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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

#331

Post by aswanson »

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…

That is hilarious on every level.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#332

Post by sebastian_z »

itake wrote: post #326
sebastian_z wrote: post #283

I was a BlockFi customer. I always had the sense that they wanted to do the right thing. They hired people with risk experience in traditional banking, had real customer support, engaged with regulators to get their interest rate product certified, etc. It is really a bit sad that they got entangled into the FTX situation. (I should also say that I withdrew my funds earlier. Otherwise, I may feel differently.)

It always felt like a facade to me. When 3AC collapsed and they were fined, they didn't really disclose how they 'solved' their liquidity problem. Taking a loan out just kicks the can down the road. They also were handed an amazing deal that no one else was offering without taking a second to wonder why?

I assumed they received the deal because they were legit. :) But yes, agreed, hard to tell from the outside. We will learn more in the bankruptcy proceedings.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#333

Post by alasdair_ »

hsavit1 wrote: post #147
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…

Only 1 of the BlockFi founders (Flori) has an ivy league degree (from Cornell). Zac is a moron who made his wealth playing poker and through a scam loans startup (Zibby).

>Only 1 of the BlockFi founders (Flori) has an ivy league degree (from Cornell). Zac is a moron who made his wealth playing poker and through a scam loans startup (Zibby).

It's much, much harder to make millions at the poker table than it is to get a degree from an Ivy.

There have been 141 people that have made over a million in 2022 from poker (https://pokerdb.thehendonmob.com/ranking/7339/2) and that doesn't count all of their losses, staking, etc.

The eight Ivies collectively graduate roughly 75,000 people a year.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#334

Post by eternalban »

mring33621 wrote: post #305
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…

Here is the model, as I currently understand it: 1) some people are rich and want to get richer 2) Ivy educated VCs invest money for group (1) in start-up companies, while paying themselves handsomely with that same pool of money 3) Ivy educated kids start companies using money from group (2), while paying themselves handsomely with that same pool of money 4) sometimes, through a combo of hard work, skill and luck, t…

Wait. What happened to all the middle class chumps who got tempted by "influencers" and reassured by rich people saying "I'm in!" in your model?

This model of yours suggests that rich people played with fire and rich people got burned.

Is that what is happening? That doesn't seem to be a complete model.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#335

Post by webinvest »

paulgb wrote: post #2

> At the start of the year, there were three big North American retail crypto lenders. Now all three are bankrupt. https://twitter.com/kadhim/status/1597250428378705921

I haven’t ever seen a crypto lender stay solvent.

Unless:

A) The money never leaves the platform such as with collateralized margin lending for shorting / leveraging.

B) The money is collateralized such as on DeFi with AAVE.

BTCJam gave small, well-diversified loans based on credit scores, reputations, business ideas, and identity verifications. They iterated and tried almost everything but they couldn’t get enough money that left the platform to ever return to the platform.

Scamming the banks seemed to be way more profitable and lucrative than using borrowed money for economic activities more productive than the borrowed interest costs.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#336

Post by sjsdaiuasgdia »

SilasX wrote: post #274
sjsdaiuasgdia wrote: post #263

Earlier quoted context omitted.

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!

>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.

Let's look at the comment you were replying to:

>If you view Twitter as a 'service for posting 140 characters', they don't need 7000 employees.

>If you view it as a 'service for supporting five billion dollars worth of ad spend across the entire world', with all the proprietary software, ads front-ends, ads back-ends and reporting services, weird one-off partner integrations, ads account management, sales, advertiser support, moderation and compliance, legal compliance... Well, all that quickly adds up to a lot of headcount.

You characterize this comment as justifying ~7000 as a reasonable figure "for what Twitter's app needs to do." The comment makes an important distinction between what you might need to run the most essential aspects of a thing that allows Twitter-like social media interactions to occur versus an enterprise that leverages those social media interactions as one part of a larger system. It says outright that you wouldn't likely need 7k just for the essential "let people make tweets" aspect.

TBH you appear to be the one with comprehension issues in this thread.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#337

Post by vkou »

SilasX wrote: post #267
jasonlotito wrote: post #185

Earlier quoted context omitted.

Moderation, customer support, sales, and then everyone to support all those people. You don't think that matters, but it has a real impact on your bottom line. Companies are stopping advertising now, not because Musk took over, but because they can't support for advertising (probably because they were sacked). It was one of the worlds largest social media platforms! Couple that with the reality that Twitter needs at…

> You don't think that matters, I didn’t express an opinion on that, and actually believe the opposite of what you just hastily attributed to me. My point is that, when gauging whether 7000 is a reasonable figure, it’s not enough to vomit a laundry list of work that the company needs to do — because that kind of argument would apply equally well to justifying 3500, 7000, 14000, or a million. To justify a specific fig…

The parent poster, as an outsider, only makes informed, but speculative guesses about Twitter's business footprint, as does ~anyone who does not have T9 vision of the firm.

I am not going to tell you that their right size is 3500, or 1500, or 7000, or 14000, because I don't know what it is. But I will say that it's very likely to be measured in the thousands. [1]

[1] Although you can always try to shrink the business... A Twitter that doesn't work, and has no revenue could probably be ran by ~0 employees.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#338

Post by adam_arthur »

notch656a wrote: post #289
woah wrote: post #253

Earlier quoted context omitted.

Can I ask why? If you wanted to put money into crypto, why didn't you use a blockchain where you could verify your holdings and nobody could take them from you? BlockFi was just an incredibly shitty bank.

Even with 10% losses he lost less than those storing equity in ultra boring indexes. Honestly anybody who only lost 10% in the last year looks like a genius (crypto included).

100% loss > 25% equity drawdown

Obviously you know that, just somewhat of a silly observation to make that he "lost less" when he actually lost 100% of his investment (barring recovery in bankruptcy court)

Re: BlockFi files for bankruptcy as FTX fallout spreads

#339

Post by varunprasad »

alasdair_ wrote: post #333
hsavit1 wrote: post #147

Earlier quoted context omitted.

Only 1 of the BlockFi founders (Flori) has an ivy league degree (from Cornell). Zac is a moron who made his wealth playing poker and through a scam loans startup (Zibby).

>Only 1 of the BlockFi founders (Flori) has an ivy league degree (from Cornell). Zac is a moron who made his wealth playing poker and through a scam loans startup (Zibby). It's much, much harder to make millions at the poker table than it is to get a degree from an Ivy. There have been 141 people that have made over a million in 2022 from poker ( https://pokerdb.thehendonmob.com/ranking/7339/2 ) and that doesn't coun…

It's also much harder to make millions from the lottery than it is to get a degree from an Ivy. There might be a few hundred winning the lottery every year.

So I'm not really sure what information the statistic that there are about 140 Poker millionaires in a year vs 75k Ivy grads conveys.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#340

Post by adgjlsfhk1 »

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…

The key problem is that crypto only has value in the absence of a regulatory authority. If users have a 3rd party they both trust (the government), all of the waste in crypto is unnecessary. However, it turns out for crypto to be used, it has to be centralized. Without centralization, it's too complicated for the masses.
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