.
|
| Not sure if they'd care if you load it in a webview as
| long as the UX wasn't substantially different. I seem to
| recall getting bounced to web auth flows pretty often.
| trollied wrote:
| Lots of apps these days are merely shells for web content
| that is hosted elsewhere.
| gorbypark wrote:
| A couple quick searches for "ftx app react native" makes me
| believe at least part of their app, if not the entire thing,
| is react native (it's possible to have a hybrid native/react
| native app). It's totally possible and quite common to be
| able to load the JavaScript bundle from a remote server.
| Microsoft has a service to do exactly that called Codepush.
| Expo also has a service and it's not very complex to roll
| your own. How a react native app works is all the native code
| is compiled into a "shell" of an app and then a JavaScript
| bundle is loaded (it can be shipped in the binary or loaded
| from a server) and that's where all the layout and logic
| lives. Not only is it possible to make small changes, you
| could conceivably ship an entirely new app this way as long
| as you don't need to add any new native dependencies. Of
| course the App Store/Play Store don't allow "major" changes,
| but they have no real way of knowing. In Apple's case, you
| need to provide them with a login for them to review the app
| (not sure about the play store, but possibly them too). It
| would be trivially to load one bundle for Apple and another
| for everyone else. If you had control of the backend you
| could even target specific accounts and load a compromised
| bundle with no one else the wiser. It's fairly easy to strip
| out the JS bundle to examen, so I'd say targeted attacks
| would be the smart way to do it. It would give you a lot of
| time before people caught on vs compromising everyone. I'm
| sure there's folks out there already tearing into the js
| bundle looking for shenanigans.
| zeven7 wrote:
| > Investigating abnormalities with wallet movements related to
| consolidation of ftx balances across exchanges - unclear facts as
| other movements not clear. Will share more info as soon as we
| have it.
|
| From FTX's general counsel[1], retweeted by FTX_Official. So that
| indicates it's not being sold off legitimately under some sort of
| liquidation proceedings. It could be insiders or it could be
| hackers.
|
| [1] https://twitter.com/_Ryne_Miller/status/1591281729125613570
|
| Rumors on Twitter[2] are there was also an update just pushed to
| the FTX app. Concerns are the update may contain malware. It
| makes sense to uninstall the FTX app if you have it.
|
| [2] https://twitter.com/zachxbt/status/1591295039946493952
| iblaine wrote:
| It's unfortunate that what started out with altruistic motives,
| a method for decentralized anonymous asset exchange, is being
| derailed by opportunists. There was a time where a 51% attack
| was the biggest concern.
|
| All that said, I'm not surprised at where we are today.
| CPLX wrote:
| In times like this I often find comfort in the expression
| "The Purpose of a System is What It Does"
|
| https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha.
| ..
| BlueTemplar wrote:
| Doesn't this make all forms of bureaucracy (and hence,
| civilization) parasitic ? (Or are you just supposed to
| regularly "drain the swamp" ?)
| CPLX wrote:
| No. Seems like a non sequitur to me.
| BlueTemplar wrote:
| =
|
| "The bureaucracy is expanding to meet the needs of the
| expanding bureaucracy." from (supposedly) Oscar Wilde
|
| +
|
| Survival of the fittest to survive, from Charles Darwin
|
| ?
|
| (This is a serious question, I have been pondering it for
| years now...)
| heresie-dabord wrote:
| > what started out with altruistic motives, [...] is being
| derailed by opportunists.
|
| See: all human history.
|
| The essential trust anchor will always be transparency that
| directly affects a person in society. Anonymous money and
| anonymous power _will_ be exploited.
| readthenotes1 wrote:
| Most of the rules of civilization are centered around
| preventing the 20% predators from devouring the 80% normal
| people.
| jasonwatkinspdx wrote:
| There's a line describing this in a failed US version of
| the cop drama Prime Suspect... I forget the exact wording
| but it's some grizzled cop talking about how their job is
| to protect the herd from the carnivorous sheep in it.
| kevinmchugh wrote:
| https://slate.com/culture/2015/01/american-snipers-
| wolves-sh...
| lelanthran wrote:
| Most? That's an understatement.
|
| The rules that aren't are so few they may as well be
| rounding errors lost in noise.
| lowbloodsugar wrote:
| nathias wrote:
| most are about 10% of predators trying to devour the other
| 10% of predators while preventing being devoured by the 80%
| of normal people
| Gasp0de wrote:
| And here I sit, thinking those rules were so that the 1%
| could take all the value the 99% produced.
| baq wrote:
| Nuclear weapons made this a bigger issue since it closes
| the option of last resort, which is war. See North
| Korea...
| landemva wrote:
| Not sure what you mean. After what was done to Libya
| after they gave up nukes, North Korea learned it can't
| disarm without subsequently being invaded and destroyed.
| [deleted]
| n0tth3dro1ds wrote:
| > It's unfortunate that what started out with altruistic
| motives
|
| Are you actually buying into SBF's pathetic ideologies? Or
| are you more referring to Satoshi's white paper when you
| refer to "altruistic motives".
|
| I can't understand how anyone would take SBF seriously. He's
| a smug charlatan who converted funny money to real money so
| that he could dump it into politics for his own aims, all
| while calling his actions "altruism". Biggest false virtue
| signaler of all time.
| tromp wrote:
| > Or are you more referring to Satoshi's white paper when
| you refer to "altruistic motives".
|
| There's little altruistic about an emission that allocates
| half of all supply (first four years) going to early miners
| including Satoshi himself, and leaves only crumbs for later
| generations.
| rafale wrote:
| Satoshi picked that model probably because it's easy to
| divide by 2 (x >> 2). He didn't want to prematurely
| optimize or overthink anything because it was a simple
| experiment and nobody could have predicted that Bitcoin
| will become the mammoth it is now.
| mackman wrote:
| Shifting by two is dividing by four. Not so easy, after
| all!
| mdolon wrote:
| This was my biggest "a-ha" realization around crypto,
| that the distribution model is utterly and irreparably
| broken for the most popular currencies. Whenever I bring
| this up with BTC/crypto maximalists their counterpoint is
| that fiat is also unevenly distributed and that it's not
| a novel problem. The disconnect is truly puzzling.
| lazide wrote:
| It's not so puzzling when you realize most people are
| perfectly fine about something if they get paid by it, or
| think they might one day get paid by it.
|
| Less fine if they won't and someone else will.
| tromp wrote:
| It's not a novel problem, but nearly all cryptocurrencies
| exacerbate it by concentrating the majority of emission
| on the first few years. Non-pow coins even start with the
| creators holding 100% of supply.
|
| When they could instead minimize the problem (or limit it
| to the pre-existing fiat inequality) with a pure linear
| emission, i.e. fixed block subsidy.
|
| The resulting high supply inflation rate (1/n after n
| years) would have the side benefit of deterring
| speculation, and keeping prices (and hence environmental
| impact) low.
| [deleted]
| easytiger wrote:
| Agreed. IN particular, William MacAskill[1] is worth
| particular interest. Closer to abstract low tier cult than
| serious philosophy. The fact he changed his name (his real
| name is William Crouch) to sound more like a marketable
| philosopher should be indicative enough to anyone with an
| ounce of sense that one should be guarded engaging with
| this supposed philosophy.
|
| That so many people at FTX called themselves "EAers" or
| "subscribe to the philosophy of EA" screams charlatanism to
| me. That it became entwined with the Crypto community is no
| surprise to me.
|
| It reminds me of the many many "churches" in Africa that
| tell people great fortune will come their way if they are
| loyal to this particular preacher or whatnot. [2] It is
| obvious to me those are a scam. Perhaps more akin to
| Scientology - creation of a VIP club - the less sense it
| makes the better?
|
| I've tried to read about Effective Altruism and my
| conclusions are that it is immature gibberish and these
| proponents are not fully formed emotionally intelligent
| adults. [3]
|
| > _SBF ended up hanging out a lot with his younger brother
| Gabe, who was living in an EA commune on nearby Stuart
| Street._
|
| Communes - but it isn't a cult right?
|
| [1] https://en.wikipedia.org/wiki/William_MacAskill
|
| [2] https://www.nytimes.com/2002/03/13/world/africans-fill-
| churc...
|
| [3] https://web.archive.org/web/20221027180943/https://www.
| sequo...
| paul80808 wrote:
| I hear a lot of critiques around effective altruism that
| boil down to attacks on people who practice it as being
| immature, naive, or cult like.
|
| At its core, EA asks what the most effective way to
| contribute to humanity is. Some of the thinkers are
| mature and have produced amazing projects, givewell being
| an obvious example.
|
| There are definitely some weirdos affiliated with the
| movement, but I don't think that that discredits its
| approach or philosophy.
| jasonwatkinspdx wrote:
| It's performative in exactly the same way I grew up among
| with evangelical extremists. You can't reduce moral
| decisions and ethics to some sort of karmic account
| balance. Functionally EA allows its promotors to rebrand
| self interest as actually altruism. It becomes an all
| purpose end to justify any means. A thought ending cliche
| to avoid engaging with the actual complexity.
| fallingknife wrote:
| And yet no one ever seems to be able to actually define a
| better moral decision making process or describe what the
| argument defeating "complexity" actually is. Just a
| longer way of saying "I disagree."
| RandomLensman wrote:
| What is the evidence that we actually truly know what is
| most effective in a lot of situations? If "effectiveness"
| is just a hypothesis then the whole thing becomes quite
| shaky in terms of resource allocation.
| Emma_Goldman wrote:
| I think the OP is being unfair to Will and EA, but your
| statement is pretty outrageous. No one's ever come up
| with a moral or political philosophy other than
| utilitarianism - are you serious?
| dan-robertson wrote:
| Didn't he change his name when he was first married (to
| some more distant family name) instead of only one spouse
| changing name?
| selimthegrim wrote:
| I think it is his ex-wife's name?
| easytiger wrote:
| No, it isn't.
| zeven7 wrote:
| Parent mentions decentralized anonymous asset exchange
| being the goal and 51% attacks being the biggest concern.
| That tells me he's talking about Satoshi. Those topics
| don't apply to SBF.
