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Bybit loses $1.5B in hack

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Re: Bybit loses $1.5B in hack

#251

Post by Saline9515 »

joshstrange wrote: post #201
ghhrjfkt4k wrote: post #183

Earlier quoted context omitted.

There is a law against gross negligence. Holding client money comes with other obligations too.

It’s not money though. It’s property at best. It doesn’t get held to the same standards. CryptoBros are all about “no laws, do whatever” right up until the, inevitable, point at which /they/ are getting swindled and then they want to cry foul and run to the authorities. It’s just like the whole DAO situation which showed “Crypto is immutable and we want to live and die by the code unless of course someone finds a fla…

Ethereum wasn't rolled back after TheDao hack, they simply forked. Also crypto is about uncensorable transactions, not lawlessness.

Re: Bybit loses $1.5B in hack

#252

Post by FabHK »

joshstrange wrote: post #206
cmcaleer wrote: post #186

Earlier quoted context omitted.

> what exactly is left to keep anyone a “huge believer”? I don't really engage in the ponzibucks part and don't touch exchanges except to on and off-ramp, and use crypto to pay for things like hosting, seedboxes, or other services I might not necessarily want my debit card directly attached to. I like sending vendors $100 and spending $0.00005 in transaction fees and knowing that they'll get $100 (or $99 with some 3r…

Your transfer fees are a bit off. Coinbase is 10,200x more than you stated ($0.51 to send $100) BUT that’s only if I send directly on Coinbase. Coinbase Commerce takes 1% so it would actually be 20,000x more than you listed. Stripe is 64% of what you stated ($3.20), and that’s with no processing fee discounts like you can get with higher volume. Now, obviously, $3.20 > $1 but it’s not apples to apples. You can claw b…

Credit card interchange fees being ridiculously high is pretty much a US thing:

> In the United States, the fee averages approximately 2% of transaction value. In the EU, interchange fees are capped to 0.3% of the transaction for credit cards and to 0.2% for debit cards, while there is no cap for corporate cards.

Sensible regulation can make a big difference.

FWIW, I can pay bills by initiating a transfer both in HK and the EU instantaneously and for free.

Note also in your comparison of costs that most people still use fiat, and then pay the enormous fees of exchanges like Coinbase or Bybit that (for retail investors) are ridiculously high. So, a fiat-crypto-transfer-crypto-fiat round trip has another 2% or so on top (plus volatility).

https://en.wikipedia.org/wiki/Interchange_fee

Re: Bybit loses $1.5B in hack

#253

Post by tonyhart7 »

skeeter2020 wrote: post #232
tonyhart7 wrote: post #219

Earlier quoted context omitted.

FEDS can print money while Binance does not

not exactly true - Binance is indeed "printing money", just with no centralized regulation. When the Feds do it the expectation is that they are aware of the long-term impacts of doing so, and include in their calculation. For crypto it's the opposite: do it before you erode trust & goodwill to the point where it's no longer valuable. I see it more like it is very different than printing money in a economy that's per…

I doubt they can because they peg it to USD, do you think they can pay aws bill with busd??? maybe you can but people with busd would convert it to usd at some point

Re: Bybit loses $1.5B in hack

#254

Post by malfist »

phony-account wrote: post #221
killerstorm wrote: post #214

Earlier quoted context omitted.

How it it different from what banks do? (Except for a central regulator.)

> How it it different from what banks do? I often read this sort of comment from crypto-defenders, but is it what banks do? I’m relatively naive about these things, but my impression is that a bank losing this proportion of their assets can’t just ‘pretend’ they have the money, or create ‘new’ money.

That's because they're mistaken. In traditional banking only the central authority can print money, not the individual banks.

If someone stole a trillion dollars from JP Morgan, JP Morgan can't make themselves whole by creating a new trillion dollars.

The central authority might guarantee the customers of JP Morgan that their money is protected, but they won't print money to make the bank whole.

