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Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

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Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#41

Post by cryptodogemoon »

Muanh wrote: post #39
runeks wrote: post #28

Earlier quoted context omitted.

> […] offers 0 fees […] I’m highly skeptical of this claim since there’s a cost to running any system. It seems more likely that they just made fees implicit rather than explicit (as in Bitcoin) but, regardless, someone needs to be paid to keep servers running.

In bitcoin you don't get paid to run full nodes. Only the miners get paid for verifying transactions. Verifying transactions is done by the users themselves with iota, so there is no need for miners and no need for fees.

Their claim of 0 fees will not last. It means DDOSing will be trivial, and their network will be crippled.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#42

Post by pja »

keypusher wrote: post #37
pja wrote: post #27

Earlier quoted context omitted.

There are two key quotes that you need to pay attention to in that document: This engagement does not contemplate tests of accounting records or the performance of other procedures performed in an audit or attest engagement. In addition, our services do not include a determination of compliance with laws and regulations in any jurisdiction. All inquiries made throughout the consulting process have been directed towar…

> Such reports assume that everything they’re told by management is true No, they checked the balances with the banks. They verified the amount as stated was held by the bank at the time. You can see that in the section that begins "FLLP confirmed each bank account directly with the respective bank"

Apologies: I had missed that line. Edited appropriately.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#43

Post by Aledgerly »

comex wrote: post #33
dutchbrit wrote: post #29

Earlier quoted context omitted.

The coordinator will be open-sourced and in all seriousness, even bitcoin had a sort of coordinator in the beginning, people aren't even forced to use it/can bypass it, but it's recommended to use it for now. So your statement isn't 100% valid. Regarding crypto, you can read their response & reasoning here: https://blog.iota.org/curl-disclosure-beyond-the-headline-18... "The replacement Kerl hash function is unmodifi…

Just to clarify, since I misread your quote and think others might as well: > "The replacement Kerl hash function is unmodified KECCAK-384 that only converts its input and output from/to 243 trits to 48 bytes using basic two’s complement. KECCAK-384 is well vetted and researched." "Replacement" really does mean replacement, i.e. what they substituted in after the researchers successfully attacked their original hash…

This is a common misunderstanding. IOTA never deployed a vulnerable hashfunction. They had precautionary measures in place and thus had Curl there to test it out, which worked out brilliantly. Keep in mind that IOTA asked the team to attack Curl, not the other way around. This was planned.

Curl is meant to be a lightweight crypto for IOT, a field of very active research. None of this is controversial to anyone that isn't looking for things to latch negativity onto.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#44

Post by Aledgerly »

wslh wrote: post #38
redka wrote: post #8

Earlier quoted context omitted.

IOTA actually seems pretty revolutionary. I don't think it's a finished product yet but if you want some info then it's a DAG ("tangle")[1] instead of a blockchain and offers 0 fees and possibly huge scalability. There are some products already using it: RuuviTag[2], Bosh XDK Iot[3], PoC ElaadNL charging station[4], Modum[5]. Once they prove they can go without the "Coordinator"[6] I'm going to be completely sold on…

IOTA, and others, were not analyzed from adversarial known/expert researchers yet. Period. For more serious DAG oriented research you can check SPECTRE and the papers in this list [1]. [1] https://docs.google.com/document/d/1J8hehbnZWzcIUMQcxMiGbjz8...

Bullshit. IOTA has been analyzed by numerous, not to mention the 1+ billion dollar bounty on its head which has lead to serious inspection. SPECTRE on the other hand is a pseudo-DAG which only exist on paper, with known vulnerabilities.

I prefer proven science over hypothesis any day.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#45

Post by Muanh »

cryptodogemoon wrote: post #41
Muanh wrote: post #39

Earlier quoted context omitted.

In bitcoin you don't get paid to run full nodes. Only the miners get paid for verifying transactions. Verifying transactions is done by the users themselves with iota, so there is no need for miners and no need for fees.

Their claim of 0 fees will not last. It means DDOSing will be trivial, and their network will be crippled.

You have to do PoW when submitting a transaction. So DDOSing will not be trivial.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#46

Post by pavlov »

I really wish that HN had a rule where it would be mandatory for commenters to disclose their holdings in any cryptocurrency threads. This would make it easier to flag comments that look like they're just pumping a coin to improve its search engine status.

If you're praising Bitcoin, EOS, IOTA or whatever FooBarToken, please add a short note at the end to explain what you stand to gain. Either: "I'm long IOTA", or "I don't own IOTA and have no plans to initiate a position on the short term".

Similar rules apply at forums where penny stocks and other volatile traditional securities are discussed, so it's absolutely not an unreasonable thing to ask.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#47

Post by iso-8859-1 »

pavlov wrote: post #46

I really wish that HN had a rule where it would be mandatory for commenters to disclose their holdings in any cryptocurrency threads. This would make it easier to flag comments that look like they're just pumping a coin to improve its search engine status. If you're praising Bitcoin, EOS, IOTA or whatever FooBarToken, please add a short note at the end to explain what you stand to gain. Either: "I'm long IOTA", or "I…

Useless since it is so easy to lie.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#48

Post by wslh »

Aledgerly wrote: post #44
wslh wrote: post #38

Earlier quoted context omitted.

IOTA, and others, were not analyzed from adversarial known/expert researchers yet. Period. For more serious DAG oriented research you can check SPECTRE and the papers in this list [1]. [1] https://docs.google.com/document/d/1J8hehbnZWzcIUMQcxMiGbjz8...

Bullshit. IOTA has been analyzed by numerous, not to mention the 1+ billion dollar bounty on its head which has lead to serious inspection. SPECTRE on the other hand is a pseudo-DAG which only exist on paper, with known vulnerabilities. I prefer proven science over hypothesis any day.

Show me the references...

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#49

Post by rudiger »

xiphias wrote: post #40
thisisit wrote: post #14

Reading this article made me wonder - how much of the bitcoin rally is due to counterparty risks? If I remember correctly the last ramp up happened during Mt. Gox era. They were having USD withdrawal issues which resulted in BTC prices being very high on the exchange. But it din't deter them from publishing prices and making markets. Now is the case of Bitfinex suffered from a hack like Mt. Gox and are trying to stay…

There were no hardware wallets in the days of MtGox, which meant that it was extremely hard to secure Bitcoins. It got easier since then, and many people learned from MtGox (though many people haven't). Also companies take bigger care of securing their cold wallets. I would never recommend BitFinex to anyone though (GDAX and BitStamp have VC money / long history)

> There were no hardware wallets in the days of MtGox, which meant that it was extremely hard to secure Bitcoins.

It was never difficult to hold bitcoins. All you had to do was send them to an address you control with a long passphrase.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#50

Post by mannykannot »

thisisit wrote: post #6
raverbashing wrote: post #5

Earlier quoted context omitted.

> Debt to Equity swap is a real thing and not a Ponzi scheme Is it when your equity's value does not match the face value If you disagree I'll sell you 1% of equity in my lemonade stand for $1000

Hence, the caveat: > Though whether the equity shares are worth as much as Bitfinex is claiming them to be is an another question. I am not sure but they might be restricting the IOUs or shares to trade on their platform. So they are raking in commissions on the shares being traded. In which case it is surely a scam. But to be pedantic it is not a Ponzi scheme.

As the author has made a strong argument that the equity shares are in fact worthless, the caveat is not much of one.

To be precise, it is not the debt-to-equity swap that the author is comparing to a Ponzi scheme, but the part where it is suggested they get their money back by selling on to a second round of 'investors' - but pedantic arguments over what to call it can only distract from the central issue of fraud.

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