Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Fake Tesla, Apple stocks have started trading on blockchains

bloomberg.com

Post reply on HN
Print view View original

141–150 of 361 posts

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

#141

Post by cmckn »

ZephyrBlu wrote: post #108
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.

I assumed they held all the securities themselves facilitated 24/7 trading like that. Not holding the securities seems extremely dodgy.

They mint and burn tokens as necessary to make the price resemble the actual stock. When minting new tokens, you have to provide collateral in the form of stablecoins. Yes, it is as bonkers as it sounds.

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

#142

Post by minitoar »

H8crilA wrote: post #132
quickthrowman wrote: post #100

Earlier quoted context omitted.

> We don't call corn futures fake corn /ZC is physically settled[0], so that’s not a great example. /ES (S&P 500) or other index futures that are cash-settled is a better analogy. They’re also, yknow, regulated[1]. [0] https://www.cmegroup.com/markets/agriculture/oilseeds/corn.c... [1] https://www.cftc.gov/

Yeah, I would like to emphasize the fact that they're settled once individual contracts expire, be it cash or delivery. I am yet to find a useful derivative that lacks a settling mechanism. How would you even price such a contract that lacks settling? Like why should it be worth anything at all?

Because there's some mechanism for arbitrage that allows you to effectively settle it. If the spot price is too low you can make a profit.

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

#143

Post by lamontcg »

rawtxapp wrote: post #119
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.

It is a gambling market, not a derivative.

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

#144

Post by rawtxapp »

rwallace wrote: post #135
rawtxapp wrote: post #115

Earlier quoted context omitted.

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

Yep. It's burdening 99% of legitimate users with a very minor inconvenience, to stop the 1% of bad actors who would otherwise end up doing a lot of really bad things that would harm the 99% in ways that go far outside the scope we think of as covered by the financial system. So yes, I understand where you're coming from, but my libertarian instincts to reflexively think of KYC/AML as excessive and annoying regulation…

I'm not sure I would categorize it as "minor inconvenience". In terms of financial numbers, it's estimated to cost 180B$ [1]. You also have to consider all the opportunity costs of what we could achieve with a faster and smoother financial system. And you have to consider financial inclusion and all that, there are lots of really interesting financial instruments that I can't access because there's some retail that doesn't understand exactly how it works and because we lower regulations to lowest common denominator, let's just ban it. We are also cutoff from these exchanges like Binance which have much more liquidity, more interesting products, etc.

And I'm not sure that it's all that effective, especially after seeing HSBC launder money for cartels and get away with it [2]. Oh and none of these regulations obviously stopped 2008 or any of the previous crises.

To me a lot of these regulations seem like the TSA security theatre, seems useful, but at this point, pretty outdated and inefficient.

1: https://www.cpomagazine.com/cyber-security/global-cost-of-fi...

2: https://www.investopedia.com/stock-analysis/2013/investing-n...

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

#145

Post by rawtxapp »

lamontcg wrote: post #143
rawtxapp wrote: post #119

Earlier quoted context omitted.

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.

It is a gambling market, not a derivative.

That's mostly what they are used for anyways amongst other purposes like hedging or leverage.

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

#146

Post by croddin »

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…

Similarly, many crypto exchanges don’t give you access to a wallet and don’t let you actually transact on the blockchain, but they sell an asset that matches the value of a coin and those coins are held in reserve by the exchanges.

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

#147

Post by dcolkitt »

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

It’s not reasonable. The government should not be snooping into people’s financial accounts anymore than they should be snooping into people’s private homes or email inbox.

It astounds me how even principled civil libertarians wholesale accept an Orwellian level of surveillance on anything related to money. The Founding Fathers would have all revolted at anything even resembling modern KYC/AML law.

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

#148

Post by ByteJockey »

arcticbull wrote: post #82
from wrote: post #78

Earlier quoted context omitted.

The sanctions affect everyone in Iran. The elites and people actually involved in the nuclear program in Iran have access to dollars/western markets via smuggling networks and other underground efforts (see https://en.wikipedia.org/wiki/Reza_Zarrab , https://www.justice.gov/opa/pr/two-us-citizens-one-pakistani... , NIOC and ship-to-ship transfers, etc). The result is that unconnected people suffer and the elites cont…

Is it possible to exert pressure on the regime without also exerting pressure on the people? It's obviously sad collateral but IMO avoiding the Iranians getting a nuke is worth the cost. Undercutting the effort seems the worst of all worlds with most Iranians continuing to pay a high price for longer.

> Is it possible to exert pressure on the regime without also exerting pressure on the people?

Not really. Every government ultimately draws their legitimacy from the consent of the governed. If enough people riot and/or strike, you're done. Even Rome had a grain ration to keep the people content.

Your options for pressure usually come down to making the people of that country uncomfortable, or military action. Neither of which are very comfortable for those on the bottom.

You can also bribe the government to clean up their act, but that has a mixed record. I also wouldn't really call it putting pressure on the regime.

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

#150

Post by dcolkitt »

SkyMarshal wrote: post #41
delusional wrote: post #29

Earlier quoted context omitted.

I don't think there's any political interest in looking at them right now. It's largely just a bunch of nerds playing with pretend money. It hasn't really hurt anybody outside of it yet.

That's true, though govts are definitely looking at them. On one hand, the crypto-economy is still too small to represent the same kind of systemic risk that took down the banking system in 2007/8, so there's less urgency to do anything about it. Additionally, both governments and regulators, in the US at least, tend to prefer to let new technologies incubate and evolve for a time before regulating it more strictly.…

It doesn’t matter. Anything running on the blockchain has no single point of failure.

Let’s say the government outlaws Uniswap tomorrow and throws the entire team in Supermax prison for life. The protocol will just keep running forever. There’s nothing that can be done unless the government can shut down every Ethereum node in the world. Even “outlawing” Ethereum in the US wouldn’t work, unless they put in a Chinese style Internet firewall.

Post reply on HN