| DavidSJ wrote:
| > Reports on crypto Twitter are that this is a hack
|
| Is that based on some evidence, or is it speculation?
| zeven7 wrote:
| I reworded things to separate the first hand information
| (FTX_Official indicating they don't know what's going on)
| from speculation (app hacker rumors).
| largepeepee wrote:
| Some call this a "hack", others who are brighter noticed
| that the recent FTX limited account unfreeze before they
| declared bankruptcy was to mask their own personal outflows
| as they siphoned money from a sinking ship
| ackbar03 wrote:
| I saw an update on coindesk that they confirmed it was a
| hack on their official telegram channel?
|
| What a dumpster fire. But let's be honest, I think retail
| investors weren't getting anything back anyways. Probably
| only impacts creditors
| headsoup wrote:
| Lol, a 'hack.' An unfortunately extremely convenient one
| that I'll almost guarantee specifically took customer
| funds, you know, after the bros already took their first
| cut.
| themihai wrote:
| It happens on Wall St as well but more "subtle". Retail
| investors and tax payers have always been the bag
| holders.
| pclmulqdq wrote:
| Wall Street doesn't rug pull people. It sells them bad
| bets and takes the opposite side of those bets. There is
| a massive difference.
| svnt wrote:
| It's not a massive difference just a rug pull at a higher
| conceptual level (informational) because the obvious
| financial rug pull was done a hundred years ago and has
| since been regulated.
| WeylandYutani wrote:
| Do banks get hacked very often? They seem to have their
| security in order. Probably because they would have to
| reimburse their customers if something went wrong.
| ehnto wrote:
| I imagine they do their best to run a tight ship yes, but
| I also imagine the fact that banks still run a lot of
| legacy pipelines and audits means it's also a little
| harder to find bugs in the apps and websites, that would
| actually let you achieve much.
| jnwatson wrote:
| I have direct knowledge of several bank hacks. Most of
| the time they don't publish it.
| xeromal wrote:
| Isn't the difference that banks have insurance for those
| hacks?
| drewmol wrote:
| Yes banks have fidelity bonds called bankers blanket
| bonds (BBB) which cover losses from fraud, theft, etc.
| The FDIC doesn't ensure against robbery, identity
| theft(banking fraud), etc. so this is an important
| protection for banks to provide.
| xeromal wrote:
| Ah! I had no idea FDIC didn't cover robbery. Thanks for
| clarifying!
| selecsosi wrote:
| They will cover the depositor's funds up to the 250k
| limit in the event of an event where the bank cannot
| return your funds, but banks assets or property is not
| covered under FDIC and need to be separately insured.
| themihai wrote:
| When the banks get bankrupt (i.e due overleverage,
| stealing/using customer's money etc) their customers get
| nothing back. A such example is MF Global. I'm not going
| into the whole story why banks and centralised/opaque
| finance is bad.
|
| Now the whole point of crypto was the tech behind it
| which was supposed to replace banks, exchanges and
| missuse of your OWN money. It's supposed to be an
| alternative to the trash financial tools we already use.
| The fact that people are using entities such FTX, Binance
| makes them deserve to be punished for their betrayal.
| Regardless if they use FTX or JP Morgan they pretty much
| deserve to experiment the shortfalls of centralised
| finance. I think it's part of the hello world example of
| what DeFi is trying to solve.
|
| One more thing: If FTX was hacked I bet it has almost
| nothing to do with the crypto technology.
|
| https://en.m.wikipedia.org/wiki/MF_Global
| fieldcny wrote:
| MF Global wasn't a bank.
|
| "Nothing to do with the crypto technology" is an empty
| and meaningless statement.
|
| IF, and that's a very big if, they got hacked, the fact
| that $600m could be moved and disappeared so quickly is
| 100% to do with the "crypto technology". In the real
| financial system it is exponentially harder to make money
| disappear, transfers are logged on three sides of the
| transaction, you have to hack multiple autonomous and
| different tech stacks, and you have to wait as the
| transfers get transmitted, validated and passed in.
| awinder wrote:
| "In January 2013, a judge approved a settlement that
| would return 93 percent of customers' investments"
|
| A great deal larger than nothing.
| throwaway2037 wrote:
| You wrote: <<their customers get nothing back>>
|
| Another comment already noted that MF Global was not a
| (commercial/retail) bank. One part of it was a broker-
| dealer.
|
| Also, in the United States customers of MF Global
| brokerage were covered by the Securities Investor
| Protection Corporation (SIPC) which (to quote Wiki):
| <<can pay the customer (via its trustee) up to $500,000
| for missing equity, including up to $250,000 for missing
| cash>>. Please read more here: https://en.wikipedia.org/w
| iki/Securities_Investor_Protection...
|
| Even with all of the bad behaviour during MF Global's
| last days (to quote Wiki again): <<In January 2013, a
| judge approved a settlement that would return 93 percent
| of customers' investments, with the prospect of
| additional payouts from the company's general estate.>>
|
| Impressive, considering the extent of fraud at MF Global!
| Can any collapsed crypto exchange claim the same recovery
| rate? I doubt it.
| [deleted]
| dan-robertson wrote:
| Retail investors are creditors right? Though I guess you
| mean only the larger creditors. I think the bigger
| difference is that bankruptcy proceedings take a long
| time and to a retail investor 'you might get some money
| back in N years' isn't so different from 'you get
| nothing'.
| mcherm wrote:
| > bankruptcy proceedings take a long time and to a retail
| investor 'you might get some money back in N years' isn't
| so different from 'you get nothing'.
|
| Does anyone actually remember MtGox? It wasn't actually
| that long ago!
| TheOtherHobbes wrote:
| Karpeles never went to jail. He was convicted of poor
| recording keeping, not of embezzlement, and given a
| suspended sentence.
|
| If - hypothetically - someone else wanted to take a
| similar path, the odds of jail time are actually pretty
| low.
| stall84 wrote:
| I just had that realization that I'm sure so many have
| already had.. In a bankruptcy, we really are creditors..
| but we're not Creditors, and won't get our money back
| until big C's have had all they want.
| MomoXenosaga wrote:
| In my country the first creditor that gets their money in
| case of a bankruptcy is the tax man.
|
| And a lot of bankrupt companies owe the government a lot
| of money in due taxes...
| dan-robertson wrote:
| There's such a thing as seniority of claims and it may
| often be the case that the mass of ordinary people don't
| have the most senior claims but it isn't about the size -
| investors (who, in some sense, have the most junior
| claims) will likely get hosed even though they're big.
|
| I think there are two ways to think about this:
|
| 1. If you're a company and you have N classes of debt
| then probably 'ordinary people' will all be in the same
| class (this can vary, eg if you're a big retail store
| then wages owed will likely be a different more senior
| class of debt than anything you owe customers). So the
| more senior claims are more likely to be big companies as
| are the more junior claims, and it is unlikely that the
| 'ordinary people' class of debt will be the most senior.
| For FTX I expect the hedge funds and retail customers to
| have the same seniority.
|
| 2. Hedge funds, etc, will be able to retain lawyers and
| seek representation in the bankruptcy process in a way
| that is unaffordable to ordinary people. So they might
| end up with favourable timelines/restructurings or better
| accounting of what they're owed but those arrangements
| can't be that the big members of the class get a higher
| proportion of their money back than the smaller members.
| jmathai wrote:
| Greed drives all of us to do things we normally wouldn't.
| Given the nature of crypto, unless there's a good reason to
| have the FTX app (say as opposed to using their website),
| then uninstalling it seems like very sound advice.
| mudrockbestgirl wrote:
| > Reports on crypto Twitter are that this is a hack
|
| It's really unfortunate to get "hacked" with such bad timing.
| You steal customer money and file for bankruptcy but now the
| bad hackers, probably from the Bahamas as well, take whatever
| is left and cash out. Oh no! /s
|
| But it's alright, SBF said he's sorry.
| groffee wrote:
| SBF takes "full responsibility".
| seydor wrote:
| i volonteer to take some "responsibility" as well
| can16358p wrote:
| Don't worry tweet that "he's sorry" and it will be all
| right.
| Fargren wrote:
| Taking full responsibility would be liquidating his assets
| to make all customers as whole as possible, even if it
| leaves him destitute. Lack of responsibility/consequences
| for the capitalist class is the root cause for many of the
| social problems we have today.
|
| It's not OK that we hugely reward taking risks to capital
| and then largely isolate the "risk"-taker from the
| consequences of failure when they materialize.
| wly_cdgr wrote:
| 100%
| rchaud wrote:
| Perhaps he will take some time to clear his head. Is there
| a monastery in South America where he can repent?
| Preferably one with no extradition treaty?
| jinpa_zangpo wrote:
| All the countries in South America have extradition
| treaties with the United States. If he's looking for a
| monastery, he should head to a Buddhist monastery in
| Vietnam.
|
| List of countries with extradition treaties with the USA:
| https://2009-2017.state.gov/documents/organization/71600.
| pdf
| yieldcrv wrote:
| honestly, the vulnerability was probably already there and
| there was a symbiosis with the person. Rules for rulers,
| there are various keyholders in your empire. This company
| wasn't following any best practices, so no reason to think
| they have crypto security best practices internally.
|
| this person absolutely knows that they can kick leadership
| when they're down and that all blame will go to the
| leadership
|
| it doesn't require being an "apologist" for leadership to see
| this vulnerability. Council and compliance all resigned, the
| ceo resigned. Any semblance of checks are gone and any rogue
| developer can use their keys on anything, rumor now is that
| an app update went out turning them into malware.
|
| its equally as plausible as just a cringeworthy vendetta of
| spiraling founders, dumber things have happened in crypto.
| smart things have too, I'm leaving towards a smart thing
| blitzar wrote:
| In unrelated news SBF just found he had a bunch of crypto in
| his personal wallet. Totally not at all the pile of crypto
| that was last seen in the FTX wallet.
| tinus_hn wrote:
| A minor problem with the blockchain is that the blockchain
| is actually an authenticated record of all transactions, so
| it's pretty hard to hide where the crypto went unless you
| never actually exchange it or use it to buy something.
| AustinDev wrote:
| Swap to Monero then slowly trickle swap back to your coin
| of choice as you need the funds. 'Problem Solved'
|
| There is a reason US regulated exchanged with KYC don't
| deal in XMR.
