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BlockFi files for bankruptcy as FTX fallout spreads

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Re: BlockFi files for bankruptcy as FTX fallout spreads

#111

Post by halpmeh »

skrebbel wrote: post #27
propter_hoc wrote: post #16

Somehow these guys peaked at about 900 employees, according to linkedin ( https://www.linkedin.com/company/blockfi ) They've raised about a billion dollars of VC - https://www.crunchbase.com/organization/blockfi-inc/investor... (note, CB lists $1.4b, of which 400M is debt from FTX, which I imagine they never got) Unbelievable the amount of destruction of value here... it's just total carnage.

I’m not convinced there’s any destruction of value when the entire value proposition is a lie. When I tell you my lemonade stand is worth a billion, and you believe it for a while, and then you realize it isn’t really, no value was destroyed.

VC's had money, i.e. capital. Now the money is gone. What would you describe that as if not destruction of capital.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#112

Post by itake »

blockfiuser0102 wrote: post #75

this is bad thing for all depositors who are losing money. but good for overall progress of crypto. centralized custodians should be regulated, and users should be educated about the benefits of choosing self custody and decentralized exchanges over unregulated and opaque services. contagion will spread more after this, so expect more centralized services to fall. disclaimer: i am former BlockFi depositor.

> users should be educated about the benefits of choosing self custody and decentralized exchanges over unregulated and opaque services.

Are there any "self custody" or "decentralized exchanges" that offer 8% interest on deposits? I think you are comparing apples and oranges here.

disclaimer: I am a current 3-figure BlockFi depositor

Re: BlockFi files for bankruptcy as FTX fallout spreads

#113

Post by bnralt »

ceejayoz wrote: post #37
rahen wrote: post #14

Earlier quoted context omitted.

> Sure, but you can't use DeFi to trade fiat for crypto. Of course you can, both ways. - https://bisq.network - https://learn.robosats.com

https://learn.robosats.com/docs/trade-pipeline/ > On a private chat, Bob tells Alice how to send him fiat. https://learn.robosats.com/docs/payment-methods/ > You can pay with any method that both you and your peer agree on. This includes the higher risk method such as PayPal, Venmo, and Cash apps. C'mon, that's not trading fiat for crypto. That's "PayPal me some money".

What's interesting is it seems they're only putting up a a 3% bond from what I can see [1]. So it looks like people could just take 97% of your money and run.

Whenever a big exchange fails, we see a lot of people say "of course, this is why decentralization is better." But I'm not convinced people are less likely to lose money in decentralized exchanges. It seems like it would actually be easier, it's just that a bunch of small scale scams aren't going to get the same attention as a huge exchange collapsing.

[1] https://bitcoinmagazine.com/business/robosats-private-bitcoi...

Re: BlockFi files for bankruptcy as FTX fallout spreads

#114

Post by woodruffw »

Mistletoe wrote: post #97
woodruffw wrote: post #86

Earlier quoted context omitted.

Given the amount of handwringing we've seen over the past couple of weeks in re: Twitter's headcount, it astonishes me that we haven't seen anything close to that for these cryptocurrency firms. Twitter ran one of the world's largest social media networks with around 7000 people; what in the world is Kraken doing with ~3400[1]? [1]: https://www.linkedin.com/company/krakenfx

Kraken actually handles money so it needs customer service and Twitter is just a bunch of already written code for posting stuff and sometimes (although much less now!) getting ad dollars. What do (did) 7000 people do at Twitter? I hate to ask the question because it aligns me with Elon whom I despise right now. But what do all the employees do at tech companies? I thought the beauty of tech and why the valuations we…

The value proposition of decentralized finance was supposed to be a replacement for traditional finance: automating away the hundreds of manual roles that banks currently employ as part of their regulatory requirements and customer services.

Do you have a source that shows that a substantial percent of Kraken's headcount is customer service? They've tried recruiting me a handful of times, and each time they highlighted their voracious appetite for engineering talent (and corresponding rapid growth of their engineering teams).

As I said: Twitter was one of the largest social media networks on the planet, one that ran its own datacenters and independent ad business (along with moderation teams, service teams, etc.). I'm not particularly interested in defending a headcount of 7000 people; only that it makes far more sense to me than roughly half that number at a cryptocurrency firm.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#115

Post by aww_dang »

Auracle wrote: post #51
ARandomerDude wrote: post #15

Earlier quoted context omitted.

That sounds nice in theory, but of course these companies are free to sit down and hammer out professional standards without the government telling them to. "We really want to be told what to do but nobody will" is code for "I'm not doing anything until the government makes me, and I'll redirect blame to the glacially slow government the whole time."

That’s easy to say, but that’s going to make those companies uncompetitive. Look at how fast FTX overtook Coinbase, a long established player that - as far as anyone can tell - isn’t doing anything shady.

There's nothing uncompetitive about not going bankrupt while your competitors do.

There's nothing uncompetitive about publishing 3rd party audits.

These are the trust signals the market rewards. Meanwhile the market is punishing bad actors with insolvency.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#116

Post by jerf »

"We do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda"

I feel like the term "exposure" was intended as a euphemism, but it is now so thoroughly overused that I am developing a more negative reaction to the term than the words it was intended to hide from. "We had exposure to X" is starting to sound worse to me than "We invested in X and X lost a lot of our money"! The latter sounds like a reasonable thing that happens even to reasonable people but I'm starting to associate the former with more insane things happening to careless people.

But maybe that's just because of the sort of things I tend to read.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#117

Post by dehrmann »

ilamont wrote: post #80
seydor wrote: post #55

Earlier quoted context omitted.

VC wealth redistribution

There are LPs behind a lot of these incompetent VCs dumping money into in crypto, including public workers' pension funds.

My hope is most of the crypto investing was isolated to crypto funds, though I still lost some respect for VCs for even playing the crypto game.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#118

Post by PM_me_your_math »

dragonwriter wrote: post #24
PM_me_your_math wrote: post #21

Earlier quoted context omitted.

Is it wrong to assume that this is because the industry is mostly built upon a house of cards or because of bad actors? Objectively asking.

The industry is mostly built by bad actors on a house of cards.

No post body was provided.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#119

Post by almost »

jrm4 wrote: post #65
skrebbel wrote: post #27

Earlier quoted context omitted.

I’m not convinced there’s any destruction of value when the entire value proposition is a lie. When I tell you my lemonade stand is worth a billion, and you believe it for a while, and then you realize it isn’t really, no value was destroyed.

Unfortunately, you're also literally describing the fiat money system we use.

Cryptocurrency people seem to think that's an argument for cryptocurrency!

Re: BlockFi files for bankruptcy as FTX fallout spreads

#120

Post by kasey_junk »

seydor wrote: post #102
ilamont wrote: post #80

Earlier quoted context omitted.

There are LPs behind a lot of these incompetent VCs dumping money into in crypto, including public workers' pension funds.

Pension funds are investing in VCs?

Yes? It’s extremely common.
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