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Celsius acknowledges $1.2B hole in balance sheet

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Re: Celsius acknowledges $1.2B hole in balance sheet

#271

Post by pxmpxm »

vkou wrote: post #233
yokem55 wrote: post #164

Earlier quoted context omitted.

> but I'd like to point out that MakerDAO is down 70% YTD, Aave is down 60%, Uniswap is down 60%, etc, etc. The health of the protocols is only very marginally connected to the value of the tokens that govern them. Even if the $UNI token went to zero, the liquidity pools and swap contracts would still work fine. $MKR and $AAVE are a little more complicated because if the governance tokens got too cheap, the protocols…

That's wonderful. But what are all these loans used for? Arbitrage? Trading other coins around? It's turtles all the way down - there's nothing that generates value at the bottom.

I've yet to have success explaining that very ex nihilo problem to crypto people* - even if you build out all of the last 100 years worth of financial system innovation, at the very bottom all it's doing is very efficient price discovery of people's Pogs collection. It will all fold as such.

* anecdotal, but there seems to a strong inverse correlation between crypto enthusiasm and education in economics or finance. Mostly libertarian leaning tech bros in my sample set.

Re: Celsius acknowledges $1.2B hole in balance sheet

#272

Post by nradov »

dcolkitt wrote: post #266
vkou wrote: post #233

Earlier quoted context omitted.

That's wonderful. But what are all these loans used for? Arbitrage? Trading other coins around? It's turtles all the way down - there's nothing that generates value at the bottom.

We could easily put real economic assets and loans on-chain. The legal frameworks exist On-chain yields are now low enough and “real-world” interest rates high enough that there’d be demand. Delaware courts can and have enforced corporate entities governed by software. The problem is that all of this is currently illegal, because The SEC and Gary Gensler have made zero effort to build a regulatory framework for secur…

That is entirely hypothetical and there is zero benefit to putting real economic assets and loans on-chain.

Re: Celsius acknowledges $1.2B hole in balance sheet

#273

Post by tsimionescu »

aaaaaaaaata wrote: post #256
tsimionescu wrote: post #230

Earlier quoted context omitted.

> You'd have been better off just buying bitcoin on margin (Since BTC is only down 53% YTD). It's also funny to note that you'd have been better off just buying Turkish Lyra, which is "only" down ~29%. Most fiats, at least in Europe, are down waaaaaay less than that, of course. So much for crypto as a store of value.

Will we catch you right here next year, or the year after when it's at a new all-time high, saying the opposite?

At worst I may be silent if that happens, but I have never believed in the long term value of crypto, even when friends and family members invested.

Re: Celsius acknowledges $1.2B hole in balance sheet

#274

Post by tsimionescu »

TimJRobinson wrote: post #247
tsimionescu wrote: post #229

Earlier quoted context omitted.

This only works if you use crypto as a store of value and even then it doesn't scale to any significant fraction of the population, for most coins. BTC and Eth, at least, are simply too slow for everyone to have their own wallet and do their own on-chain transactions, even if rarely, if we imagine they will ever reach some significant portion of the population. And LN doesn't solve this in any way, before anyone clai…

Layer 2's do solve it, and will reach 14M TPS by 2030 [0], which is more than enough for the world. He has explanations of how the different components work in different posts on the site. 0: https://polynya.medium.com/conjecture-how-far-can-rollups-da...

The problem is that you need at the very least 1 on-chain transaction for every human participant, to get money into one wallet that they control. But BTC barely manages 5 TPS and ETH maybe 20. This means that BTC would need about 115 days to add 50M new people onto the block chain, and ETH could manage it in a month - only to have 1 wallet with some amount of coins in it (of course, assuming nothing else whatsoever is happening on the block chain in that time).

Only after you get past this hurdle do you even have access to a L2. Of course, you then need extra transactions on the L1 chain to gain access to the L2 - with LN at least, this scales even worse, as you need some fraction of the number of pairs of people to communicate - so some fraction of (50M)² transactions - which fraction depending on how centralized the network will be.

Then of course, L2s offer little in terms of guarantees for your money unless you can quickly and often close the channel and get the L1 guarantee.

So no, BTC and ETH fundamentally can't scale to a large number of people using them, regardless of how many trillions of transactions per second L2s can do. They are failed technologies for anything similar to their original goals.

It's barely even worth mentionibg that with 1 wallet per real person, you get worse privacy for your transactions than VISA offers you - as many have shown, for any kind of practical privacy you need many temporary wallets, bringing the total number of transactions required just to have a single Satoshi in those wallets to many times more.

