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

Re: BlockFi files for bankruptcy as FTX fallout spreads

#381

Post by CyberDildonics » Mon, Nov 28, 2022, 9:17 PM UTC

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…

Talk to any business and they will tell you that they don't want to pay %3 to visa or any other credit card. Having a ledger of transactions is how any currency works, it isn't the problem being solved.

Being able to use money electronically without a 3rd party is something that wasn't possible before. Anyone wanting to cut a credit card out of their deal or choose a currency other than their what their country mandates can now do that.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#382

Post by LatteLazy » Mon, Nov 28, 2022, 9:17 PM UTC

I have never seen such a strong argument for an end to limited liability before. Dozens of investors funded and enabled FTXs fraud. Their level of incompetence, both to their own investors and to the public in general is astounding. Now they fraud they enabled and cheered on is destroying other peoples savings and businesses.

They asked for some basic info on FTXs internal controls and were told to piss off. They asked for some oversight power and we're refused. Then they choose to invest anyway and help this fraud grow. To me, this is like reloading the gun of an armed robber during the robbery.

"He seemed like a nice guy" isn't going to cut it here morally even if they're legally in the clear.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#383

Post by lottin » Mon, Nov 28, 2022, 9:17 PM UTC

halpmeh wrote: post #364

lottin wrote: post #322

Earlier quoted context omitted.

If you set your own money on fire, the amount of wealth in the economy won't change. However you'll be worse off, because your share of the total wealth is now smaller (and everybody else's share is bigger).

> However you'll be worse off, because your share of the total wealth is now smaller So you're worse off because your share of the wealth is smaller... if only we had a way to describe that. Perhaps you could say that you're less wealthy and by burning your money, you've destroyed your capital? Look, I get what you're trying to say. The value of each currency unit is roughly the total amount of economic value divided…

Destroying money doesn't destroy capital. It doesn't matter who created it. Money is not capital. You're mistaking a claim on a good for the good itself. These are completely different things.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#384

Post by AlexandrB » Mon, Nov 28, 2022, 9:19 PM UTC

HashBasher wrote: post #231

postalrat wrote: post #20

Earlier quoted context omitted.

Then the end game would be to be something useful that people use in their daily lives. I think that's what was meant when calling it digital currency. But now it's heading down a different path.

Having a savings account is not useful in daily life?

A savings account is generally a no-risk or low-risk investment vehicle. This usually means that you could withdraw the balance on any given day and not suffer a realized loss. Even if you assume that Bitcoin's value will always recover long-term, having short term volatility in the 50% range might mean that the money in a Bitcoin "savings account" will not be available when you actually need it.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#385

Post by halpmeh » Mon, Nov 28, 2022, 9:22 PM UTC

lottin wrote: post #383

halpmeh wrote: post #364

Earlier quoted context omitted.

> However you'll be worse off, because your share of the total wealth is now smaller So you're worse off because your share of the wealth is smaller... if only we had a way to describe that. Perhaps you could say that you're less wealthy and by burning your money, you've destroyed your capital? Look, I get what you're trying to say. The value of each currency unit is roughly the total amount of economic value divided…

Destroying money doesn't destroy capital. It doesn't matter who created it. Money is not capital. You're mistaking a claim on a good for the good itself. These are completely different things.

Again, you're using a totally non-standard definition of capital. Google "capital definition"

> wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing.

So yes, if you redefine the word capital to fit whatever you like, then sure, I agree with you.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#386

Post by WeylandYutani » Mon, Nov 28, 2022, 9:25 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…

Crypto just seems like a lesson someone made up to teach kids why the world works the way it does.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#387

Post by pgwhalen » Mon, Nov 28, 2022, 9:27 PM UTC

anonymousab wrote: post #46

nscalf wrote: post #9

For what it's worth, all reasonable people in the crypto space want regulation to make sure these types of poor lending practices don't continue. Regulators have been slow and ineffective when it comes to crypto, which has lent itself to the crypto v SEC narrative, but all the adults in the room known there is a need for some regulation.

The biggest "adult in the room" by far, whom was pushing for regulation, turned out to be another scammer that was simply trying to regulate away his competitors and enshrine his own fraudulent crypto scheme as the only sanctioned one. The crypto community's truest Scotsman proved to be just as terrible as everyone outside perceives the crypto space to be. Benefit of the doubt simply can't be given for what "reasonab…

I completely understand the view that crypto should no longer be given the benefit of the doubt and subscribe to it myself, but I think that even without the benefit of hindsight from the FTX implosion, Coinbase is clearly the adult in the room in crypto, and has been for some time.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#388

Post by AlexandrB » Mon, Nov 28, 2022, 9:27 PM UTC

NotYourLawyer wrote: post #123

Auracle wrote: post #43

Earlier quoted context omitted.

As far as I know only interest you can earn on Coinbase is from staking coins - and Coinbase actually takes a portion of that profit for themselves. I remember looking at all of these now defunct businesses wondering just how they could have such high interest rates on your coins. In what should be a surprise to no one it was too good to be true.

If someone offers a risk-free return way above the prevailing risk-free interest rate… there are some risks that aren’t being disclosed. Everybody forgot that for a little while.

"This Time It's Different"

Re: BlockFi files for bankruptcy as FTX fallout spreads

#389

Post by rnk » Mon, Nov 28, 2022, 9:28 PM UTC

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.

Crypto has shown that decentralized actors certainly screw you over. All those laws and corporate governance and backup from the govt for banks (which costs something in terms of fees the banks pay) yields people not losing their deposits if banks fail. Occasionally banks still fail today! It doesn't make the news because people don't lose their money.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#390

Post by CyberDildonics » Mon, Nov 28, 2022, 9:30 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…

eventually reaching the point where there is only one or two real nodes hosted in a cloud provider datacenter somewhere

Ironically this is what is described in the original bitcoin satoshi whitepaper (not 'one or two' obviously), but the math doesn't work out.

Right now bitcoin has a throughput of about 1 KB/s, which is slower than a 14.4 dialup modem. The entire 13 year chain fits on a $40 thumb drive with room to spare. Even 32MB blocks (53 KB/s) maxed out for another 7 years would fit on single $220 12TB hard drive.

Running a node is only really necessary for miners, exchanges or any other major service but it will be trivial for anyone who can watch a youtube video or stream netflix for at least another decade.