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FTX to file for U.S. bankruptcy, CEO resigns

reuters.com

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Re: FTX to file for U.S. bankruptcy, CEO resigns

#531

Post by georgeglue1 »

bmitc wrote: post #458
shorthistory wrote: post #423

Can anyone speculate what Bankman-Fried's exit plan was? Was this a fraud that got out of control, or premeditated? If it was premeditated, what was the exit plan? Did he expect to be able to gamble with customer funds indefinitely? Were the Effective Altruism intimations genuine? Why, if Alameda was a market maker, and they therefore presumably have some form of insight into the markets, did they then decide to take…

My thoughts are that FTX was maybe a legitimate business, but then Alameda was his trading baby that just happened to be run by kids, including himself, that have no idea what they're doing and was losing money left and right. Then using FTX customer funds was viewed as just a "let's move these funds over to get our trading back on track and when we do, we'll move them back". That's my honest guess if I'm being gener…

My understanding is that Alameda was a market maker, which should have less exposure to down / upswings.

What kind of bets was Alameda making? Why would it need so much leverage?

I understand why loaning money to Alameda could be rationalized a risky, but not sketchy move (if Alameda posted collateral, paid reasonable terms like anyone else would, etc.).

Re: FTX to file for U.S. bankruptcy, CEO resigns

#532

Post by bananapub »

kasey_junk wrote: post #516
thwayunion wrote: post #491

Earlier quoted context omitted.

> can we STOP the blind short-term speculation on the promise of extreme wealth I first played around with blockchain in 2011 or so and I still don't know what actual utility this technology is supposed to have. I have never -- never -- encountered a value-producing use case for cryptocurrency that can't be solved by either signed git commits or a SQL database. Around 2015 a lot of people I thought were smart enough…

A “universal” api for moving money between financial institutions that don’t have existing relationships would be extremely valuable and could unlock innovation in everything from payments to mortgages. But the blockchain space has an extreme bias against the existing finance world. Frequently products in the space want to tear it down as they view it as predatory. This leaves us with the current situation, the crypt…

I swear to god, half of the problem with cryptocurrency is Americans not understanding what a functional personal banking system looks like. The big American banks just never bothered to move beyond the 1970s, and so otherwise fairly well-informed Americans in tech assume you need some sort of completely mad system like "consume the power of Spain making a distributed merkel tree full of partial hash collisions" to make bank transfers work.

in every other rich country, you just log in to your bank's web ui thing, click "SEND MONEY TO MY MUM", and then it sends it, for free, to your mum, with no risk of your mum being able to take more money, no random intermediary, no worry about if it actually gets there, no third party holding it in a non-bank cash account, no pre-authorisation, etc. you enter a bank identification number and an account number (and a name, usually, to avoid mistakes) and it just happens and it just works. in most countries this is quick, even, e.g. in the UK it's almost always FOR FREE.

no blockchains, no multi-billion ponzi schemes, just a boring and simple service offered by every bank in the country.

making the Fed make banks just introduce free, instant bank transfers could have saved the world tens of billions of dollars and apparently tens of billions of tons of greenhouse gases.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#533

Post by chx »

Julesman wrote: post #463

I'm not a luddite (on hacker news lol) and I can clearly see the revolutionary potential of blockchain. But, for the love of God, can we STOP the blind short-term speculation on the promise of extreme wealth. Moderate investment can support development without the kind of hype that ruins lives and sullies public perception of the technology.

> and I can clearly see the revolutionary potential of blockchain.

I can not.

It's been 13 years and there's still nothing.

It was never anything else but a scam and can not be anything else but a scam for all crypto"currencies" with a transaction fee are negative sum games.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#535

Post by AYBABTME »

bmitc wrote: post #458
shorthistory wrote: post #423

Can anyone speculate what Bankman-Fried's exit plan was? Was this a fraud that got out of control, or premeditated? If it was premeditated, what was the exit plan? Did he expect to be able to gamble with customer funds indefinitely? Were the Effective Altruism intimations genuine? Why, if Alameda was a market maker, and they therefore presumably have some form of insight into the markets, did they then decide to take…

My thoughts are that FTX was maybe a legitimate business, but then Alameda was his trading baby that just happened to be run by kids, including himself, that have no idea what they're doing and was losing money left and right. Then using FTX customer funds was viewed as just a "let's move these funds over to get our trading back on track and when we do, we'll move them back". That's my honest guess if I'm being gener…

I think they thought they were honest and doing things properly, and didn't realize that their holding of FTT was making them as bad as the other frauds before. I think these ouroboros are complex enough that even main players don't necessarily understand the position they've put themselves in.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#536

Post by Barrin92 »

Julesman wrote: post #463

I'm not a luddite (on hacker news lol) and I can clearly see the revolutionary potential of blockchain. But, for the love of God, can we STOP the blind short-term speculation on the promise of extreme wealth. Moderate investment can support development without the kind of hype that ruins lives and sullies public perception of the technology.