Re: Celsius acknowledges $1.2B hole in balance sheet

#275

Post by tsimionescu »

aaaaaaaaata wrote: post #257
tsimionescu wrote: post #231

Earlier quoted context omitted.

There is plenty of other manipulation, like constructing ponzi schemes that require BTC/ETH to get into, or "stable coins" backed by other crypto, or selling "art" like NFTs. These all sooner or later crash down, and bring the value of ETH and BTC down with them. Already billions of dollars have left the crypto space, and are unlikely to ever come back. It of course isn't impossible that BTC will bounce back, but the…

> are unlikely to ever come back. This is you projecting, to some extent.

I very much doubt that people who have bought BTC at $60k, or the people cashing out of USDT while they still can, will want (or be able to) bring their money back into this crazy ecosystem.

Especially so as the price of energy increases and global warming becomes ever more apparent, keeping many afraid of investing in such energy wasteful endeavors.

Re: Celsius acknowledges $1.2B hole in balance sheet

#277

Post by oneoff786 »

loeg wrote: post #217
thematrixturtle wrote: post #207

Earlier quoted context omitted.

Checked your electricity bill lately? https://www.bloomberg.com/news/articles/2022-03-07/electric-...

> Checked your electricity bill lately? My rates are 11-13 cents per kWh, the same as they’ve been for years. Our power is mostly hydro, with smaller amounts coming from nuclear and wind. So no, that pithy question isn't particularly useful.

Maybe your local area isn’t representative of the general global market?

Re: Celsius acknowledges $1.2B hole in balance sheet

#278

Post by powerhour »

aaaaaaaaata wrote: post #260
FabHK wrote: post #250

Earlier quoted context omitted.

First, you are conflating settlement of securities with money transfers, two different things. Next, I can transfer money in Europe (SEPA) settling immediately, for a tiny fee ($0.30 or so). Finally, I've had BTC transactions in the mempool for 16 hours or more, hanging in there without any confirm. They might just drop out, or they might eventually be included in a block - who knows. Not exactly a predictable and re…

> I've had BTC transactions in the mempool for 16 hours or more ...and then what? This is the first story I've heard like this.

I've experienced this as well. The "and then what" is a big unknown. Is the BTC "gone" forever? Who knows.

Re: Celsius acknowledges $1.2B hole in balance sheet

#279

Post by skippyboxedhero »

Peleus wrote: post #84
skippyboxedhero wrote: post #44

Earlier quoted context omitted.

People significantly underestimate how much cost there is at certain points in the chain. Interbank transfers are very cheap. A lot of central banks have invested heavily in payments systems too (the BoE is one, Faster is very good). But at certain other points, this technology could be very valuable. Two examples that occur to me immediately are pensions and fund administration. Obviously, Ethereum goes beyond that…

> I remember vividly opening the door to the pig pen, and it was just a sea of people, 95% just responding to very basic customer queries/doing incredibly basic computation work and costing huge amounts of money...because, of course, there is no cost pressure from "customers"...a parallel that more people understand is US healthcare admin, huge inefficiencies, pension admin is like that How does blockchain solve this…

Because all of the operations that these people perform can be performed computationally (and the reason why they aren't now is not necessarily technological, all the technology exists to do this today but blockchain forces everyone to change all at once).

It is already happening.

Re: Celsius acknowledges $1.2B hole in balance sheet

#280

Post by skippyboxedhero »

msbarnett wrote: post #187
kelseyfrog wrote: post #137

Earlier quoted context omitted.

Blockchain solves it by making it so that all that goes away. In return if something fucks it up...well look at every crypto project that has ever crashed. I'm not being glib. That's the solution.

How on earth do you imagine a blockchain makes customer support go away?

This is why you don't understand...the "customer" for pensions/fund managers is not the end-user, it is financial intermediaries (in most countries anyway, the level of disintermediation varies, some do market themselves to individuals i.e. Vanguard but most do not, the commission does not go to the customer).

All of the technology to do away with this exists now and existed before blockchain. But most of these companies haven't implemented because they aren't native tech companies (I don't think people understand on here, these places don't have any software engineers, they hire consultants, their idea of a "tech guy" is the guy who sorts out the Microsoft licences) and the cost saving is only realised if everyone adopts it.

With blockchain, it allows you to decentralise a whole set of computational logic that was previously performed by hand, and you change how people interact with that.

It all seems totally puzzling...because most people assume that these businesses are already using technology, when they aren't. Blockchain incentivizes business transformation across the supply chain, which allows you to remove cost from almost every level.

The question of actual customer support is not going away, it will never go away. That is what financial advisers are for, they are actual customer support.

Classic HN though, a bunch of people who don't work in an industry pontificating about how that industry works...genius.

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