Fake Tesla, Apple stocks have started trading on blockchains • Hacker News Board

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

#171

Post by sneak » Wed, Jul 07, 2021, 4:03 AM UTC

danielmarkbruce wrote: post #169

lilyball wrote: post #165

> 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. I find it really weird how crypto folks keep pretending that financial regulation is an obviously bad thing, as opposed to restrictions put in place in response to real problems

Isn't it also weird that crypto enthusiasts assume that you obviously can't trust a central clearing house (or similar mechanism) when they have been working well for hundreds of years? In numerous cases humans trust institutions for certain things, and those institutions are usually strongly incentivized to act honorably, and do so. And when they don't, the court system works pretty well. At least in the countries w…

https://www.theguardian.com/media/2010/oct/14/wikileaks-says...

Governments can arbitrarily censor legal payments at will, without legal cause.

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

#172

Post by kristjansson » Wed, Jul 07, 2021, 4:05 AM UTC

gruez wrote: post #114

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.

T+0 settlement of an asset that’s only tangentially related to the one you’re interested in is ... better I guess?

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

#173

Post by sneak » Wed, Jul 07, 2021, 4:06 AM UTC

tylersmith wrote: post #157

trainsplanes wrote: post #140

Earlier quoted context omitted.

According to the Wikipedia link, bucket shops are illegal gambling. So if what this is doing isn't any different than a bucket shop... I think we'll see the same outcome.

Yes I think that's very likely. The closer DeFi gets to traditional markets the more likely enforcement is coming.

What are some possible enforcement mechanisms against Ethereum DeFi smart contracts?

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

#174

Post by 55555 » Wed, Jul 07, 2021, 4:16 AM UTC

trainsplanes wrote: post #140

tylersmith wrote: post #136

Earlier quoted context omitted.

It's not really. They're transparent, auditable, and typically they're designed to use over-collateralization to prevent liquidity problems, but they're not 100% immune to them and still count as bucket shops IMO. But they're absolutely not fraud or "fake stocks".

According to the Wikipedia link, bucket shops are illegal gambling. So if what this is doing isn't any different than a bucket shop... I think we'll see the same outcome.

Are they illegal everywhere though?

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

#175

Post by root_axis » Wed, Jul 07, 2021, 4:19 AM UTC

mmiliauskas wrote: post #167

lilyball wrote: post #165

> 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. I find it really weird how crypto folks keep pretending that financial regulation is an obviously bad thing, as opposed to restrictions put in place in response to real problems

Not that it is bad, just useless, money always find the way around them.

The same thing could be said about laws prohibiting theft and murder.

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

#176

Post by User23 » Wed, Jul 07, 2021, 4:19 AM UTC

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.

That’s what GOOG is (as opposed to the “real” Alphabet stock GOOGL). So by your definition one of the FAANGs is issuing “fake” stock. And for some reason it trades higher than the “real” shares.

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

#177

Post by perl4ever » Wed, Jul 07, 2021, 4:21 AM UTC

sjtindell wrote: post #139

perl4ever wrote: post #98

Earlier quoted context omitted.

>measuring stock prices in increments of dubloons to decimals? "dubloons"? Stock prices used to be in binary fractions. Barely over 20 years ago. Obviously moving to decimals is going backwards, how many people program with BCD these days?

Pricing stocks used to be done in fractions with 16 as the denominator because Spanish traders some 400 years ago quoted prices in fractions of Spanish Gold Doubloons. Obviously decimals are superior, they allow much more accurate price discovery. What are you referring to?

Mostly they were quoted in 8ths.

Might have something to do with the Spanish dollar being called "Real de a ocho" or "pieces of eight".

Also, I think it was silver based, not gold. Doesn't "silver dollar" in old books ring a bell?

I'm guessing you got your information from here:

https://www.investopedia.com/ask/answers/why-nyse-switch-fra...

It's poorly written and misleading, if not technically false.

"even before the decimal conversion, some ECNs permitted their customers to enter orders in penny and subpenny increments or their equivalents (e.g., in increments as small as 1/256 of a dollar)"

...from https://www.sec.gov/rules/concept/34-44568.htm

It appears that 8ths were the official minimum until mid 1997, which must be why I don't remember smaller fractions being very common. I feel like maybe it was mostly penny stocks that traded in smaller fractions?

The following mentions stocks trading in 32nds:

https://money.cnn.com/2000/03/24/investing/q_decimals/

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

#178

Post by rwallace » Wed, Jul 07, 2021, 4:22 AM UTC

fennecfoxen wrote: post #155

rawtxapp wrote: post #144

Earlier quoted context omitted.

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 d…

Agreed that this isn't just a "minor inconvenience" and as a resident alien in another country for a while (the UK), I found KYC regulations to be really quite obnoxious — and I was a pretty good position to handle them, at that. The question of whether it's worth it is a real one, and more honestly answered (whether positive or negative) if we admit these substantial costs.

Okay, fair enough, maybe 'very minor inconvenience' is understating it. And granted that the safeguards are not perfect, and some financial crime does get through. I still think the current state of affairs is a big improvement on what we would have if we just threw out the regulations.

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

#179

Post by sjtindell » Wed, Jul 07, 2021, 4:24 AM UTC

perl4ever wrote: post #177

sjtindell wrote: post #139

Earlier quoted context omitted.

Pricing stocks used to be done in fractions with 16 as the denominator because Spanish traders some 400 years ago quoted prices in fractions of Spanish Gold Doubloons. Obviously decimals are superior, they allow much more accurate price discovery. What are you referring to?

Mostly they were quoted in 8ths. Might have something to do with the Spanish dollar being called "Real de a ocho" or "pieces of eight". Also, I think it was silver based, not gold. Doesn't "silver dollar" in old books ring a bell? I'm guessing you got your information from here: https://www.investopedia.com/ask/answers/why-nyse-switch-fra... It's poorly written and misleading, if not technically false. "even before t…

I also read about it in the book Dark Pools which chronicled the story of a guy named Josh Levine who first implemented the decimal change in his pursuit of free, automated trading for average investors. He’s an absolute legend, someone I think the HN crowd would love.

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

#180

Post by lamontcg » Wed, Jul 07, 2021, 4:25 AM UTC

rawtxapp wrote: post #145

lamontcg wrote: post #143

Earlier quoted context omitted.

It is a gambling market, not a derivative.

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

There's historical reasons why bucket shop gambling is illegal, and why derivatives are regulated.

Crypto is still speed running the past 150-years or so of financial misadventures.

And pointing at how the NYSE is becoming more of a casino doesn't validate crypto doing it as well.

Crypto is starting to look more and more like the det wire that could set off the next financial implosion.