You don't need to preemptively apologize for criticizing or questioning a particular data structure. That certainly does not make anybody a luddite. Also luddites had some decent reasons for their activism given the mass unemployment as a result of factory work, which I don't think we're facing with the 'blockchain revolution' any time soon, unless you operate a casino maybe.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#537

Post by hinkley »

thwayunion wrote: post #491
Julesman wrote: post #463

I'm not a luddite (on hacker news lol) and I can clearly see the revolutionary potential of blockchain. But, for the love of God, can we STOP the blind short-term speculation on the promise of extreme wealth. Moderate investment can support development without the kind of hype that ruins lives and sullies public perception of the technology.

> can we STOP the blind short-term speculation on the promise of extreme wealth I first played around with blockchain in 2011 or so and I still don't know what actual utility this technology is supposed to have. I have never -- never -- encountered a value-producing use case for cryptocurrency that can't be solved by either signed git commits or a SQL database. Around 2015 a lot of people I thought were smart enough…

I worked on code that used a Merkle Tree before any of us had heard of a Merkle tree or this blockchain bullshit came around, so I never got starry eyed about any of this stuff.

That project was in an environment where chain of custody is an established mechanism for ensuring public safety. Layering a web of trust over the top of that was something the users could mostly digest. Consumers can only use software signed by a particular department or person, only approved software is signed, and approval requires a chain of approvals before it going back to an original signature that says "these are the bits we gave you".

That's a useful application of the Merkle Trees. But you'll note there's no distributed consensus, and there's no Proof of Work. Or rather, the proof inferred, backed by process and in this case legistlation.

Blockchain admits it's only barely a Merkle Tree right in the name. Our graph looked a lot more like trunk in a git repo. Slightly more tree-like but people only care about the last node.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#538

Post by cellis »

shaburn wrote: post #504
shorthistory wrote: post #423

Can anyone speculate what Bankman-Fried's exit plan was? Was this a fraud that got out of control, or premeditated? If it was premeditated, what was the exit plan? Did he expect to be able to gamble with customer funds indefinitely? Were the Effective Altruism intimations genuine? Why, if Alameda was a market maker, and they therefore presumably have some form of insight into the markets, did they then decide to take…

10 Billion dollar question: Who were the counter parties to these trades where customer funds were "lost".

It's called value destruction. The coins value dropped very quickly, the counter parties then where either 1) Most likely nobody, (as in nobody cashed out, as the myriad altcoins approached the limit of worthless) and 2) traders on FTX who cashed out other ,"more valuable" coins they were lent after depositing altcoins as collateral.

Re: FTX to file for U.S. bankruptcy, CEO resigns

#539

Post by belter »

caycep wrote: post #520
kasey_junk wrote: post #516

Earlier quoted context omitted.

A “universal” api for moving money between financial institutions that don’t have existing relationships would be extremely valuable and could unlock innovation in everything from payments to mortgages. But the blockchain space has an extreme bias against the existing finance world. Frequently products in the space want to tear it down as they view it as predatory. This leaves us with the current situation, the crypt…

How is it currently run? From my layperson experience, every time I do a wire transfer, I feel like I'm inputting data into a mainframe or something...

Well technically...

[1] - "How Mainframes Keep The Financial Industry Up And Running"

"...92 of the top 100 banks use the mainframe to provide banking services to customers, and other types of financial services companies depend on the mainframe, as well. Visa, for example, uses the mainframe to process billions of credit and debit card payments every year. According to some estimates, up to $3 trillion in daily commerce flows through mainframes..."

[1] https://blog.share.org/Article/mainframe-matters-how-mainfra...

Re: FTX to file for U.S. bankruptcy, CEO resigns

#540

Post by reaperducer »

twblalock wrote: post #528

This has been a wonderful social experiment, enabling people who didn’t live in the 19th century to see what happens when banking and investing is treated like the wild west. Maybe something could have been different this time? In the end it wasn’t, and it proves the necessity of regulation and institutions. There aren’t very many other aspects of our society where we get to have that kind of experiment and find out…

This has been a wonderful social experiment, enabling people who didn’t live in the 19th century to see what happens when banking and investing is treated like the wild west

For those who can read long books, see Anthony Trollope's The Way We Live Now. https://en.wikipedia.org/wiki/The_Way_We_Live_Now

The 2001 television version was also excellent: https://en.wikipedia.org/wiki/The_Way_We_Live_Now_(2001_TV_s... , and only four episodes, instead of 100 chapters.

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