$3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse • Hacker News Board

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#431

Post by jtbayly » Tue, May 17, 2022, 1:33 AM UTC

vmception wrote: post #406

jtbayly wrote: post #374

Earlier quoted context omitted.

Please explain why I should believe that the money was used for this purpose in a field where every other example I can find is a scam. It seems incredibly unreasonable to assume that these particular people are goodies, when everybody they are with are baddies.

1) Not everything bad is the same bad thing 2) Try stepping outside of your filter bubble. There are some websites that let you browse the internet within a different filter bubble to see how different it is

I see you haven't given a single reason to think this actually happened. I suppose there must not be one.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#432

Post by adastra22 » Tue, May 17, 2022, 1:35 AM UTC

runarb wrote: post #369

adastra22 wrote: post #191

Earlier quoted context omitted.

This information is out of date. The creditors took over the distribution process and are going to distribute the remaining bitcoin pro rata to creditors. Mark Karpales served about 2 years in prison.

> Mark Karpales served about 2 years in prison. I do not think ha actually did serve any time. "he was sentenced to 30 months in prison, suspended for four years, meaning he will serve no time unless he commits additional offenses over the next four years." according to https://en.wikipedia.org/wiki/Mark_Karpel%C3%A8s .

Thanks for the correction. He was in jail for 10 months during the investigation, until he was finally released on bail. I think I conflated that with the sentence that he was ultimately handed (with some credit for time served).

So he did serve some time. I'm not sure though if there is a big distinction between jail and prison in Japan like there is in the US though.

https://www.newsbtc.com/news/mark-karpeles-from-mt-gox-out-o...

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#433

Post by rntksi » Tue, May 17, 2022, 1:37 AM UTC

neltnerb wrote: post #430

whatshisface wrote: post #399

Earlier quoted context omitted.

Fiat currency does not actually have the backing of a government. What could the UK do when the pound peg broke? Nothing but lose enormous amounts of money trying to hold it.

What scenario involves the UK losing an enormous amount of money would be one where they are attempting to "hold a peg"? I'm confused. Countries manipulate their currency supply in various ways in order to make their money cheaper or more expensive, I get that. But I thought the main goal was to keep exports or imports to a good balance to avoid wrecking a real economy. Like, actual people's lifestyles and jobs and w…

GP is probably referring to this: https://en.m.wikipedia.org/wiki/Black_Wednesday

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#434

Post by lamontcg » Tue, May 17, 2022, 1:39 AM UTC

acchow wrote: post #291

lamontcg wrote: post #108

Earlier quoted context omitted.

> “In a sense, the market is going to take that as kind of bullish.” I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets. There's probably going to be a positive bounce just because markets don't move in straight lines. There is always the chance that something else explodes due to stress tomorrow and hits the headlines and crypto and/or stocks start m…

How does anyone determine what oversold is? S&P has only retraced to March 2021. Nasdaq to Oct 2020. A bunch of COVID plays like Zoom, Peloton, etc only back to summer 2019 levels. That's only 3 years back. If you look at the dot-com boom, S&P bottomed out in 2002 back to 1997 levels. That's a 5 year retracement. Currently S&P has barely gone back 14 months. The GFC was worse - bottomed in Dec 2008 hitting 1996 level…

Depends on the timeframe and your gut. I should have specified that I'm thinking about the next 3-6 months or so, not the next 3-6 years.

And there isn't any definition. And particularly in response to exogenous events the markets may decide to keep dropping even though they've dropped a lot. If markets always moved in a straight line it would be easy to make a ton of money off of them so they don't. However, if markets never moved in a straight line though it would be easy to make a ton of money off of them so every now and then they do.

And mostly I'm weighing what I'm seeing, which is that the yield curve isn't inverted yet, the broader economy is healthy and job growth is good and there's way more jobs than there are job seekers, along with no signs that something of substantial size has detonated in the economy yet (CMBS or whatever). Letting the air out of the overpriced tech stocks and venture capital also just doesn't seem large enough to start to tank the economy, larger corrections have happened during mid cycle slowdowns before. And UST-Luna is barely a pimple on the broader economy.

