Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme • Hacker News Board

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

#101

Post by thisisit » Tue, Nov 07, 2017, 10:06 AM UTC

gwern wrote: post #94

runeks wrote: post #82

Earlier quoted context omitted.

> Counterparty risk should push the price down, not up. Not if the counterparty risk causes you to be unable to withdraw national currency, thus forcing you to buy bitcoins for national currency and then withdraw the bitcoins. The only way for the price to go down, in a scenario like this, is if it's possible to sell bitcoins on the exchange (thus pushing down the price) and withdraw the proceeds. In a BTCUSD market,…

It would only push the price up on the untrustworthy exchanges, and it would lower the price everywhere else because it indicates the asset is not useful, it could be stolen & dumped on the market, it discourages anyone from getting in, it forces them to use alternative usually less convenient exchanges, etc. And even the counterparty risk doesn't produce that much increase: right up to the end when it was too late,…

That is assuming bitcoin and other cryptocurrency markets are mature and perfect. They are not.

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

#102

Post by ojr » Tue, Nov 07, 2017, 2:39 PM UTC

hedgedoops2 wrote: post #99

ojr wrote: post #24

Earlier quoted context omitted.

They stole 15% of every users Bitcoin Cash, it was suppose to be a 1:1 split, but since they don't like bitcoin cash and lists it as bcash, that might be reason why, I expect more "technical difficulties" during the next fork https://news.bitcoin.com/bitfinex-bitcoin-cash-deposits-with...

They didn't 'steal' this, they transferred it to lenders (and/or short sellers). Bitfinex (unwisely) specified that during the Bcash-Bitcoin fork, lenders would get Bcash for lent-out Bitcoin. However if Alice lends 1 Bitcoin to Bob before the fork and Bob sells it to Carol then Bitfinex will owe both Alice and Carol one Bcash after the fork, but they will only have one to distribute. So they split it up. This can ge…

Robbery! You can't use Alice funds who is not a short seller to lend out to Bob, that is a Ponzi scheme

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

#103

Post by gwern » Tue, Nov 07, 2017, 10:50 PM UTC

thisisit wrote: post #101

gwern wrote: post #94

Earlier quoted context omitted.

It would only push the price up on the untrustworthy exchanges, and it would lower the price everywhere else because it indicates the asset is not useful, it could be stolen & dumped on the market, it discourages anyone from getting in, it forces them to use alternative usually less convenient exchanges, etc. And even the counterparty risk doesn't produce that much increase: right up to the end when it was too late,…

That is assuming bitcoin and other cryptocurrency markets are mature and perfect. They are not.

Well then, why do you think they're mature and perfect enough to worry about counterparty risk? What's sauce for the goose is sauce for the gander.

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

#104

Post by thisisit » Fri, Nov 10, 2017, 3:29 AM UTC

gwern wrote: post #103

thisisit wrote: post #101

Earlier quoted context omitted.

That is assuming bitcoin and other cryptocurrency markets are mature and perfect. They are not.

Well then, why do you think they're mature and perfect enough to worry about counterparty risk? What's sauce for the goose is sauce for the gander.

Um? Let me use an example to explain what is happening here:

Me - Cryptocurrency markets are not mature that is why we have lot of arbitrage opportunity between exchanges.

You - Why do you think they're mature and perfect enough to worry about arbitrage opportunities?

So, let me repeat again - It is exactly because they are not mature there are issues. If they are mature, there is nothing to worry. And that is the sauce you are looking for.

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

#105

Post by gwern » Fri, Nov 10, 2017, 6:24 PM UTC

thisisit wrote: post #104

gwern wrote: post #103

Earlier quoted context omitted.

Well then, why do you think they're mature and perfect enough to worry about counterparty risk? What's sauce for the goose is sauce for the gander.

Um? Let me use an example to explain what is happening here: Me - Cryptocurrency markets are not mature that is why we have lot of arbitrage opportunity between exchanges. You - Why do you think they're mature and perfect enough to worry about arbitrage opportunities ? So, let me repeat again - It is exactly because they are not mature there are issues. If they are mature, there is nothing to worry. And that is the s…

You're claiming they are efficiently pricing in a particular risk, pushing up prices to reflect the counterparty risk, but then denying they are efficient enough to price in the other consequences they should be. This is not consistent or at least is very stretched.