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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

#291

Post by herval »

btown wrote: post #224
herval wrote: post #78

Earlier quoted context omitted.

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 probabilit…

> I once heard that a well-known gig economy company would open up new cities by giving employees essentially-unlimited credit cards

That's pretty documented in the history of Uber :-)

Re: BlockFi files for bankruptcy as FTX fallout spreads

#292

Post by d3nj4l »

Yizahi wrote: post #139
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.

Where do you start? You start with company that builds a lemonade stand, and they dress it up like a life changing lemonade that's going to replace all other drinks in 38 days or whatever. So let's ignore what it does, let's pretent is does literally nothing, it's just a stand. So what's next. This lemonade stand has some market price, it's probably not zero, right? Let's say it's 20 million dollars market price. May…

I wonder what it says about me that I instanty recognized what this is referring to

For the uninitiated: https://www.bloomberg.com/news/articles/2022-04-25/sam-bankm...

Re: BlockFi files for bankruptcy as FTX fallout spreads

#293

Post by andirk »

mousetree wrote: post #68
stjohnswarts wrote: post #28

Earlier quoted context omitted.

Was it really value or imagined value though?

Real dollars were invested (by their investors and customers)

These comments lead me to believe that a lot of people don't realize fiat was invested by regular people. It wasn't all crypto bros playing with space cash. If that fact isn't understood, then it's pretty clear many of our HN friends are simply here to bash on crypto and scoff at victims of a poorly managed investment firm. I personally haven't seen the same takes on, say, Theran*s or whatever other failed VC-backed investment.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#294

Post by twiddling »

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?

There is a lot of literature on how much pension funds are chasing exotic and high-risk investments due to the unexpected longevity of pensioners and persistence, until recently, of low interest rates

example: https://reason.org/commentary/with-interest-rates-low-us-pen...

Re: BlockFi files for bankruptcy as FTX fallout spreads

#295

Post by babypuncher »

twiddling wrote: post #287
aww_dang wrote: post #226

Earlier quoted context omitted.

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-ma…

Hmm. all the same source, as if there is an agenda...

And that source is Ron Paul's think tank

Re: BlockFi files for bankruptcy as FTX fallout spreads

#296

Post by Mistletoe »

hardwaregeek wrote: post #175
Mistletoe wrote: post #97

Earlier quoted context omitted.

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…

Huh what? Do you assume that code just works? Something's always breaking and there's always new features that people want. Editing tweets just barely became a thing. Which, btw, is the exact sort of feature that would be easy peg as trivial, but likely is not when you're running at Twitter scale. Before, a tweet had two states: created or deleted. Now it can have arbitrarily many states and possibly even interleaved…

I’m sorry I just don’t find the ability to edit tweets a groundbreaking new feature that is difficult to implement in 2022.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#297

Post by halpmeh »

lottin wrote: post #288
halpmeh wrote: post #111

Earlier quoted context omitted.

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

Money and capital are different things. Capital in a broad sense is any durable good that is employed in the production of goods and services. For example, a road. Money is not capital. Money is simply a good without intrinsic value that is used as a means of exchange. As a result creating and destroying money doesn't create or destroy wealth.

You are using a very non-standard definition of capital.

> As a result creating and destroying money doesn't create or destroy wealth.

I'll give you a MacBook, which is a durable good you can use to produce goods and services, if you go to the bank, withdraw all of your money, and then set it on fire. This is a good deal for you. Your wealth will not change from setting the money on fire, as destroying money does not destroy wealth, and you will have a capital good that will increase the amount of wealth you have.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#298

Post by Eisenstein »

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…

Your original response was an insinuation that banking systems in general are based on fraud, and that gold should be the basis of monetary value. In fact, the case has been proven that gold is a poor basis of monetary value and that banking systems, when properly regulated, are not fraudulent, or are very rarely fraudulent.

The reply to that was to explain that regulation was the key to maintaining a stable banking system.

You then ignore all that an conflate unregulated banking and regulated banking as equal.

I hope you understand that this makes your argument dishonest, and that you attempt to avoid this in the future.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#299

Post by doliveira »

traveler01 wrote: post #25
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.

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.

It's because of these "idiots" choosing to centralize their decentralized crypto, not due to the smart ones holding on to their keys, that the valuation has skyrocketed.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#300

Post by erehweb »

solotronics wrote: post #47

Bitcoiners have been saying this whole time not to keep your crypto with a 3rd party and this is exactly why. Satoshis original message about Bitcoin mentions explicitly you don't need any trusted third party. A whole lot of people think they can make money outsmarting the original concepts of Bitcoin and they get scammed in new ways each cycle. https://nakamotoinstitute.org/trusted-third-parties/

How, practically does this work? Is it a password that you remember? What happens if you forget, or lose the piece of paper or hard drive it's written on? Do you end up like the guy trying to dig through landfill? (https://www.thecitizen.co.tz/tanzania/news/business/the-sear...) Or is the answer, "don't forget"? This doesn't work for most people.
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