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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

#221

Post by marcinzm »

fdgsdfogijq wrote: post #91
herval wrote: post #78

Earlier quoted context omitted.

That's pretty much how a lot of "unicorns" felt in the past 2-3 years

With all of the capital they have, you would think they would hire competent people from big tech. Instead they just find some stanford grad with a few years of experience to manage 50 people. It doesnt even make sense

Competent people will tell leadership what's wrong which leadership perceives as a threat to their egos/power. Incompetent people will tell them they're doing great while simply cashing their checks.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#222

Post by Beldin »

fdgsdfogijq wrote: post #50
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 talked to an employee that left last spring. She said they had literally no idea what they were doing. The founders are just ivy educated 30 year olds. So they decided to just start hiring everyone they could from paypal, to move into "blockchain payments". They paid huge sums. The directors there had no experience ever managing huge teams of people. It was a giant mess of unqualified people funded by cheap capital…

So, Theranos for the blockchain, roughly?

Re: BlockFi files for bankruptcy as FTX fallout spreads

#223

Post by Animats »

weard_beard wrote: post #200
Animats wrote: post #177

Earlier quoted context omitted.

That's the crypto community delusion about how fractional reserve banking works. The way fractional reserve banking actually works is that banks lend out money, and the loans are their major assets. This only works if there's heavy regulation on how sound the loans have to be. Without regulation of loan quality, there's a banking panic every few years. All the US banking crises since the 1920s have involved some form…

The same could be said for FTX. There just needs to be regulation about how sound the self-created coin backing your margin needs to be. Without regulation of the soundness of the economic value of your self-created coin you get a crypto crash. Am I crazy? Are we not describing 2 identical problems and classifying 1 of them as fraud? The soundness of loans in a deregulated environment is no better than the soundness…

Here's a tutorial on how to analyze a bank's balance sheet.[1]

Few of the crypto clowns publish their balance sheet. FTX, we now know, didn't even have a balance sheet.

[1] https://www.wallstreetmojo.com/banks-balance-sheet/

Re: BlockFi files for bankruptcy as FTX fallout spreads

#224

Post by btown »

herval wrote: post #78
fdgsdfogijq wrote: post #50

Earlier quoted context omitted.

I talked to an employee that left last spring. She said they had literally no idea what they were doing. The founders are just ivy educated 30 year olds. So they decided to just start hiring everyone they could from paypal, to move into "blockchain payments". They paid huge sums. The directors there had no experience ever managing huge teams of people. It was a giant mess of unqualified people funded by cheap capital…

That's pretty much how a lot of "unicorns" felt in the past 2-3 years

I once heard that a well-known gig economy company would open up new cities by giving employees essentially-unlimited credit cards and telling them to buy whatever they thought was needed, with no controls or multi-person approvals.

It'll be interesting to see how VC changes in the modern environment - will they still be all-in on founders willing to unsustainably burn money just to incrementally boost the probability of growth, or will they begin looking more for experienced operating teams who reach and maintain profitability (or a rapid path to get there at all times)?

Re: BlockFi files for bankruptcy as FTX fallout spreads

#225

Post by jtbayly »

rhaway84773 wrote: post #174
traveler01 wrote: post #25

Earlier quoted context omitted.

That's the thing, you only depend on centralized actors if you want to. The entire point of cryptocurrencies are to not depend on centralized institutions that can screw you over.

The issue is that the problem cryptocurrencies solve is not a real problem. The blockchain, being a public ledger, ensures that transactions are accurately recorded and can be publicly verified as such. But it’s been centuries since the actual accurate recording of transactions has been an issue. The real problems are far removed from this. When was the last time you heard about people complaining that they paid off…

> real problems that people do face, such as a vendor not providing you the goods or services that you paid for, are still a problem with blockchain.

Not just still a problem. Far worse off a problem. Chargebacks exist for credit cards and most bank transactions including wired funds. Send the crypto the wrong way at the wrong time or to the wrong place? Poof. Bye bye money.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#226

Post by aww_dang »

babypuncher wrote: post #204
aww_dang wrote: post #154

Earlier quoted context omitted.

The market is punishing bad actors with insolvency. Yet somehow the conclusion is that markets are not effective in self-regulation.

When the market punishes bad actors like this there tends to be a lot more fallout. Government regulations can help limit the blast radius or avoid them altogether. In 1929 the free market punished the banks for their bad behavior and everyone suffered a decade long depression because of it.

I disagree on all points here.

Not only did the US central bank create the conditions for the stock market crash of 1929, but the interventionist policies of FDR prolonged the economic hardship. Interventionism put the "great" in the "great depression". Not only did they create the bust, but they magnified the blast radius.

https://cdn.mises.org/Americas%20Great%20Depression_3.pdf

https://mises.org/library/did-fdr-make-depression-great

https://mises.org/library/forgotten-depression-1920

https://mises.org/wire/1920-crash-cured-itself

Re: BlockFi files for bankruptcy as FTX fallout spreads

#227

Post by HashBasher »

postalrat wrote: post #7
simple-thoughts wrote: post #3

With projects like blockfi, users get all the disadvantages of the centralized traditional financial system without any of the regulatory protections that have built up over centuries. Terrible for the people with assets in blockfi but extremely predictable. The point of defi is that you can use financial services without a centralized counterparty. People who can’t handle their own keys should be using traditional b…

What's the cryptocurrency endgame? Everyone has keys in cold storage waiting for the day we have the mathematics that destroys them?

What's the endgame of a savings account? Are folks just going to sit on their money until it eventually collapses?

Re: BlockFi files for bankruptcy as FTX fallout spreads

#228

Post by SilasX »

sjsdaiuasgdia wrote: post #198
SilasX wrote: post #142

Earlier quoted context omitted.

But why does it add up to 7000 headcount rather than 3500 headcount or 14000 headcount?

The accumulated events and decisions over the lifespan of the company. What's done in house, what's done elsewhere? What "bus factor" do you want your engineering teams to have? What events have left scars on the organization? What prejudices and preferences does the executive leadership have? How does the company handle the fiefdom builders who hire just to make their org size increase? How does the company handle a…

The point is, it’s easy to vomit a laundry list of reason why a company needs more staff. But it doesn’t shed light onto why a 7000 figure is reasonable until it justifies why other figures are too high or too low. Nor does your comment.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#229

Post by vdfs »

smitty1110 wrote: post #217
postalrat wrote: post #7

Earlier quoted context omitted.

What's the cryptocurrency endgame? Everyone has keys in cold storage waiting for the day we have the mathematics that destroys them?

The endgame is regulation. The US Treasury launches a digital dollar and declares other USD-demoninated stablecoins as illegal, crushing the on and off ramps for most exchanges. Adoption by banks and brokerages removes the need for separate crypto exchanges. KYC/AML requirements crush whatever remains.

> crushing the on and off ramps for most exchanges

That exchanges don't need help with that

Re: BlockFi files for bankruptcy as FTX fallout spreads

#230

Post by andirk »

fdgsdfogijq wrote: post #91
herval wrote: post #78

Earlier quoted context omitted.

That's pretty much how a lot of "unicorns" felt in the past 2-3 years

With all of the capital they have, you would think they would hire competent people from big tech. Instead they just find some stanford grad with a few years of experience to manage 50 people. It doesnt even make sense

Incompetent people usually hire equally incompetent people as to not be found out. I have seen it done subconsciously and outright deliberately.
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