BlockFi files for bankruptcy as FTX fallout spreads • Hacker News Board

Re: BlockFi files for bankruptcy as FTX fallout spreads

#271

Post by jsemrau » Mon, Nov 28, 2022, 6:50 PM UTC

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…

Ah the good old "Investment Banking or Consulting Background (Big 4) required"

Re: BlockFi files for bankruptcy as FTX fallout spreads

#272

Post by andirk » Mon, Nov 28, 2022, 6:51 PM UTC

jrm4 wrote: post #215

almost wrote: post #119

Earlier quoted context omitted.

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

Yeah, I see all my downvotes. I'm not saying it because I strongly favor OR hate either of these systems. I'm not here trying to say "Fiat is dumb and evil and crypto will save us all." I'm just saying because it's the truth. We don't do real "fractional reserves," we don't have "gold" etc. Our money is backed up by "America, with the guns, is good for this made up money," which I believe is generally true, and not a…

For a highly technical and intelligent group that is HN, being blanket negative on crypto is the battle cry, but pointing out how fiat is largely based on fiction as well ("faith" written next to a stone mason eye in a pyramid) is not tolerated.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#273

Post by lawn » Mon, Nov 28, 2022, 6:51 PM UTC

max51 wrote: post #193

danuker wrote: post #169

Earlier quoted context omitted.

I agree. I held Bitcoin Cash since it forked, because it is superior technically. But I am disappointed with its limited adoption. BCH allows more transactions. BTC would take 18 years for 4B people to perform a single transaction each. And it costs ridiculous amounts of resources for a ridiculous amount of constant security.

BCH is just kicking the can down the road a bit further. If it were to gain massive adoption rapidly, the only way it could scale if they follow their current ideology is by hosting the nodes on bigger and bigger server racks, eventually reaching the point where there is only one or two real nodes hosted in a cloud provider datacenter somewhere. I don't know what the perfect block size is, but quadrupling down on on…

> I don't know what the perfect block size is, but quadrupling down on on block size and turning down all alternatives is not a good long term plan.

BTC's 1 MB (or a bit more with segwit accounting) is just hopelessly obsolote, we could easily handle multiples without any issue whatsoever, and it would require a massive increase there after to reach the state of "one or two nodes".

Further, BCH isn't "turning down alternatives". It's a permissionless system after all, and it does have malleability fixes if you want to have layer two for it.

It's BTC who is blocking any on-chain scaling and bet everything on the experimental Lightning Network (that's still experimental mind you).

Re: BlockFi files for bankruptcy as FTX fallout spreads

#274

Post by SilasX » Mon, Nov 28, 2022, 6:51 PM UTC

sjsdaiuasgdia wrote: post #263

SilasX wrote: post #228

Earlier quoted context omitted.

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.

Your comment continues to presume that there is a specific correct value or range of values. That's simply not the case. The list of potential reasons is long because there are a lot of contributing reasons . What are Twitter's goals pre-buyout? Are those the same as Twitter's goals post-buyout? What are the decisions the company makes in pursuing those goals, in each of those contexts? Analyzing all the decisions th…

> Your comment continues to presume that there is a specific correct value or range of values

No, I was replying to a comment that was attempting to justify ~7000 as a reasonable figure for what Twitter’s app needs to do.

Don’t take my word for it! Read the thread history if you don’t believe me!

Re: BlockFi files for bankruptcy as FTX fallout spreads

#275

Post by treeman79 » Mon, Nov 28, 2022, 6:52 PM UTC

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…

Implemented the “facade” for a services company a dozen years ago. Request comes in and sales agents manually find a good local in the area. Got it the point where we were ready to scale nation wide.

Leadership decided it was useful to have as something to prove we knew had great tech. But really wanted to do manual sales of other services. They were only looking at next quarter profits. Not seizing the industry.

Finally left in disgust. They gradually faded as manual wasn’t scalable. Was years before I saw comparable competitors.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#276

Post by mmmpop » Mon, Nov 28, 2022, 6:53 PM UTC

christiangenco wrote: post #235

My wife and I had about 10% of our life savings in BlockFi. This is a pretty big blow for us, especially while gearing up to start a family. It's easily in the top 5 worst things to happen to me in my life. Is there any hope of individual creditors getting any of their money back? I'm unfamiliar with how bankruptcy works.