| notch656a wrote:
| Huh? Kraken deals in XMR in the US. You can literally
| upload a US passport and they will sell/buy you XMR.
| They've been doing it for years.
| blitzar wrote:
| His keys his coins
| [deleted]
| [deleted]
| TedDoesntTalk wrote:
| Yes, 1-2 billion in Sam's personal wallets:
|
| "Reuters is reporting that at least $1 billion in customer
| funds at the exchange disappeared last weekend, citing two
| former senior employees briefed on the company's finances."
|
| https://www.reuters.com/markets/currencies/exclusive-
| least-1...
| dna_polymerase wrote:
| Yeah and I'm sure the Apple App Store review process won't
| catch the steal_private_keys_and_upload_to_china() method they
| inserted. Not that iPhone apps can't do this in the first
| place. A lot of FUD right now to create even more chaos.
| flylib wrote:
| FTX CTO Gary Wang as well has a lot of recent GitHub commit
| activity in last 2 days and now suddenly the site is hacked
| https://github.com/garywang
| bluelightning2k wrote:
| I'm as sceptical as the next person but I don't think "coder
| writes code" is anything.
| ryanSrich wrote:
| The CTO writing and committing code for a (formerly) $16
| billion dollar company does seem slightly off imo.
| dan-robertson wrote:
| I think it's quite normal (at least at some companies)
| for a CTO to spend some time writing code as part of
| setting technical direction. In that case there might be
| other executives who do the other parts of the CTO role
| you imagine (eg having lots of reports).
| zone411 wrote:
| How do you know it's him and not somebody else with the same
| name? I don't see any crypto projects.
| bmitc wrote:
| > I don't see any crypto projects.
|
| How do you know that? It says explicitly: "52 contributions
| in private repositories" between November 1 and November
| 11.
| zone411 wrote:
| Obviously nobody knows what the private repos are. I was
| talking about public projects. "Gary Wang" is not an
| uncommon name. For example, here is another one with a
| Wikipedia page https://en.wikipedia.org/wiki/Gary_Wang
| bmitc wrote:
| That's a good point. For whatever reason, I missed the
| first part of your comment. I did indeed operate under
| the assumption, incorrectly, that it was his profile.
|
| What's interesting is that a lot of the FTX people on the
| about page (https://about.ftx.com/), including Gary Wang
| and Dan Friedberg have deleted their LinkedIn accounts,
| whereas they were available earlier. If they're deleting
| something so harmless, then who knows what else they are
| deleting and covering up.
| Emma_Goldman wrote:
| I don't think this means anything. They might just not
| want any publicity, or to be harassed by malcontented FTX
| depositors. In the context of the FTX implosion, their
| LinkedIn profiles are far from harmless.
| [deleted]
| [deleted]
| [deleted]
| ForHackernews wrote:
| przeor wrote:
| jasonwatkinspdx wrote:
| Because we're tired of a dumpster fire of scams and fraud
| being sold as the revolutionary future of all finance and
| money.
|
| We do not want that future. We don't even want the bitcoin
| present. We think it's bad and will cheer as it implodes.
|
| There was a time I thought something like bitcoin had a
| useful role to play in the world, never as a
| consumer/retail thing, but more a zero trust alternative to
| existing clearing houses used by businesses. The mania
| around getting rich quick on crypto coins has utterly
| destroyed that possibility.
|
| You can call it hate if you like. I don't particularly
| care. I do think spreading this criticism to counter the
| hype and straight up fraud pitches is justified, including
| being rather emphatic about it.
| TheNewsIsHere wrote:
| I am saddened about the baggage that blockchain
| technologies hold in less technical circles now. They're
| not just for cryptocurrencies.
|
| My grandfather hears "blockchain" and he assumes he is
| looking at a crypto scam.
| krisoft wrote:
| > My grandfather hears "blockchain" and he assumes he is
| looking at a crypto scam.
|
| As a first approximation he sounds like a wise man.
|
| > They're not just for cryptocurrencies.
|
| Please tell me about the other use cases.
| stephc_int13 wrote:
| Your grandfather is not that dumb.
| TomSwirly wrote:
| 1. Because everyone touts "avoiding government regulations"
| - what most of us call "crime" - as one of crypto's primary
| reasons.
|
| 2. Because there are so many scams in the field.
|
| 3. Because crypto people have this unattractive combination
| of acting superior to others while literally never having
| read about or even thought deeply about economics.
|
| 4. Because after 13 years, not one Web3 project has emerged
| that has any value outside cryptocurrencies.
|
| 5. Because blockchains are wildly consumptive of the
| world's resources, right when we see the devastation of our
| biosphere roaring down on us.
| paranoidrobot wrote:
| I can't speak for others, but personally my great dislike
| for it is the very high rate of scam-like behaviour.
|
| Every where you look, it turns out that someone is doing a
| 'rug pull', using customer funds in ways that don't line up
| with what they said publicly, or using misleading and
| deceptive behaviours to con others into giving them money.
| fmajid wrote:
| You're already doing them a great favor by conceding a
| possibility the scam rate is not exactly 100.0%.
| pjc50 wrote:
| I need a name for the cognitive distortion where someone
| says "X is bad" for valid reasons and then jumps
| immediately on a _much worse_ solution. Applies not just to
| crypto but to bringing up the Iraq war; or complaints about
| "MSM" leading people to choose entirely fact-free nonsense
| channels or literal Russian state propaganda TV instead.
| iamacyborg wrote:
| People dislike crypto because for many it has become
| incredibly obvious that it's nothing more than a vehicle to
| scam and commit fraud.
|
| Yes, these things happen elsewhere but crypto is perfectly
| designed to facilitate these bad behaviours.
| WanderPanda wrote:
| Bitcoin is neutral and almost uninfluentiable by any
| single party. It's neutral, all the rules are out there,
| nobody has an information advantage. With Ethereum it's a
| bit more difficult because it has a history of being very
| transparent but there is still Vitalik as the BDFL.
| Almost everything else in ,,crypto" is a mostly
| centralized system with the same points of failure as
| traditional financial systems (IoUs => bank rund). It is
| dishonest to conflate Bitcoin with all these possible
| scams. I hope Ethereum can establish itself as a neutral,
| natural law kind of system as well (removing Vitalik from
| the equation). Because on top of Ethereum more people can
| built trust less systems that can have bugs but that
| can't really be scams because all the mechanics are
| public and nobody can have an information advantage.
| iamacyborg wrote:
| The reality is that the technology being "neutral" or not
| is irrelevant. It's how the technology is used that
| matters.
| jerpint wrote:
| It's also funny that in certain instances crypto is
| perfectly designed to easily catch these behaviours
| (since the ledgers are public)
| ww520 wrote:
| It's wild. The place is brazenly being robbed in public eyes. Is
| it under the Bahamas laws? What can anyone do?
| mcast wrote:
| Bahamas has an extradition treaty with the US. If SBF doesn't
| flee he will definitely get indicted in US court
| TedDoesntTalk wrote:
| I don't think SBF would be dumb enough to steal $400m right
| now when the whole world is watching his every move.
| 0x5345414e wrote:
| Well he was dumb enough to post a bunch of lies and
| nonsense to Twitter the last couple days...
| from wrote:
| Maybe I'm more cynical than most but those tweets to me
| feel like they will be used as evidence in the future to
| argue that he didn't really have the full picture what
| was going at FTX and that it was really the Alameda
| people or the devs etc behind everything.
| paganel wrote:
| > Alameda people or the devs etc behind everything.
|
| SBF used to have intercourse with the Alameda CEO, and if
| I'm not mistaken they were all in this together (FTX +
| Alameda, that is). Article on the intercourse thing [1].
| The admins of this forum can complain about "the level of
| discussion getting low" as much as they want, but this is
| the reality, this is how billions of dollars have been
| stolen.
|
| [1] https://www.coindesk.com/business/2022/11/10/bankman-
| frieds-...
| zeven7 wrote:
| He's going to prison anyway, his reputation is tarnished,
| maybe he figured: Why not make a run for it?
| dinobones wrote:
| This could be pretty interesting leverage.
|
| "I hold the private key to refund 80% of my victims
| losses, reduce my sentence or it dies with me."
| [deleted]
| JumpCrisscross wrote:
| > _reduce my sentence or it dies with me_
|
| He would go to jail. This isn't even a tough one.
| nullc wrote:
| Why not? Lying got him this far!
| alasdair_ wrote:
| Isn't this just people that live in the Bahamas draining their
| own accounts (which is still allowed)?
|
| Plus, obviously, people who can find a random Bahamas native to
| KYC their account for them.
| paxys wrote:
| I imagine a large chunk of FTX users in the Bahamas are FTX
| employees, and others associated with the company.
| 55555 wrote:
| At the very least they would know someone there who is a
| citizen and could withdraw their funds for them. A loophole
| was utilized where a Bahamanian FTX user would create an NFT
| on FTX's NFT marketplace, and the locked user would buy it
| with the price equal to all of their funds. Then the
| Bahamanian would withdraw to fiat and take their cut. People
| probably made dozens of millions in a day taking 50% cuts
| while laundering people's money out.
| [deleted]
| mudrockbestgirl wrote:
| According to the latest reports, SBF is potentially on the run on
| a private jet [0] from the Bahamas to (probably) Argentina. He
| hasn't been confirmed to be on that plane, but it seems likely.
| This stuff is straight out of movie.
|
| [0] https://www.flightradar24.com/LVKEB/2e2e7cfd
| SilasX wrote:
| Not disagreeing, but what's the basis for thinking that's a
| plane owned by/affiliated with SBF?
| AustinDev wrote:
| If he is in fact on the run... Does this dude really think the
| CIA and FBI won't find him? He's likely not safe anywhere but
| Russia, China, North Korea or Israel.... maybe Pakistan.
| xisthesqrtof9 wrote:
| Why Israel? I'd assume they'd hand him over given their close
| background no?
| 55555 wrote:
| Sometimes yes, but historically in general they haven't
| extradited their citizens for financial crimes against
| foreigners. I believe it changed a few years ago, at least
| on paper?
