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Fake Tesla, Apple stocks have started trading on blockchains

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Re: Fake Tesla, Apple stocks have started trading on blockchains

#111

Post by tablespoon »

aewct wrote: post #70
tablespoon wrote: post #66

Earlier quoted context omitted.

>> Users can trade the tokens anonymously 24 hours a day, seven days a week, from anywhere, unhindered by capital controls, “know your client” rules imposed on broker-dealers, and other frictions of the traditional financial system. > These are certainly new innovations and features, be they good or bad. That's saying a car with its seat belts removed has an "innovative new feature." The usual word for that situation…

There's no benefit to the user to having no seatbelts. There's a huge benefit to having open markets at all times. The usual phrase for your argument is "false analogy."

> There's no benefit to the user to having no seatbelts. There's a huge benefit to having open markets at all times.

I quoted the full sentence, but I was mainly referring to:

>> unhindered by capital controls, “know your client” rules imposed on broker-dealers, and other frictions of the traditional financial system

While you can always find some little exceptions, most financial regulation has actually has good reason to exist and solves actual problems (though maybe not your problems, as in burglary laws do not solve burglars' problems). It's not much of a "feature" to do away with them, since then you just invite the re-emergence of problems that have already been solved or mitigated.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#112

Post by tomc1985 »

X6S1x6Okd1st wrote: post #109
rank0 wrote: post #99

Earlier quoted context omitted.

Except you aren’t actually buying ownership of AAPL. You don’t get any voting power or dividends. You are buying a token that the creator pinky promises are worth/redeemable for x shares of AAPL. Those AAPL tokens are not insured by the SIPC…

Nope these are not redeemable for AAPL. They are synthetic assets that track the price. The fact that there are no dividends or voting rights means they should be worth less for anyone that can purchase the actual asset.

So then what is driving price action? How will they reconcile when the crypto doesn't track the actual security?

Re: Fake Tesla, Apple stocks have started trading on blockchains

#113

Post by gomox »

ZephyrBlu wrote: post #104
metalex wrote: post #101

I'm an investor in one of these (as a disclaimer and because I'm excited about the tech) -- https://structure.fi/ . Personally, I think this is going to be huge over time. Trading on-chain tokenized stocks 24/7 is a powerful layer above the traditional financial markets.

Are you not concerned about this turning into a similar situation as Tether? I.e. the assets end up not being backed by money.

The way these work is totally transparent (open source smart contracts govern the issued tokens). There's no risk of hidden insolvency (there are significant technical risks, though).

Re: Fake Tesla, Apple stocks have started trading on blockchains

#114

Post by gruez »

yawaworht1978 wrote: post #17

Looks like cryptocurrencies are not very innovative. They keep reinstalling all the features that have been there and improved in the regular markets. Tether and stablecoins mimicking the USD, now this stuff mimicking stocks, how are the not getting in trouble with government institutions or Apple? What are the loopholes? No existing laws yet? Or they operate and reside in far away jurisdictions?

>Looks like cryptocurrencies are not very innovative

T+0 settlement seems pretty innovative to me, especially in light of the GME fiasco.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#115

Post by rawtxapp »

verdverm wrote: post #94
baby wrote: post #69

Earlier quoted context omitted.

How is it not friction?

It's a law that requires financial institutions to "Know Their Customer" in order to operate legally. It's a reasonable law. Following existing regulations will be needed for crypto to have a chance at being mainstream

Or arguably, it's burdening 99% of legitimate users to stop the 1% of bad actors.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#116

Post by AnthonyMouse »

verdverm wrote: post #94
baby wrote: post #69

Earlier quoted context omitted.

How is it not friction?

It's a law that requires financial institutions to "Know Their Customer" in order to operate legally. It's a reasonable law. Following existing regulations will be needed for crypto to have a chance at being mainstream

How is it a reasonable law? It's an invasion of privacy that ties every book you buy on Amazon to your government ID.

People argue that voter ID is an unreasonable burden on vulnerable populations. If that's the case then how is it a reasonable burden for interacting with the financial system?

If cryptocurrency does anything useful at all it will be to make privacy invasions like that sufficiently toothless that the case can be made to eliminate them in the ordinary financial system as well. Arguably it already has and all that's left is to eliminate the pointless KYC requirements.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#117

Post by as_i_fall »

anm89 wrote: post #90

Fake seems like a strange choice of words here. These things arent attempting to deceive anyone into believing they are the real thing. They clearly label themselves as derivatives. We don't call corn futures fake corn, we don't call derivatives of other types fake those things and we shouldn't call these fake stocks. I'm really not defending or not defending whatever these platforms are. I wouldn't be surprised if t…

Are these assets backed by legally binding contracts? If the answer is no it doesn't seem like a stretch.

If I sold you a stock in my company that gave you none of the traditional shareholder rights I'd also call those shares "fake", which seems to be what's going on here.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#118

Post by retrac »

bpodgursky wrote: post #92
tablespoon wrote: post #66

Earlier quoted context omitted.

>> Users can trade the tokens anonymously 24 hours a day, seven days a week, from anywhere, unhindered by capital controls, “know your client” rules imposed on broker-dealers, and other frictions of the traditional financial system. > These are certainly new innovations and features, be they good or bad. That's saying a car with its seat belts removed has an "innovative new feature." The usual word for that situation…

"capital controls" only don't seem like a big deal because you presumably live under a government which you trust, which allows allows cross-border money flows, and which has a relatively stable currency. For much or most of the world, that isn't true.

Hacker News is generally lucky to be a community of extremely well-organized and put-together people, often with a bit of social clout and wealth. I've noticed on many threads an obliviousness to the fact you've pointed out.

Even In the USA or EU, a significant proportion of people do not have access to something like buying some Apple stock legitimately. Just think of all the people who use those extortionate "cash apps" and payday loan services. Why not just use a bank? The same reason they're not going to be buying Apple stock the proper way.

Most obviously, perhaps no bank account, or no ID. They may not have legal status in the country they live in. They may owe child support. Or tens of thousands of unpaid fines for criminal convictions. Or they have a garnishment against them. Or banks simply won't open an account for them because of bad credit. So on and so on, reasons legitimate, and not, for not engaging with the formal financial system.

This adds up to something like 5 - 20% of Americans depending how you set your threshold. To those people, both cryptocurrencies and possibly-scam crypto-investments are attractive because they offer something otherwise not available.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#119

Post by rawtxapp »

delusional wrote: post #26

How does this make sense? If they don't hold the underlying security, where does the value come from? This feel like it's another one of those "while money is flowing in it'll work, but if there's a run, it crashes spectacularly". If the liquidity dries up, i end up owning nothing. With a real security at least i end up owning a small part of apple, but here i literally own nothing.

It's a derivative, it also exists in traditional markets and it's size is gigantic compared to normal markets.

As far as I understand it, in this case, it's essentially cash settled.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#120

Post by tylersmith »

as_i_fall wrote: post #117
anm89 wrote: post #90

Fake seems like a strange choice of words here. These things arent attempting to deceive anyone into believing they are the real thing. They clearly label themselves as derivatives. We don't call corn futures fake corn, we don't call derivatives of other types fake those things and we shouldn't call these fake stocks. I'm really not defending or not defending whatever these platforms are. I wouldn't be surprised if t…

Are these assets backed by legally binding contracts? If the answer is no it doesn't seem like a stretch. If I sold you a stock in my company that gave you none of the traditional shareholder rights I'd also call those shares "fake", which seems to be what's going on here.

Nobody is claiming to be selling stock in companies. They're claiming to be, and are, selling synthetic assets that track that price movements of stock.
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