Right now I don't believe this is the start of the next recession, so the fact that COVID plays are back to summer-2019 levels suggests to me that a lot of work has actually gotten done in repricing.

Show me an inverted yield curve and CMBS popping or maybe Russian gas to Germany gets abruptly turned off and then I'll start expecting those longer scale kinds of retracements.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#435

Post by lamontcg » Tue, May 17, 2022, 1:45 AM UTC

ryathal wrote: post #279

lkrubner wrote: post #263

Earlier quoted context omitted.

"everything is a bit oversold right now on negative emotions" No!!! The Fed is raising rates. That is reality. That is not an emotion. That is absolute economic fact. Inflation is high and will remain high for at least a year (maybe longer). The period from 2008 to 2022 is going to be remembered as an abnormal period when we experienced abnormally low rates. The low rates fueled speculation, and bid up certain stocks…

I think there are going to be two periods remembered in 2008-2022. The 2008-2012-15 where interest rates were made low to prevent a depression and it worked. The the 2012-15-2022 period where interest rates were kept abnormally low because politicians didn't want to be blamed for hurting the stock market causing a bubble that pops when interest rates are forced to rise.

Nope, the fed will crank up short term rates and crater the economy to tamp down wage inflation. That will invert the yield curve and long rates (>10 years) will still remain historically low and disinflationary.

And they've been playing this game since the 90s and the Greenspan fed did it first a blew up the housing bubble that popped in 2008. This cycle goes beyond the memories of Millennials. It just keeps getting worse every cycle.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#436

Post by lamontcg » Tue, May 17, 2022, 1:46 AM UTC

ascendantlogic wrote: post #214

lamontcg wrote: post #108

Earlier quoted context omitted.

> “In a sense, the market is going to take that as kind of bullish.” I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets. There's probably going to be a positive bounce just because markets don't move in straight lines. There is always the chance that something else explodes due to stress tomorrow and hits the headlines and crypto and/or stocks start m…

> I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets. I like your optimism but we are still well above what most people would consider reasonable valuations. That said there are trillions of new dollars out there that won't want to sit on the sidelines decaying at an 8% clip forever. It will be interesting to see how it plays out.

Stocks have been well over what I'd consider reasonable valuations now since the late 90s.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#437

Post by neltnerb » Tue, May 17, 2022, 1:47 AM UTC

rntksi wrote: post #433

neltnerb wrote: post #430

Earlier quoted context omitted.

What scenario involves the UK losing an enormous amount of money would be one where they are attempting to "hold a peg"? I'm confused. Countries manipulate their currency supply in various ways in order to make their money cheaper or more expensive, I get that. But I thought the main goal was to keep exports or imports to a good balance to avoid wrecking a real economy. Like, actual people's lifestyles and jobs and w…

GP is probably referring to this: https://en.m.wikipedia.org/wiki/Black_Wednesday

Ah, thanks, very interesting.

So it sounds like this "ERM" is algorithmic enough that it broke things. It did get stopped due to human intervention though, so it feels like a weak metaphor.

I hope international currency markets aren't quite so fast... hopefully we won't find out.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#438

Post by netheril96 » Tue, May 17, 2022, 1:47 AM UTC

ImPostingOnHN wrote: post #416

wallacoloo wrote: post #411

Earlier quoted context omitted.

one usually hears the opposite argument: Bitcoin becomes more scarce as users lose their private keys. lost keys => smaller supply => higher price per unit. i can see the opposite argument though: lost keys => less desire to interact with bitcoin => lower demand => lower price per unit. so it might just be a wash.