| kgwgk wrote:
| > historically in general they haven't extradited their
| citizens
|
| How is that relevant?
| andsoitis wrote:
| > they haven't extradited their citizens
|
| SBF isn't an Israeli citizen, is he?
| AustinDev wrote:
| There is a history of people committing crimes or being
| suspected of doing so in US and running away to Israel and
| avoiding extradition due to their laws.[1] I can gather
| more examples to illustrate a pattern or at least
| proclivity but it's late and I'm off to bed.
|
| [1]https://digitalcommons.wcl.american.edu/cgi/viewcontent.
| cgi?...
| kgwgk wrote:
| > There is a history of people committing crimes or being
| suspected of doing so in US and running away to Israel
| and avoiding extradition due to their laws.
|
| Did you maybe forgot to mention that those people were
| Israeli citizens?
| rchaud wrote:
| can SBF apply for citizenship once he lands there?
| booleandilemma wrote:
| He is jewish, I'm wondering if the law of return would
| apply.
|
| https://en.wikipedia.org/wiki/Law_of_Return
| kgwgk wrote:
| He could apply. It would be denied, of course.
| paxys wrote:
| Why would the CIA and FBI care? It's not like they are going
| to send Navy SEALs after him. This is a DoJ matter, and the
| most they will do is file extradition requests. If the
| country he is in decides to ignore them, well that's about
| it.
| AustinDev wrote:
| He stole from rich people. Madoff made the same mistake.
| Parallel construction is how the CIA would be involved
| helping the FBI or foreign police to nab him. I'm just
| pointing out that his threat model has now increased by
| several orders of magnitude. He'll never get away from this
| unless he does an Epstein.
| threeseed wrote:
| They wouldn't care. At this point crypto is simply a form
| of gambling.
|
| And the people being hurt are more than educated about the
| risks they take.
| ajb wrote:
| No, not safe in Russia. From https://mobile.twitter.com/kamil
| kazani/status/15791389474472...
|
| "In contrast, Russian cryptobros that I know tend to act
| very, very lowkey. The fewer people know about your
| activities, the better. Posting about dealing with crypto in
| social media is absolutely unthinkable. Why? Because that
| makes you too easy and lucrative prey"
|
| That thread describes how a basement was found, in the house
| of an official in the Russian prison system, which appears to
| have been specifically designed for the capture and torture
| of crypto owners to give up their coins. It had its own
| crematorium for disposing of the remains.
|
| If these guys think that they can take some coins and live a
| nice life in a place without strong rule of law, they have a
| nasty surprise waiting for them
| notch656a wrote:
| That post has zero evidence the fake prison is
| "specifically designed for the capture and torture of
| crypto owners."
|
| For all we know it was used to torture political enemies
| with maybe the odd crypto bro on the side.
| ajb wrote:
| The design elements are: 1) it is designed to look
| exactly like a prison, so the occupant thinks he will get
| out. Thus, it is designed for extortion. 2) a crematorium
| is provided, anticipating the requirement to be used many
| times in a similar way.
|
| This doesn't fit the profile of political enemies very
| well. 1) political enemies commit political acts, which
| can be extorted but not normally after you are dead.
| Crypto still works after you are dead 2) each political
| enemy would stand in a slightly different relation or
| context to you, which suggests a bespoke approach not a
| system. Crypto owners can all be processed in the same
| way
| duckmysick wrote:
| How do we know the crypto owners were held there?
|
| > 5. That may explain why Russian army and the military
| equipment are so archaic btw. In order to create something
| new, e.g. drones you normally need non-violent
| entrepreneurs who would actually create stuff. In Russia
| they're being wiped out by the violent ones. Hence, no
| drones
|
| Iran has drones. Does that mean Iran is an example of "an
| artificial, abnormal environment which selected out the
| violent entrepreneurs, allowing the non-violent ones to
| flourish"?
| ajb wrote:
| The evidence is circumstantial, which is why I said
| "appears to be designed for" not "we know crypto owners
| were held there".
|
| The more well attested point is that crypto owners in
| Russia don't advertise the fact, for fear of something
| like this.
| duckmysick wrote:
| What makes it appear designed specifically for crypto
| owners and not other people?
| ajb wrote:
| See my other reply in this thread
| AustinDev wrote:
| Well then, he's only got 3 to 4 other options. I'm
| particularly displeased by this situation. I got Gox'd
| thrice over. It hasn't happened in 8 years, so I'm not
| effected in this instance. However, I am just rather
| unhappy that it is still happening to folks.
| raverbashing wrote:
| But was he really in the Bahamas before? Or somewhere in the US
|
| Argentina is an... interesting choice, and I'm sure he'll adapt
| just fine to the place and the bureaucracy and also there's no
| guarantee that's a safe haven in any way.
|
| Edit: flight is showing as n.1 being tracked worldwide
| [deleted]
| bmitc wrote:
| Interestingly enough, the plane seems to be headed for Buenos
| Aires, and there is LABITCONF (https://en.labitconf.com/), a
| crypto conference, going on there right now. Who knows if it's
| actually his plane. Seems a bit weird that it would be given
| the plane is registered in Argentina.
| [deleted]
| [deleted]
| RadixDLT wrote:
| this twitter post has more info:
| https://news.ycombinator.com/item?id=33571261
| datalopers wrote:
| SBF and Caroline (and probably Trabucco) probably already on
| their way to non-extradition countries and taking what little
| cash remains with them. They'll end up in prison if they don't.
| shorthistory wrote:
| Who (which government agency etc.) would be expected to track
| their whereabouts in this scenario?
| [deleted]
| paxys wrote:
| DoJ and SEC are both already investigating FTX.
| wmf wrote:
| Do the Pinkertons operate worldwide?
|
| Or maybe Black Cube.
| VagueMag wrote:
| The Pinkertons are ruling class goons and it's not clear
| SBF and his clan aren't as well.
| sb057 wrote:
| The problem with countries that don't extradite to the U.S. is
| that assassinations tend to be woefully easy.
| notch656a wrote:
| And extraordinary rendition.
|
| TBH if you look at the data the US doesn't extradite that
| liberally. Even the Liberian torturer son of Charles Taylor
| or whatever was safe in the Caribbean despite being
| extraditable; as long as you didn't commit murder or do
| something big on the public radar or make political enemies
| or steal too much money I get the impression the US
| government doesn't try too hard. But they will definitely try
| to extradite this fella.
| shorthistory wrote:
| Guys, don't worry: Sam has said he's sorry
| dang wrote:
| Please don't post unsubstantive comments. We're trying for
| something else here.
|
| https://news.ycombinator.com/newsguidelines.html
| labrador wrote:
| So it's turned into a rug pull?
| arithmetiqa wrote:
| Honest question. How is it that the traditional banks stay
| comparatively secure from hacks and the crypto scene is an
| endlessly reporting the next big breach? Maybe the crypto
| exchanges should hire some bank security experts or at least
| adopt their best practices
| maxbond wrote:
| I'd wager that it's because banks are able to reverse
| transactions, so even though there must be hackable banks out
| there (on account there being thousands of them), it must be
| incredibly difficult to monetize.
|
| Additionally, if you hack a crypto exchange it isn't clear that
| law enforcement will be all that interested. If you steal from
| a bank, or from the people who've made deposits at that bank,
| it's a different story.
|
| Lastly there's an infrastructure of coin laundries to
| facilitate crypto heists that's accessible to everyone, but in
| "tradfi" that infrastructure either doesn't exist or isn't
| generally available.
| blamazon wrote:
| I forget who, but some human described crypto as speedrunning
| the past century or two of financial history, which seems apt.
| I think the traditional banks and regulators learned similarly
| hard lessons too, it was just mostly before I was born.
| [deleted]
| adam_arthur wrote:
| Because the crypto firms are a handful of 20 something kids
| with 0 security background
| usednet wrote:
| Deleted - Recent developments proved me wrong.
| cheeze wrote:
| Go for it.
| [deleted]
| laserbeam wrote:
| Knowing little about how ftx works... Is the article talking
| about customer accounts at FTX being drained? Or accounts
| belonging to FTX being drained?
| mudrockbestgirl wrote:
| FTX is a centralized entity, just like PayPal is. There is no
| such difference. As a centralized company, they are supposed to
| hold all customer funds in their own bank/wallet/whatever
| account(s).
| sam345 wrote:
| iait may be centralized but there's no comparison to PayPal.
| PayPal does not commingle funds
| [deleted]
| anonymoushn wrote:
| Paypal keeps separate bank accounts for each customer?
| andreareina wrote:
| The claim is that PayPal keeps user funds separately from
| the funds that PayPal e.g. uses to pay for operating
| expenses.
| [deleted]
| Havoc wrote:
| Even by crypto standards this is looking gnarly
| socialismisok wrote:
| From what I understand, SBF described the product as a Ponzi
| scheme in so many words 6 months ago, yet somehow attracted more
| money than Enron. Now he's fled to Argentina, and people are are
| missing billions.
|
| Apparently he even had a custom client built that wouldn't
| trigger auditing.
|
| It never ceases to amaze that this story happens again and again.
| danans wrote:
| > Now he's fled to Argentina
|
| What is it about inflationary and socialist Argentina that
| would attract a cryptocurrency capitalist con artist? Do they
| have no extradition treaty?
| Animats wrote:
| Yes, the US and Argentina have an extradition treaty.[1]
|
| [1] https://www.state.gov/wp-
| content/uploads/2019/02/12866-Argen...
| AndreLock wrote:
| This is absolutely wild and unprecedented. Imagine being a victim
| of Madoff's ponzi and - after already being traumatized by the
| unveiling of the fraud - discovering that the rest of the money
| had been stolen.
|
| Madoff's ponzi was larger, but the recovery rate was 88%. It
| looks like customers who didn't withdraw in time will end up with
| 0%.
| jl2718 wrote:
| So, did Madoff's victims just end up with normal returns like
| they would have gotten any other way?
| cuteboy19 wrote:
| The ended up with 0.9x their original capital
| jquery wrote:
| It's important to note they ended up with .9x after
| thinking their capital had 2x'd or 3x'd.
