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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

#401

Post by nostrademons »

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…

1) has several layers of middlemen that all take cuts along with 2) and 3). Typical LPs for VC funds are often institutional investors like university endowments and pension funds, or they are hedge funds that are themselves funded by university endowments and pension funds. So when #5 happens, the loser is oftentimes not an individual rich person (though family offices participate in this ecosystem as well), but a collection of not-very-rich people that have entrusted their money to a professional money manager.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#402

Post by lottin »

Eisenstein wrote: post #393
lottin wrote: post #374

Earlier quoted context omitted.

Sorry. We were talking about what it means for an "actor" to be "decentralised". Now you're saying that a central bank is someone who has a monopoly on issuing their own currency. So apparently I'm a central bank, you're a central bank, the Chinese restaurant around the corner is a central bank... First of all, none of these people or organisations are central banks. And second, we weren't talking about central banks…

This is one of those 'can't win' situations because no matter how I respond you will find something to pick apart and keep decrying your victory. Good day.

You could give simple, logical, concrete definition of 'decentralised actor' and show the concept isn't gibberish. If you can't come up with anything, maybe you have to concede that it is gibberish.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#403

Post by rnk »

bpiche wrote: post #266
zubairq wrote: post #261

Earlier quoted context omitted.

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!

A real "this is good for bitcoin" in the wild!

Come on, zubairq must be kidding. This is not good for crypto or bitcoin. What problem were we fixing again with crypto?

Re: BlockFi files for bankruptcy as FTX fallout spreads

#404

Post by MrMan »

Terretta wrote: post #188
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.

> Unbelievable the amount of destruction of value here... it's just total carnage. I don't see any other replies hypothesizing this in terms that rhyme with the dot com "bust" of 2000. In late 90s, in addition to whatever product-market-fit from their "blue ocean strategies", the dot coms generally invested in and bought services from each other. Wall St didn't look at where the dollars came from or went to the secon…

this has more in common with the S&L crisis than the .com crash. if you are going to use analogies to past events as a crutch

Re: BlockFi files for bankruptcy as FTX fallout spreads

#405

Post by nostrademons »

herval wrote: post #105
fdgsdfogijq wrote: post #91

Earlier quoted context omitted.

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

I've seen a couple startups with ~10 people and no market fit paying $500k/y to hire a FAANG VP. That's even more damaging than a fresh grad kid managing 50 people!

Getting the FAANG VP is usually critical to landing the next round of funding. If sending $500K/year [1] out the door brings in $50M for your next round of funding, it's well worth it. Particularly if you recognize that your enterprise is a Ponzi scheme [2] and that getting that next round of investors is how everyone gets paid.

[1] seems ridiculously low BTW, that's a line manager or extremely skilled software engineer at a FAANG, VPs make multiple millions per year.

[2] and anyone running a crypto startup should.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#406

Post by MrMan »

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).

I am up YTD and YOY

Re: BlockFi files for bankruptcy as FTX fallout spreads

#407

Post by rnk »

dfadsadsf wrote: post #48
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.

if anything collapse of Luna, FTX and BlockFI showed that regulations are not urgent or really needed. Regulations in finance are needed when collapse threaten real economy or regular people (similar to contagion from housing market or Bear Stearns in 2008 financial crisis). With FTX collapsing with zero repercussion on broader economy, why regulate it? If people want to play casino, let them play casino. Right now c…

Regs are needed because people didn't know it was a casino. Look at the poor guy in this discussion who lost 10% of his wealth here. He was surprised at the outcome.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#408

Post by GartzenDeHaes »

eastbound wrote: post #376
fdgsdfogijq wrote: post #313

Earlier quoted context omitted.

This seems to be largely what is going on. I think also, there are a few startup ideas considered to be "the future", and VCs are basically just choosing which horse they will bet on for that idea. So they pick through different founders chasing that market, and invest. Then all the other VCs pile in on those chosen horses, regardless of the due diligence. As a naive and younger outsider I always thought these people…

> I think also, there are a few startup ideas considered to be "the future" This. I’m getting annoyed with my jQuery/Spring app with ~million of revenue that I can’t get sexy for employees nor for funding; sometimes I want to throw away ethics and say we’re building “a blockchain of solar-powered AI european-central-bank ledgers”. It would be so much easier. Nah, we’re just storied field data in 7 tables, and custome…

You're almost there. Make it a "blockchain powered 3D PRINTED solar AI bank ledger" and you'll be funded in no time.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#409

Post by tootie »

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.

Stablecoins are cryptofiat. There's no compelling reason to use a stablecoin over using USD.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#410

Post by rnk »

suzzer99 wrote: post #186
Yhippa wrote: post #22

Is Coinbase safe?

A buddy of mine had his phone SIM-hacked and his coinbase account drained. He was on the phone with coinbase trying to stop it while it was happening, and said they were beyond useless. Criminals have lists of everyone with crypto on coinbase. They're cross-referencing this list with people with T-Mobile (usually), then pulling off SIM-hacks by buying off a store manager, or just grabbing the manager's laptop and run…

That sounds like fud to me. Coinbase decided my account was left for dead, and contacted my state. It tooks several weeks of back and forth with coinbase, including multiple phone calls with support and sending pics of my id, etc before they let me access my account. I had my password etc, same phone. They wouldn't let me get my money out.
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