Sorry but if you put 10% of your net worth into BlockFi you didn't fully understand the risks. I feel bad for anyone who lost money (a few grand here) but this was all akin to a trip to the casino for me and my expectations were set accordingly.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#277

Post by Melting_Harps » Mon, Nov 28, 2022, 6:55 PM UTC

zubairq wrote: post #261

woah wrote: post #250

Another "crypto" company that was not actually crypto. These guys just held people's money custodially and promised some dumb overblown interest rate. Sure their theme was "crypto" and they have the bitcoin logo on their website, but the underlying mechanism of trusting someone who has a slick app with your money is the opposite of crypto. It seems like silicon valley VCs completely missed the boat on crypto by dumpi…

I agree, none of these companies are crypto companies, just centralised scams. In fact, this is not the end of crypto, but is exactly the opposite. This is the "real beginning" of crypto, as now the benefit of decentralisation and transparency are being understood by a larger number of people. So all in all, this is great news for the crypto industry!

> I agree, none of these companies are crypto companies, just centralised scams. In fact, this is not the end of crypto, but is exactly the opposite. This is the "real beginning" of crypto, as now the benefit of decentralisation and transparency are being understood by a larger number of people. So all in all, this is great news for the crypto industry!

While I share your enthusiasm, even after countless rugpulls/exitscams/fraud proving centraization is the bane of why this tech was created; I don't share your conclusion as it doesn't reflect reality at all. The 'crypto' market is rife with this and has been sine the Ico mania (and alt boom before that really) so things like NFTs and DeFi are at it's core rely possible of this ignorance which is what most profit from and do so to the detriment to actual viable projects: Bitoin, Monero.

In short, all I'm seeing is a price correction, but real projects keep building muh needed infrastructure and 95% of the 'crypto Industry' are the hype tokens exchanges like FTX, Binance fleece the masses with with promises of short lived DeFi yield farming like scams.

> It seems like silicon valley VCs completely missed the boat on crypto by dumping money on any huckster with a Stanford degree. Instead of asking "is this the end of crypto", maybe we should ask "is this the end of silicon valley".

Agreed, we have been persona non grata in SV for some time; in 2014 I went to the bitcoin job fair in Sunnyvale when I was launching my startup and despite having Standford heavy weights and Vc (like Balaji, Chamath, Dorsey and later Musk) soon realized just how poorly we were received outside of our circles; we represented the uncouth gate-crashers who were supposed to be kept at arm's distance, and only when fortunes were made only then would they even listen to us and even then they hose their own ilk who turn out to be the biggest scammers of all and then blamed us for their failures.

There is still time for a correction, but there is a reason as a Californian with a CSU STEM degree and wit family/roots in SV area I went to Boulder instead and never regretted it.

With that said SBF went to MIT, and his parents are Stanford professors, it was his GF who headed Alameda that is a Stanford grad.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#278

Post by ceejayoz » Mon, Nov 28, 2022, 6:56 PM UTC

woah wrote: post #257

sdiacom wrote: post #6

Earlier quoted context omitted.

Sure, but you can't use DeFi to trade fiat for crypto. You can use DeFi to trade crypto for crypto, or for crypto that pretends to be fiat. Saying "centralised exchanges bad, DeFi good" misses the point that the main use case of centralised exchanges is not covered by DeFi.

You can, using stablecoins like USDC. These also involve counterparty risk, but they are extremely simple to audit and regulate.

> they are extremely simple to audit

Tether's audit has been promised since 2016. Still hasn't happened yet.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#279

Post by throwaway_4ever » Mon, Nov 28, 2022, 6:57 PM UTC

christiangenco wrote: post #235

My wife and I had about 10% of our life savings in BlockFi. This is a pretty big blow for us, especially while gearing up to start a family. It's easily in the top 5 worst things to happen to me in my life. Is there any hope of individual creditors getting any of their money back? I'm unfamiliar with how bankruptcy works.

Let this serve as a reminder to always stick with investments in $VTI and $BND in the future. It'll be a positive.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#280

Post by notch656a » Mon, Nov 28, 2022, 6:57 PM UTC

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.

... and assuming that is successful: something else emerges.

The emergence of crypto coincided with the final snuffing of bearer bonds and certificates and most anonymous bank accounts. The death of crypto will coincide with something else. The regulators of the world continue to pick and choose where to place their fingers in the cracks of the dam. Money that cannot efficiently or legally pass through KYC/AML will find a way.