| [deleted]
| sillysaurusx wrote:
| Can confirm. Lost 100% of my mtgox holdings in 2013.
| Theoretically my account balance is 7.73 BTC. I can still log
| in and see it. Maybe by the time I retire I'll have recovered
| like 0.7 BTC. Which amusingly would be the sum of my original
| $11k investment.
|
| A lot of this is just gambling. People need to go into it with
| the mindset that the money _will_ be gone tomorrow, and then be
| pleasantly surprised if it doesn't.
|
| See this millionaire who is now worth $10k due to FTX:
| https://www.tiktok.com/t/ZTRxWq77B/
| rkagerer wrote:
| If you've been keeping up with your claim filings you should
| get around 1.1 to 1.25 BTC (estimate from
| https://blog.wizsec.jp/2021/02/mtgox-claim-
| calculator.html?m...)
| sillysaurusx wrote:
| Thank you for the claim calculator! I spent like an hour
| trying to understand the calculations manually, but the ~7
| pages of dense legalese was hard to decipher.
|
| (I'll believe it when the coin is in my wallet though. Till
| then, I mentally moved on a long time ago. It felt like the
| end of the world at the time, since it was my father's
| savings that he'd worked for a decade to save up for his
| kid one day. Wiping it out over night wasn't a good
| feeling, to say the least. But, life goes on, and I was
| fortunate it was only $11k. An expensive lesson, but one I
| needed to learn.)
| Seattle3503 wrote:
| > I can still log in and see it.
|
| Who operates the site?
| sillysaurusx wrote:
| The Japanese government is handling this pretty well. They
| assigned a ... I'm not sure the term. Manager? Basically
| some Japanese firm is handling everything related to Gox.
|
| The process has been slow (we're almost at the one-decade
| mark) but it does seem to be progressing.
|
| Whereas it's hard to imagine FTX creditors having any hope
| whatsoever after this.
| emadabdulrahim wrote:
| It's wild to me that he hasn't simply had a heart attack and died
| from the insanity of his actions and the consequences of it all.
|
| Imagine throwing a life like that and he's barely turned 30.
| Hubris and foolishness can lead to one's own grave.
|
| edit: I'm not wishing for his death. That's not what my comment
| was about. More on the psychological impact of deception at this
| magnitude and could any person cope with that.
| wmf wrote:
| He said the whole thing was a calculated risk. He only spent
| five years on crypto so he has plenty of time to try again. He
| probably wasn't counting on prison time though.
| [deleted]
| MisterBastahrd wrote:
| Well, that's one way to look at it. The other way to look at it
| is that he's still insanely rich even though he's lost the vast
| majority of his fortune, and he probably has it locked away in
| a place that the Feds can't get it... so as long as he gets to
| a non-extradition country, he will probably be better off than
| 99.99999% of the people currently residing on this planet. I'd
| rather not travel because authorities are out to get me than
| not travel because I'm too broke to do so.
| [deleted]
| dang wrote:
| Fancifully entertaining someone's death is definitely over the
| line in HN comments. Please don't post like that.
|
| https://news.ycombinator.com/newsguidelines.html
|
| Edit: I'm surprised at how many people are eager to go there:
|
| https://news.ycombinator.com/item?id=33570385
|
| https://news.ycombinator.com/item?id=33570266
|
| https://news.ycombinator.com/item?id=33570205
|
| That is not what HN is for, so please don't.
| emadabdulrahim wrote:
| Apologies if my comment sounded like wishing for someone's
| death. I promise that was not my intent.
|
| I'm aghast at the magnitude of his disastrous actions and
| wondering how could someone cope with the situation he put
| himself in, from a psychological point of view.
| dang wrote:
| I 100% believe you. But just imagine if you were reading
| comments like those about yourself, and imagine there were
| a ton of them. We don't want HN to be a generator for that
| kind of thing. We all tend to underestimate the impact of
| our comments.
| emadabdulrahim wrote:
| Noted. And I agree with you 100%.
| wly_cdgr wrote:
| 11/11 was an inside job
| tevon wrote:
| This is additionally a reminder that crypto currently holds a
| fairly irreconcilable catch-22.
|
| "Freezeable" tokens completely defeat the purpose of a
| decentralized currency. Why create nodes/verifiers etc if a
| wallet can be unilaterally frozen, either under pressure from
| gov't, community, or another entity.
|
| However NOT allowing freezeability allows for massive hacks,
| either by insiders, poor security, or sloppiness.
|
| Seems the solve is somewhere in the middle, a pool of trusted
| intermediaries.
| lupire wrote:
| 51% vote to freeze (by validators) is decentralized.
| cokeandpepsi wrote:
| between this and twitter I'm smiling ear to ear, you love to see
| it
| jdprgm wrote:
| This is an unreal speedrun nightmare timeline. At this rate I am
| half expecting to wake up to news tomorrow that SBF is dead.
| can16358p wrote:
| He'll probably play a Leauge of Legends match before though.
| dang wrote:
| Please keep this sort of nastiness off HN. We're trying for
| something else here, as you'll see if you review
| https://news.ycombinator.com/newsguidelines.html.
| xqcgrek2 wrote:
| dang wrote:
| How awful. Please don't do this here.
| [deleted]
| tevon wrote:
| Can someone deeper in the space explain the series of
| transactions from
|
| "letssavecrypto.eth" to the FTX Drainer address?
|
| Seen here:
| https://etherscan.io/address/0xaa16547cdc32268542145d3401120...
|
| My guess is its a way to communicate a message via txn data.
| [deleted]
| tevon wrote:
| Nevermind, looks like its an on-chain add for another crypto
| service. Haven't seen that before
|
| https://etherscan.io/tx/0x6bdd6c7d90c7f67223f7971745d5bc1f7b...
|
| Text in utf-8:
|
| Check out Fringe Finance, fully decentralised/non custodial
| platform. It's very very important to support projects like
| Fringe if we don't want events like FTX to repeat. Do check :-
| https://www.coingecko.com/en/coins/fringe-finance Problem won't
| solve just by creating Fck FTX Token. We need to support Fully
| Decentralised and Non Custodial platform Fringe at any cost.
| Lend/Borrow/Stake/LP/Stable Coin/Collaterals etc etc Team has
| been burning midnight oil, putting their blood and sweat into
| this. Check website, Read mediums. This project can end
| centralised scams for ever. Let's save crypto and pledge no one
| ever gets burnt again. Support Decentralisation, Support
| Hardwork, Support Fringe Finance.
| yalogin wrote:
| This whole saga has done irreparable damage to crypto. It will
| take a lot of time for it to come out of this hole. When there is
| money involved, and that too this much, there will be conspiracy
| theories flying around and the regular retail investor will be
| tough to win back. It will be very interesting to see what
| happens from here on out. Crypto doesn't have any uses to begin
| with, if it's purely used as pump and dump schemes why bother?
| knorker wrote:
| I'm curious about when you thought it was anything else?
|
| I don't think this will affect its reputation noticeably.
|
| Which demographic is going to be turned off by this?
|
| The regular public won't hear about this. the FIRE investor
| people basically seem to use a percentage as a lottery ticket.
| Wall Street I would hope already saw the consistent story.
|
| Is it hard core blockchain people, who knew of all the other
| crashed parties, but thought surely that's all behind us for
| the big players, having grown up now? But then nothing seems to
| faze them.
|
| Maybe the whales who don't actually care about blockchain, but
| were sold angel investor status? Yeah, possibly.
| 2sk21 wrote:
| > The regular public won't hear about this. From what I am
| reading, quite a few people had money in FTX so this may not
| be entirely true. The word will spread about people who lost
| it all in the FTX bankruptcy.
| forgotusername6 wrote:
| Regular public were shown multiple FTX TV adverts featuring
| A-list celebrities. The collapse of FTX is being featured on
| major news outlets. I'm pretty sure ordinary people will hear
| about it.
| mjburgess wrote:
| All it takes is a business case: how will this business make
| money? Where will its cash flow come from? Where's the value-
| add? How easy is it to be out-competed? Who are the existing
| market players? How do they make money? What are you offering
| customers that will attract them to your business? What is the
| horizon for profitability?
|
| You know, absolutely fundamental questions that have never been
| asked or answered of crypto. Questions that were "presumed
| answered" by made-up market capitalisations, and the flood of
| teenagers and young-adults into the schemes.
|
| "This time" is never different. The route to making a
| sustainable profit never changes.
| dan-robertson wrote:
| I don't know what you're suggesting here really but in
| general running an exchange seems like a reasonable looking
| business - you match someone who wants to buy with someone
| who wants to sell and collect a tiny fee - and FTX appeared
| to be well run and profitable. The risks would mostly be
| getting hacked, massively (unintentionally) screwing up the
| accounting or being outcompeted. I don't think one could have
| easily predicted this from first principles and if you'd told
| me a year or 5 months ago that one of the big N exchanges
| would blow up before 2023, I wouldn't have guessed FTX.
| empiko wrote:
| > This whole saga has done irreparable damage to crypto.
|
| There were so many similar sagas in crypto, that this is not
| surprising at all by now.
| ReptileMan wrote:
| Not sure about that. I didn't even knew FTX existed. Alt coins
| the drama surrounding them are too high volume low impact. But
| I always thought of crypto as gambling with extra steps. I
| think that most people in crypto know the ropes by now.
| 2pEXgD0fZ5cF wrote:
| Cryptocurrencies are speedrunning the history of the financial
| system and why it is the way it is.
| redox99 wrote:
| Cryptocurrencies are working just fine. FTX users didn't
| actually own any crypto. This is people giving away their money
| to a criminal business. The whole point of cryptocurrencies is
| that you don't need to trust a third party.
|
| "Not your keys, not your coins"
| vgatherps wrote:
| A real good takeaway here is how even a single gap in
| compliance controls can lead to unbounded failures, here I
| think largely access controls and tracking.
|
| If an exec can just go and cook the books, or like sbf did,
| "secretly transfer 4bn to alameda", it doesn't matter if you
| have strict auditors. It doesn't matter if you have compliance
| and control rules around comingling. This will literally never
| be visible to anyone in your exchange since their data source
| is fundamentally wrong.
