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Binance to acquire FTX

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Re: Binance to acquire FTX

#331

Post by yucky »

rchaud wrote: post #280
yucky wrote: post #183

Earlier quoted context omitted.

If everybody walked into their bank right now to withdrawal, they couldn't cover either. Right?

You may as well say "if everybody jumped off a bridge at the same time...." How many bank runs have there been in 2022 in the developed world? The reason people don't try to pull their money out all at once is because their deposits are insured, because their bank pays into an insurance pool.

    The reason people don't try to pull their money out all at once is because their deposits are insured, because their bank pays into an insurance pool.
Only up to $250k.

Re: Binance to acquire FTX

#334

Post by Analemma_ »

jonas21 wrote: post #275
TravelTechGuy wrote: post #201

Some more background: the companies were engaged in fighting over regulations, and on a personal basis between the 2 CEOs. It went down to really childish levels at some point. But one thing is undeniable: SBF (FTX CEO) was trying to weaponize US regulation against his biggest rival CZ (Binance CEO). CZ retaliated by selling the FTT token, exposed the fact FTX was over-leveraged, and took over. This is, as the kids o…

For those not up to date on crypto people, SBF is Sam Bankman-Fried [1] and CZ is Changpeng Zhao [2]. I don't know why they insist on being called by their initials like they're some sort of ticker symbol. [1] https://en.wikipedia.org/wiki/Sam_Bankman-Fried [2] https://en.wikipedia.org/wiki/Changpeng_Zhao

Because they think the people they're most similar to are respected old-school hackers (rms, jwz, etc.) instead of carnival hucksters like P. T. Barnum.

Re: Binance to acquire FTX

#335

Post by weswilson »

skippyboxedhero wrote: post #250
rhaway84773 wrote: post #236

Earlier quoted context omitted.

This. I’m not sure what Lemonade does differently from other insurers than providing a nicer UI. They likely also have lower costs due to eliminating the middle men whose job is to translate text on the screen into words spoken to a customer. So their lower costs could actually be legitimate.

Obviously this does vary because retail insurance is usually sold locally but the middle men were eliminated years ago. First, it was phones. This happened in the early 90s. Then it was internet which was largely finished by the early 2010s. The only exception for this is that online price-comparison websites have added back some distribution costs...but you still need to spend on marketing if you are online (general…

There are still plenty of middle men in insurance. There are Carriers, MGA's, Agency Networks/Aggregators, and Brokers.

Large insurance carriers (think Geico, etc) with enough market share (and captive agents) have the vertical integration that eliminates the middle men, but there is a whole world of insurance that most people don't realize each taking their cut.

Re: Binance to acquire FTX

#336

Post by beambot »

candiddevmike wrote: post #209
eftychis wrote: post #196

Earlier quoted context omitted.

As other people said, usually a lot of assets are illiquid in 24 hours. You can say I have money to buy this house, but if I ask you for the money the next 24 hours, most people will say they need more time to liquidate. It is actually irresponsible to the users (risk management wise) to be keeping all that cash in hand 24/7. The easiest bad case example: are you keeping all your savings under your mattress? Edit/to…

I'm not a business masquerading as a bank, lol.

Banks don't have cash on hand equal to assets either...

Re: Binance to acquire FTX

#337

Post by tim333 »

kristjansson wrote: post #160

Why is it apparently so difficult to run a solvent crypto exchange? On the face, it shouldn't be too hard, just take deposits, stick them in a wallet, and swap client balances in a database. Is the temptation to maintain a reserve ratio < 1 just too great? Do operators try to earn small, low-risk return on client funds only to find there are no low-risk, positive-return assets in crypto? Are the extending margin to c…

The majority of crypto exchanges failing has been due to them being hacked or assets stolen. It seems to be an ongoing problem. It's kind of inherent to crypto transfers not being reversible. In a regular stock exchange if a crook tries to transfer the assets somewhere you can freeze or reverse the transaction. Crypto not so much.

The FTX issues seem to be something else - it's a bit unclear what exactly at the moment.

I've got some assets with FTX so I'm curious. As well as holding crypto they do futures trading on it and I wouldn't be surprised if Alameda Research, their privately held prop trading fund is a counterparty to some of those and may have gone bust.

Re: Binance to acquire FTX

#338

Post by DEDLINE »

dQw4w9WgXcQ wrote: post #248

Will be interesting to see how this assertive prediction from "someone in the industry" a few days ago plays out: >> Regardless if FTT collapses, it wouldn't matter cause insolvency both the asset and liability side of the balance sheet would go down. [1] We got our FTT collapse today, let's see if the "experts" are correct. [1] https://news.ycombinator.com/item?id=33467429

Was just thinking about this comment

Re: Binance to acquire FTX

#339

Post by null0pointer »

three_seagrass wrote: post #145
ChainNet wrote: post #37

Earlier quoted context omitted.

There's nothing decentralized about FTX or Binance. They operate in an opaque manner like any traditional business, transparency comes from forced audits & regulation. Decentralized finance is built on chain where all assets are publicly auditable at all times. EDIT: parent comment talked about decentralized finance, then edited to remove mentions of defi

Even without the edit, your response feels like a no-true-scotsman i.e. an attempt to remove bad actors who deal in decentralized cryptocurrencies from the purity that is defi. What are some large, successful defi organizations today?

I don't see at all how you can say calling out literally centralized companies as "not-decentralized" is no-true-scotsman. It's just an obvious fact.

> What are some large, successful defi organizations today?

In my opinion, if there is an organization behind it then it is, by definition, not decentralized. Yes, even the ones that operate fully on-chain.

Re: Binance to acquire FTX

#340

Post by lottin »

kolbe wrote: post #304
ramish94 wrote: post #25

Earlier quoted context omitted.

Welcome to the world of unregulated finance. There’s a reason the FDIC exists and all banks must be insured.

The FDIC is just a ruse to let "useful idiots" think that everything is okay. In reality, the FDIC charges banks 90% less than the actuarial value of the risk they take on, and banks make wildly risky loans/bets all the time, knowing it's "heads I win, tails the taxpayer loses." Insofar as you can call US Finance any better than crypto, it's because of socialized losses. IMO, bank failures are a much more appropriate…

What is the 'actuarial value' of the risk a bank takes on?
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