The former relationship wouldn't play out IRL, since there's no authoritative "lost bitcoin registry" to signal to buyers that the supply has effectively decreased

The buyers do not need to know about that. The effect of supply and demand on price doesn’t depend on anyone knowing supply and demand.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#439

Post by vkou » Tue, May 17, 2022, 1:54 AM UTC

rglullis wrote: post #180

vkou wrote: post #121

Earlier quoted context omitted.

Just as a reminder about how Mt Gox played out - it looks like all the people who lost money on it will receive 1:1 fiat-denominated compensation for their losses, Mark Karpeles won't serve a day in prison, and is likely to walk away with ~3 billion worth of BTC[1]. Who'd have thought that failing to operate a bitcoin exchange is a thousand times more lucrative than actually operating one! [1] If Mark owed you a bitc…

That is assuming that the whole "we got hacked" is a complete fabrication. It is possible, but isn't it completely short sighted? I mean, who would change places with him? His head has a price, and he will never be able to hide anywhere in the world or spend any of that money. He is going to live the rest of his life being watched by authorities all around the world and he will have thousands of people believing he i…

It's pretty clear by now that he didn't hack his own exchange (the hacker was caught a few years ago). But he did operate it while being insolvent, as well as operate a bot to trade against his users.

Either way, if restitution goes as currently planned, he's going to walk away from this an incredibly wealthy man.

Individuals will keep suing him, but ~3 billion dollars can buy a lot of lawyers, and it seems unlikely that the government has anything left to prosecute him with.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#440

Post by CuriousCosmic » Tue, May 17, 2022, 2:01 AM UTC

NovemberWhiskey wrote: post #169

Karunamon wrote: post #162

Earlier quoted context omitted.

You know good and well what was meant, and that isn't it. Stop it.

Actually, no, I literally have no idea what you meant - by all means, please amplify!

Not OP but I figure I'll pitch in because nobody else explained it. When referring to backed vs unbacked Bitcoin (or any other UTxO accounting model based cryptocurrency), the "backing" isn't about whether the token is backed by another asset but rather whether your proxy holding of the token is backed by the actual cryptocurrency on the ledger.

If it's some wrapped Bitcoin that is backed, that means that there exists some UTxO which corresponds to the wrapped bitcoin tokens you hold. UTxO are atomic and unique so you can verify that your wrapped tokens have a 1:1 mapping to the tokens held within the UTxO on the native token's network. Non-backed bitcoin instead are just tokens that are handled through some minting mechanism where there is claimed to be a 1:1 equivalence without any actual tooling to prove that.

This concept of backing can actually even be further extended via Secure Multi-Party Computation where private keys can be collectively held in such a way that no user ever can see the private key but together they can coordinate to build and sign transactions with that private key without leaking it even to themselves. This can then be used to actually hold tokens from a foreign/incompatible network and interact with that network with little to any required trust.

Hopefully that helps answer what is meant.

---

Also since it's often a question asked I'll answer preemptively: "What is UTxO?"

I've mentioned the UTxO accounting model a few times here. Bitcoin doesn't have accounts but rather UTxO or Unspent(U) Transaction(Tx) Outputs(O). These are indivisible bundles of tokens that can only be created or consumed/destroyed atomically. There are no accounts but rather just private/public key pairs which can redeem/spend those UTxO. Additionally, all transactions are just a collection of input UTxO (that are consumed with the tx) and newly created UTxO. All Tx must uphold the rule that the sum of all inputs equal the sum of all outputs (or some equivalent of this rule as is the case for Monero's Zero Knowledge transaction proofs). A number of networks use UTxO or a UTxO extension (such as EUTxO or the cell model). Most famous is Bitcoin but Monero, Litecoin, Cardano, Ergo, Nervos, and a number of other networks also use this model.

This is opposed to Ethereum and co (Polkadot, Solana, Luna...) who use the balance-account accounting model. This model works like traditional ledgers where tokens are stored as some balance in an account and transactions are just transfers from one account to another.