|
| Nothing they did was proper or legal in the first place! It's
| already quite regulated in that regard. But they were able to
| do so in the first place since the required compliance
| frameworks weren't completely in place.
| JacobThreeThree wrote:
| This is just criminal behavior. There's plenty of fraudsters in
| the financial system.
| smaudet wrote:
| After 10 billion USD goes missing you can bet it won't stay
| unregulated for long.
|
| But yeah it became apparent a while back that some very bad
| actors, speculators, had become involved in crypto, so I became
| inactive.
| readthenotes1 wrote:
| 10B didn't go missing, it was stolen and they know stole it
| and where he put it.
|
| One to two billion is missing and probably stolen.
| zeven7 wrote:
| Are you sure? The numbers I saw that were a draft of the
| balance sheet showed ~$1 billion in liquid assets, and ~$9
| billion in very illiquid, mostly very low volume crypto
| assets, such that it would likely be hard to even get an
| additional $1 billion out of that "$9 billion".
|
| Source:
| https://twitter.com/minigrogu/status/1591104167455510529
| [deleted]
| 0xbadc0de5 wrote:
| Patrick Boyle breaks down the situation with his usual eloquence
| and dry humor. Video is worth watching just for the chart of the
| corporate structure. https://youtu.be/zTFhnpf-IE0
| photochemsyn wrote:
| Over 130 companies referenced in the bankruptcy filing, and
| 'around 77 companies' in that organizational chart! The first
| thought is that's an optimal structure for a money laundering
| outfit, as if those companies are constantly transferring funds
| from one to the other, dirty money can be fed in to that system
| and then get lost in the mix, coming out as fairly clean on the
| other end. See Nick Kochan, "The Washing Machine":
|
| https://www.goodreads.com/en/book/show/21230193-the-washing-...
| staindk wrote:
| Thanks for the link! Very good video indeed and I'll have to
| look into some more of his videos. Very funny and well
| presented.
| binarynate wrote:
| Larry David was right: https://youtu.be/Ut3m9OK1c7Y?t=46
| pbourke wrote:
| this is some kind of rare triple word score double-reverse
| irony. I love it.
| paulpauper wrote:
| So ironic. the latest comments on the official FTX one are
| funny https://www.youtube.com/watch?v=BH5-rSxilxo
| googlryas wrote:
| I wonder how much Larry got paid for this? Very approximately
| he has a net worth of $500M and makes $50M/yr on Seinfeld
| royalties alone. How much do you have to pay someone like that
| to do a commercial for you?
| rocket_surgeron wrote:
| Every time one of these cryptoscams matures I curse my rotten,
| stupid, brain.
|
| If I was smart, I too would be ripping off all of the cryptobros.
|
| Instead I dumb and do honest work.
| 55555 wrote:
| Be glad your mind doesn't tempt you with this crap. You'll pay
| for it one way or another, and in the end, money doesn't matter
| beyond a very low point.
| xisthesqrtof9 wrote:
| Create products, real value and make money.
|
| At least that's how I think of it, speculation creates nothing
| new. Instead it depletes resources that could have otherwise
| been used on something more meaningful.
| smaudet wrote:
| A) few people can make money off of a ponsi scheme
|
| B) The unregulated crooks are making it so crypto either will
| be outlawed or regulated (e.g. central exchanges regulated), so
| you won't be able to scam for very much longer
|
| C) it's not just crypto bros, many people made the speculative
| investment who are relatively uninterested in it, you are mote
| likely to defraud your standard investor looking to trade
| stocks with e.g. Robinhood than any major players.
|
| So don't feel bad or think you have missed out. If you want to
| defraud someone go sell NFTs, those are literally nonsense sold
| to idiots...
| mrich wrote:
| People will be going to jail for this. Do not take the short
| term view.
| quantified wrote:
| Let's keep out eyes on this. It is a super lurid scenario (to
| use a word introduced by @dang on this posting).
|
| By "this" I don't mean the earlier bits of the FTX debacle,
| but specifically this draining event. The statement that "FTX
| apps are malware" is weird in that it implies they became
| malware a while back. I could see either hackers penetrating
| due to inadequate security, or insiders setting up for an
| opportune time. Until the crypto is tumbled, it will be
| possible to trace its movements. Perhaps it'll just get
| frozen somewhere to keep it inaccessible by FTX interests.
| Let's see how long it takes to determine and locate any
| suspects for this. I have no guess aa to that, but watching
| with interest.
|
| Who says the Binance app won't turn into a threat at some
| point?
| mrich wrote:
| To be clear, even the FTX bankruptcy and the way it
| happened, not even taking this outflow/hack here into
| account, is jail worthy. The question is whether it falls
| under US jurisdiction and whether the defense lawyers can
| be paid enough to somehow avoid this, or postpone for a
| decade or so.
| paulpauper wrote:
| Crypto's performance is worse than even banking/housing stocks in
| 2008. No end in sight to the selling. People are blaming FTX,
| when it more likely crypto was going to keep falling anyway as
| the fad/bubble bursts. FTX is just more salt on the wound. BTC
| was already down 70% YOY when FTX failed. S&P 500 and Nasdaq up
| huge this week. I dunno why anyone would waste their time with
| crypto anyway when far superior investments exist.
| [deleted]
| ojr wrote:
| price of bitcoin since 2009 doing fine
| crypt1d wrote:
| This last week has been a rollercoaster. I've been in crypto
| since a long time ago and have seen quite a bit, but this FTX
| implosion takes the crown. And to be honest, I don't think its
| over.
| cycrutchfield wrote:
| If you believe there is more to come and this isn't over, are
| you still holding crypto?
| xtracto wrote:
| I've been in cryptocurrencies/blockchain since 2012. I
| "missed" the BTC boat and got into ETH early. I'm of the
| thought that CeFi services like Ftx, Nexo, Coinbase and
| similar are stupid. The only thing that should exist is
| simple Exchanges between Fiat and cryptocurrency. But
| everything else is just a scam IMHO. Why would you do a CeFi
| in crypto , when theres more TAM in doing it normal FIAT?
| Because you want to Avoid regulation and scrutiny.
|
| Anyways, through all this saga, I see ETH is still at $1200,
| which has held pretty well. I think the right price is around
| $600, how it was on Nov 2020, before all speculation. The
| rest of the price is just people playing around. But that's
| not what ETH is for, and these high prices are hurting it's
| real goal.
|
| I'm definitely still holding crypto. Mostly ETH, because I
| believe in the core technology. I've done some smart
| contracts and have a couple ideas for the future.
|
| But man, I surely hope all cryptos crash and burn this time,
| so that speculators stop polluting the technology.
| hn_throwaway_99 wrote:
| But again, despite lots of people "believing in the core
| technology", nearly everyone who holds crypto is doing so
| for speculation - they want to get rich by greater fool
| theory.
|
| Even people/groups using it for putatively useful purposes,
| those purposes often tend to be 10x more complicated or
| risky than standard financial mechanisms (or, they are
| using crypto specifically for various forms of money
| laundering).
| cmeacham98 wrote:
| I think this is my biggest problem with cryptocurrency. I
| thought it was cool technology with potential usecases
| back when I heard about it in 2013 or so; but it's become
| clear 99.99% of people involved with crypto only see it
| as a speculative asset.
|
| Almost nobody cares about optimizing for real world use,
| just optimizing for "price goes up".
| wmf wrote:
| We now have a litmus test for this: If you are truly in
| it for the technology and not to get rich then obviously
| you would only use/develop stablecoins because they have
| the benefits of crypto without that pesky volatility.
| Virtually no one fits this description.
| boppo1 wrote:
| Can you point me in the direction of how to reliably setup
| a cold wallet for ETH? Apparently much harder to find a
| guide for than BTC. A wallet generator I can run on a tails
| USB would be ideal.
| xtracto wrote:
| An ETH wallet is just a private/publik keypair. You only
| have to generate a compatible pair [1] and write it in a
| piece if paper. What makes it "cold" is that you dont
| place your keys sonwhere online (myetherwallet,
| exodus,etc) so it cant be hacked.
|
| [1] https://www.arthurkoziel.com/generating-ethereum-
| addresses-i...
| unboxingelf wrote:
| I can see a future where payments happens over lightning,
| BTC is savings, and apps/games/entertainment are built on
| ETH.
|
| However I've grown less confident in ETHs longevity
| following the move to PoS. I'm concerned about the
| centralization of control and influence (eg transactions
| being dropped, tornado cash), lack of ability to withdrawal
| staked ETH, and general lack of trust created by the
| extreme number of scams. How do you view ETH long term,
| particularly wrt the proximity it has to these seemingly
| endless scams?
| oldgradstudent wrote:
| > I think the right price is around $600,
|
| Why $600 and not $351, $17, or $15,000?
|
| What fundamental reason is there for any specific price?
| lupire wrote:
| Because it's not too high, and not too low.
| BeFlatXIII wrote:
| It's shorting time!
| xwdv wrote:
| Personally I liquidated all remaining crypto. I think these
| are the end of days for crypto and before the end of this
| year anyone still holding crypto assets will find them
| significantly less valued. There is no path to increasing
| value.
| pinkfairy10 wrote:
| Losing faith just because a CEX goes down means you were
| never interested in it beyond speculation to begin with it.
| pdntspa wrote:
| Did you just call GP a paper hands?
|
| Because any profitable trader will tell you just how
| stupid that logic is.
| xwdv wrote:
| That is 100% accurate.
| davewritescode wrote:
| All of crypto is speculation. Nobody pays for anything
| with crypto and most of the time the price movement of
| Bitcoin seems pretty close to the movement of NASDAQ.
|
| ETH provides value but it's moved to an unproven model.
|
| The who crypto ecosystem is filled with charlatans and
| crooks who want to rob you and your only other
| alternative is to be your own bank and store in a cold
| wallet. Not something normal people are interested in.
| eddsh1994 wrote:
| I've routinely bought my morning bacon and avocado
| sandwich with coffee using various crypto at a local cafe
| in Oxford, when I lived there.
| HaZeust wrote:
| Yeah because you're a user on HackerNews.
|
| That process is not at all streamlined for the layperson,
| and the structure of crypto has only existed to make it
| harder, and to further divorce from what could otherwise
| be a straightforward process for 99% of folks.
| MrMan wrote:
| crypto is famous only because of speculation, speculators
| drive all the value
| oldgradstudent wrote:
| It's not _a_ CEX. It 's quite a lot of CEXs, one after
| the other.
| crypt1d wrote:
| I'm all in fiat right now, and will stay like that until
| things calm down a bit.
| booleandilemma wrote:
| A rollercoaster or a skydive without a parachute?
| misiti3780 wrote:
| Another interesting thought I keep going back to is .... since
| crypto is really zero sum, who the hell was on the other side
| of these horrible trades that has billions now?
| SkyMarshal wrote:
| I suppose in this case it's probably a negative sum game. The
| assets in question are the FTT token that Alameda mined and
| gave to FTX as collateral, in return for real customer assets
| from FTX that Alameda used to gamb... er trade with. But FTT
| then went to zero, tanked the whole market, and the customer
| assets Alameda holds lost value too. Everybody loses.
| bombcar wrote:
| Supposedly from what I'm hearing from /r/buttcoin rumors,
| Alameda was _very bad_ at trading, so the billions have gone
| to the people doing the opposite trades from Alameda, which
| were being funded by FTX to try to gamble back the amounts
| lost.
| crypt1d wrote:
| At this point it wouldn't surprise me if they siphoned off
| the money by being on the other side of those trades via
| different entities...
| rvba wrote:
| What is the difference between this, terraluna earlier this
| year or MTGox?
| lvl102 wrote:
| SBF was hailed as a crypto savior just a few weeks ago after
| the Luna fallout. He was viewed as Warren Buffett during the
| financial crisis. Perhaps Coinbase will be the ultimate
| winner here if crypto somehow survives. I imagine more than
| 75-80% of the assets tied to crypto will liquidate in coming
| weeks. I don't think this will be "just another" crypto blow
| up. It's end game time.
| swalsh wrote:
| I trust Coinbase as a public company, but not more than I'd
| be willing to lose on a trip to Vegas.
| crypt1d wrote:
| Luna was quite bad, but it was pretty straight-forward path
| to death that everyone saw from a mile away. Not many people
| predicted that FTX and SBF will fall from grace within a
| timespan of 48hrs. The whole thing is also so full of
| scandals, theft and corruption we will be reading about this
| in the news for weeks to come.
|
| mtGox was so early in crypto, there wasn't any institutional
| capital or major players, mostly retail/regular folks
| experimenting with shiny new tech. FTX is an intermingled web
| of retail, institutions and big name investors as well as
| having their own investments, huge donations to politicians,
| lobbying arm, etc. The fallout from this will set us back for
| years.
| unboxingelf wrote:
| I suspect this will be the catalyst for "regulation
| clarity".
| willmadden wrote:
| It sure is interesting how they extended their tentacles
| into as many other companies and projects as possible
| (SBF even approached Elon about financing the Twitter
| acquisition) while knowing they were financing these
| deals with customer deposits, before blowing it up in the
| most spectacular way possible...
|
| I can't imagine a series of actions that would be more
| destructive to the industry. The actions don't make sense
| unless they were taken to maximize the potential fallout.
|
| The deep regulatory and political connections are also
| interesting...
| xeromal wrote:
| I think MTGox was actually worse just due to the small size
| of the market then and how much of a joke their security was.
| FTX just seems like a fleecing job that tons of crypto
| exchanges and businesses have pulled off. MTGox was sheer
| incompetence.
| zeven7 wrote:
| I would consider the moral failure of SBF to be worse than
| the incompetence of Karpeles.
|
| Also, SBF was a billionaire hobnobbing with politicians and
| celebrated by Forbes. Karpeles was some confused dev on his
| computer who loved his cat and wanted to build a coffee
| shop.
|
| SBF's failure is going to have larger consequences outside
| the crypto sphere.
| lupire wrote:
| Jeffrey Epstein funneled hundreds of million of dollars
| (and 16-yr-old girls) through politicians and business
| celebrities, and there were trivial consequences outside
| his family.
|
| SBF just stumbled into money and spread it around, like
| the Oculus guy.
| mi_lk wrote:
| Is there anything happen to Karpeles for what he did with
| mtgox?
| richardknop wrote:
| He was in a custody for about a year, he was later
| sentenced to a suspended year in prison. He still lives
| in Tokyo, no idea what he does for work now though.
| abakker wrote:
| So, let's assume that this hack is not meant to preserve money,
| but to destroy evidence. If you spread a lot of s** around and
| overwrite all this stuff with malware, does it create plausible
| deniability?
| joshmn wrote:
| New speedrun world-best?
|
| I realize this doesn't add much by way of substance but this has
| been an incredible watch.
|
| I hope someone is keeping an eye on SBF.
| jmount wrote:
| It has got to be an insider's improvised "plan B."
| [deleted]
| [deleted]
| ddorian43 wrote:
| This reminds me of `OSHA laws being written in blood`. The same
| has been true for everything in life and the stock market. And
| human nature didn't change with Crypto, so it WILL be the same.
| drummer wrote:
| Not your keys, not your crypto. Never leave funds on exchanges.
| When will people learn?
| moneywoes wrote:
| Likely insiders withdrawing funds
| [deleted]
| dools wrote:
| dang wants everyone to be thoughtful and curious with our
| comments.
|
| It's absurd that anyone is still giving crypto anything but
| derision.
|
| It's like someone posted a flat earth website and dang is like
| "hey let's hear them out".
|
| Forget about it.
| someguydave wrote:
| "crypto" includes all possible electronic money? Your sentiment
| is vapid and tiresome.
| isoprophlex wrote:
| I emphasize with what you're saying but... then just don't
| comment, and optionally flag the submission?
| mrjin wrote:
| Why has this to be hack? Wouldn't it be much easier an inside
| job?
| tomashertus wrote:
| If something, this really smells like inside job. They are just
| draining everything out of the connected wallets. This is
| fucking shame.
| [deleted]
| Gatsky wrote:
| If this is real, most likely an inside job. I mean FTX staff
| probably had a lot of their own crypto on the exchange, so now
| that it appears Bankman stole it from them, why not steal it
| back.
| [deleted]
| manholio wrote:
| This sounds like a great insider action to cover the fraud and
| mismanagement: leak the keys to the kingdom in a dark web
| forum, so that in the resulting commotion you can blame the
| hackers who had access all along and obviously made your
| platform fail. Something, anything that your lawyers can grasp
| at.
| Gatsky wrote:
| I doubt that Bankman would have sanctioned that though, since
| he's already admitted to malfeasance. An insider could leak
| the keys and arrange for a cut of the proceeds, was my line
| of thinking.
| manholio wrote:
| Bankman would have not sanctioned it because he's got much
| more to lose the greater the hole is. Someone around
| Bankman though, that has no substantial stake in FTX and
| suddenly realizes he was an accessory to financial fraud,
| has strong incentives to burn the house down.
|
| From a secure and audited system where only a handful of
| people had access and the actions of each are recorded (if
| we dismiss Bankman's "backdoor" for a moment), all of a
| sudden we have a system that was wide open to the world and
| raided exactly after the financial collapse. As it's easy
| to see, your Honor, the hackers were in the system all
| along, forging the so called audit trail allegedly
| incriminating my client; when the game was up, they
| pounced.
| paulpauper wrote:
| I am skeptical because if insiders have access to the keys,
| they would not do it in such a obvious manner. They would
| instead drain crypto accounts that are pooled or reserved, not
| associated with the app directly. They would have drained these
| pooled assets discretely instead of a malicious app update ,
| which draws too much attention. Of course, it's possible that
| said insiders had access to the app update but not the keys.
| [deleted]
| xwdv wrote:
| A private plane departed from the Bahamas yesterday with an
| unknown destination. Ultimately it landed in Argentina.
| derwiki wrote:
| Do you have a link with more information?
| xwdv wrote:
| Yes, we've tracked him here: https://flightaware.com/live/fli
| ght/LVKEB/history/20220525/1...
|
| They're gonna get this fucker.
| dehrmann wrote:
| > Others speculated that the outflows could be coordinated by a
| member of Bankman-Fried's inner circle
|
| They announced the hack and told users not to log in so insiders
| could get their funds out first, right?
| moneycantbuy wrote:
| to what extent can my pc/phone be compromised simply by going to
| a website? how would i know if malicious software is
| downloaded/active?
| shorthistory wrote:
| My thoughts also... can this be bigger than FTX?
|
| Can iOS/Android apps be updated without 3rd party approval?
| gfd wrote:
| iirc someone on hn said the going rate for zero-days is just
| $1-2 million. there were at least 3 RCE on chrome just this
| year: https://www.theregister.com/2022/04/15/google-third-fix-
| chro...
|
| the math works out for someone to spend it here given the
| amount of panicky crypto whales trying to get their money out
| of ftx. (OTOH, the math also suggest that these exchanges
| should've been hacked long long ago if these cheap zero days
| exist, so idk)
| throwawaysleep wrote:
| Could be as simple as the defenders walked off the job at
| FTX.
| paulpauper wrote:
| There have been so many hacks over the past 3 years. What happens
| to this money and the people behind it? Does it get mixed or stay
| dormant in the wallets forever? Few arrests, AFIK despite so much
| $ stolen. Except Bifinex 2016 hacker and Silk Road 2012 hacker.
| [deleted]
| 127 wrote:
| Orders of magnitude more compared to 2008. Only one person went
| to prison after that farce. At least with crypto there's some
| form of public ledger.
| draw_down wrote:
| grammers wrote:
| Crypto is a ponzy scheme and always has been. The FTX disaster is
| just another sign of this.
| Gasp0de wrote:
| FTX is just an exchange right? Any sensible person only puts
| funds into an exchange that they want to trade. Not your keys,
| not your crypto.
| sgt101 wrote:
| I think that they said they would pay 8% interest on your
| funds. Which I guess makes it quite attractive. A discord
| server I was on in the spring had people offering advice on how
| to get this... I just assumed it was a scam, perhaps other
| people weren't so cautious.
| Gasp0de wrote:
| I mean it should be obvious that anyone who offers 8%
| interest has to do some high-risk stuff with your funds,
| right?
| cesarb wrote:
| > I mean it should be obvious that anyone who offers 8%
| interest has to do some high-risk stuff with your funds,
| right?
|
| That wouldn't be obvious at all to me; the lowest-risk
| investment in my country (federal government bonds) is
| currently offering over 13% interest
| (https://www.tesourodireto.com.br/titulos/precos-e-
| taxas.htm).
| quickthrowman wrote:
| The classic 'risk free' asset is US Treasurys, the US has
| never defaulted on its debt. Any yield above the risk
| free rate has implied risk, Brazilian bonds yield 13%
| because Brazil has defaulted on its debt several times.
| Brazilian bonds are at least an order of magnitude
| riskier than US Treasurys, and probably more than that.
|
| FTX was paying well above the risk free rate (currently
| 3.25-3.5%, it's been climbing since January 2022),
| implying they were taking risk to earn the yield they
| were paying.
| nwatson wrote:
| That's for bond purchase and payback in Brazilian Reais
| with a bona fide government (with Lula back).
|
| To guarantee an 8% payback in crypto is a completely
| different game, and there's a significant downside for
| someone taking the deal. The expected return rate is
| always going to be negative on a proposition like that.
| lupire wrote:
| Lula might be a good guy, but that doesn't mean he has
| immediately restabilized the country.
| plasticchris wrote:
| Not always, I bonds were offering more earlier this year
| quickthrowman wrote:
| I bonds are subsidized by the US Treasury (this is why
| there's a purchase limit), which has _never_ defaulted on
| its debt.
| BlueTemplar wrote:
| Technically speaking, yes, though the USA is not
| invulnerable : for instance the dollar has lost a third
| of its value in the decade after the Nixon shock...
| theturtletalks wrote:
| I Bonds are an exception since everyone is capped at $10K
| and the rate changes quarterly based on inflation.
| BlockFi and other DeFi platforms were offering 8%, but
| had a minimum balance needed ($100K in most cases).
| colinmhayes wrote:
| The government is losing money on I bonds
| kkielhofner wrote:
| "Not your keys, not your crypto" is one of the most out of
| touch axioms in the crypto space (and that's really saying
| something).
|
| See: the vast majority of the population (even within crypto)
| that can't figure out how to setup a wallet in the first place.
| Then, if you get that far, you can join the hordes of people
| that lose access to it, dig through garbage dumps for a laptop,
| have malware that inspects the clipboard and replaces
| addresses, make a wrong click in Metamask and get cleaned out,
| etc, etc, etc.
| bombcar wrote:
| If you lose your passphrase or get your coins stolen - should
| have done security better or used an exchange.
|
| If an exchange goes bust, not your keys, not your coins.
|
| There is _always_ an answer as to why it it is _your_ fault,
| which is why it will never really catch on.
| dylkil wrote:
| smart contract wallets allow users to recover funds in the
| event they lose their private key -
| https://www.argent.xyz/learn/what-is-a-smart-contract-
| wallet...
| kkielhofner wrote:
| I'm aware of that[0].
|
| 1) With chains that support them...
|
| 2) They're ridiculously complicated and convoluted. The
| fact they're suggested by the crypto community only further
| demonstrates my point about the crypto ecosystem being
| completely disconnected from reality.
|
| 3) They don't do anything to address the other issues I
| raised.
|
| [0] - https://vitalik.ca/general/2021/01/11/recovery.html
| ryanSrich wrote:
| "Any sensible person".
|
| I think this is an unfair characterization of people that keep
| large sums on exchanges. It's not unreasonable to trust a
| company worth billions to hold your funds. Some might even
| argue an exchange is safer than a hardware wallet in the sense
| that if you physically lose the wallet, or completely forget
| the password, you're SOL.
|
| No one expects a multi-billion dollar exchange to vaporize over
| night. All that has changed this week. However, I don't think
| it will have much impact on people storing their crypto off
| exchange. What I do expect is that reputable exchanges will
| start being more open about customer funds, and audits of those
| funds.
| gitfan86 wrote:
| "No one expects a multi-billion dollar exchange to vaporize
| over night."
|
| Actually that is exactly what us 'crypto sceptics' have been
| saying the whole time. All of crypto is an accidental or
| intentional Ponzi scheme sitting on top of a vague promise of
| "democratizing finance"
| crazygringo wrote:
| > _No one expects a multi-billion dollar exchange to vaporize
| over night._
|
| Except for everyone who has?
|
| We don't expect _banks_ to vaporize because they 're FDIC-
| insured with extreme regulations on their lending/investing,
| highly regulated.
|
| But crypto exchanges are the wild west. Totally vulnerable to
| both hacking and ponzi scheme fraud. Essentially zero
| regulation or customer insurance. And "vaporizing over night"
| is how it always goes -- to quote the famous phrase, you go
| bankrupt slowly and then all at once.
|
| So it's actually _incredibly_ unreasonable to trust a company
| with essentially zero oversight to hold your funds.
|
| And sure, there can be a movement towards more openness about
| funds/audits. But now customers have to decide... which
| auditors can be trusted to review the numbers, when it's the
| exchange selecting and paying the auditors? How can you even
| know? And do the auditors provide any defense against
| hacking?
| ryanSrich wrote:
| I should have said most people, not no one.
|
| The reality is most people outside of the HN bubble trust
| billion dollar companies. Crypto or otherwise. And when I
| say trust, I don't mean in the sense that they think the
| company is doing any moral good, but that they expect a
| product or service in return for payment.
|
| You don't question that the gas you purchase at a gas
| station is in fact gas, and not water. Why would a sensible
| person expect a billion dollar exchange to suddenly halt
| withdrawals?
|
| The point of my comment was that most sensible people would
| expect a billion dollar company to hold up some aspect of
| the bargain.
| PebblesRox wrote:
| > You don't question that the gas you purchase at a gas
| station is in fact gas, and not water.
|
| Ooh, I have an analogy! If I park my car at the airport
| while I go on vacation, I expect it to still be there
| when I get back. I don't expect to return from my trip
| and discover that the airport let the car rental company
| use it while I was away and now it's gone because someone
| crashed it.
|
| On the other hand, someone in this thread pointed out the
| yield that was offered to customers with FTX accounts.
| [0] I would be more suspicious of a parking lot that
| said, "Hey, you can park here for free. In fact, do you
| have any other cars? If you park them all in our parking
| lot, we'll pay you $x per day!"
|
| [0] https://news.ycombinator.com/item?id=33571873
| lupire wrote:
| You are describing Turo.com
|
| The difference to FTX is that FTX hides the crime in a
| foreign country in a way that a car thief cannot.
| crazygringo wrote:
| But it's not a big deal if you show up to the gas station
| and they're out of gas. We trust these huge companies,
| but if your local McDonald's is closed today you're not
| losing your savings.
|
| Entrusting a company with your savings is an entirely
| different matter. The only reason people trust banks is
| because of government regulation and insurance. And
| sensible people are well aware of FDIC insurance, and of
| how losing all your money was not an uncommon thing back
| in the days when there were runs on banks. Sensible
| people are also aware of Enron and Lehman Bros and Bernie
| Madoff. These aren't obscure references -- they're
| household names.
|
| So no, I disagree completely -- sensible people
| absolutely do not hold large quantities of money on
| unregulated, uninsured crypto exchanges. Entrusting your
| savings to an unregulated, uninsured company only 3 years
| old is a level of risk eons beyond trusting a gas station
| to fill up your car.
| lupire wrote:
| "Sensible people" gave billions of dollars to Bernie
| Madoff with no justification.
| kweingar wrote:
| > The reality is most people outside of the HN bubble
| trust billion dollar companies. Crypto or otherwise.
|
| I'm not sure about this. Most people I know outside of
| tech and finance do not trust crypto at all. They
| inherently mistrust the concept.
|
| "How is it worth anything at all?" is a common question.
| "It's just little things on a computer. It's not real
| money." These people would not trust a company that takes
| your real dollars and gives you bitcoin.
|
| I would be willing to guess that a large portion of the
| country shares this attitude, especially older people and
| less technical people.
| lupire wrote:
| Crypto marks mostly "video gamers" and "get rich quick"
| poor folks. Techies are on the scammer side, building the
| tools and skimming transactions.
| JamesianP wrote:
| There isn't zero regulation. An online businesses is
| subject to the laws of its customers' countries. And the
| laws may not be up to date enough for some new scams, but
| they aren't _completely_ naive. For example ponzi schemes
| are illegal. If they were doing that the govt will go after
| them (sooner or later...). A quick google search will net
| you plenty of stories about prosecutions.
| lupire wrote:
| I am not subject to laws of a foreign country that isn't
| willing to hunt me down.
| JamesianP wrote:
| yeah the guy in my home country who broke into my car can
| say the same thing. Different problem.
| Crosseye_Jack wrote:
| People can be sensible and misinformed at the same time.
| Personally I don't feel that the flashy tv ads put out by
| exchanges are targeted at the crypto savvy. For Example
| https://www.youtube.com/watch?v=noekVG8XLQI &
| https://www.youtube.com/watch?v=eVdTjxkM1TY
| unboxingelf wrote:
| People are used to banks and treat CEX as such.
| tmaly wrote:
| Optics. The timing of the hack is suspicious
| [deleted]
| dang wrote:
| All: I know it's a bit hard but if you're going to comment on
| this, please review your comment to make sure it isn't shallow,
| lurid, or gloating. Most posts so far in this thread have been
| below that line. On HN we want thoughtful, substantive, and above
| all curious comments--where by curious is meant _intellectually_
| curious, not gawking.
|
| https://news.ycombinator.com/newsguidelines.html
| Markoff wrote:
| this is mt gox all over again, one would think people will learn
| something over the years
| RadixDLT wrote:
| man, everyone including major investment banks - everyone was
| talking about him (bankman-fried) like he's walking on water and
| has a zillion dollars.
| genmud wrote:
| Fraud. This is why banking regulation is important, almost all
| banking laws on the books exists because someone got screwed.
| [deleted]
| [deleted]
| readthenotes1 wrote:
| Because someone screwed over too many other people
| fastball wrote:
| More like because the _wrong_ people got screwed over.
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