Re: Bybit loses $1.5B in hack

#255

Post by jqpabc123 »

owlninja wrote: post #246
jqpabc123 wrote: post #222

Earlier quoted context omitted.

How it it different from what banks do? (Except for a central regulator.) Your exception is the answer. Only the central regulator can "mint" money and doing so has real world consequences. The central regulator has financial incentives to limit this sort of activity. The bizarro world of crypto has no such regulation and as a result, it is inherently unstable. The proof of this is right in front of you --- it is the…

I saw a quote somewhere: >Crypto is speedrunning the entire evolution of finance to end up at the same place

I saw a quote somewhere:

    Those who don't learn from history are doomed to repeat it.
The only thing new about crypto is paper has been replaced by electrons.

Individuals/banks minting their own money has been tried before. It didn't go well.

Re: Bybit loses $1.5B in hack

#256

Post by EVa5I7bHFq9mnYK »

plantain wrote: post #130

How on earth is it possible they can cover a 1.5B loss? Are they really sitting on that much profit, or is the goal to ponzi it out from here, MtGox style?

Yes, the profits are insane in that business. Binance was raided for a similar amount, and paid it out easily. Mtgox was raided for ₿650k ($60B in today's money), and plans to return ₿140k to traders. However, I believe most Mtgox investors are better off this way because they were forced to hold onto their investments; otherwise, they would have sold at around $1,000 or so.

Re: Bybit loses $1.5B in hack

#257

Post by lucianbr »

zer0x4d wrote: post #120
JTyQZSnP3cQGa8B wrote: post #115

Earlier quoted context omitted.

You like decentralized money without laws and accountability, but would like to have a central thing (TBD) that is accountable and respect laws? How would that work?

I'm not too sure but few things come to mind: 1. Upgrade protocol to include protections for well known cold wallets held by exchanges (ex: API call has to be made to the exchange's security endpoint to validate each transaction out of the wallet. Exchange staff would need to manually allowlist large transactions before they are transmitted). 2. Decentralized voting on reversal of transactions (90-95%+ vote needed to…

Good luck getting 90% of a large group of people to vote the sky is blue.

Re: Bybit loses $1.5B in hack

#258

Post by malfist »

xnickb wrote: post #207
reisse wrote: post #148

Earlier quoted context omitted.

Bybit trading volume is in tens billions of dollars daily. Their comission rate for the retail traders is up to 10bp (0.1%). Even considering a huge part of that volume is coming from institutional players who enjoy significantly reduced commission rates, I think they're surely making few million dollars daily on comissions alone, maybe tens of millions in a good day. And besides comissions, they also have other sour…

I'm nowhere near expert on any of the things below, but: My gut tells me if an exchange makes as much money as you suggest, people involved in that exchange are making even more profit from the said exchange, otherwise they wouldn't engage. The whole thing being literally money out of thin air, it feels like a huge bubble that should inevitably burst bringing down _ a lot _ of collaterals with it.

You might be interested in reading Warren Buffett's reasoning for not investing in crypto. Basically he says crypto produces no goods, products or services, and it's only value comes from finding a "bigger fool" to pay a higher price than you did for it.

It's value is from speculation assuming future speculation will assume more future speculation

Re: Bybit loses $1.5B in hack

#259

Post by FabHK »

Saline9515 wrote: post #248
plantain wrote: post #130

How on earth is it possible they can cover a 1.5B loss? Are they really sitting on that much profit, or is the goal to ponzi it out from here, MtGox style?

Bybit is one of the most used crypto exchanges and does >100M$ of revenue per month, growing fast. If this isn't enough, I'm sure that every crypto VC would line up to buy a single digit % of their equity to cover up the hole. Crypto hosts the most profitable businesses in the world.

> Crypto hosts the most profitable businesses in the world.

Well, because the retail clients expect to get rich and don't mind paying 1% or so fees per exchange.

Similarly, the BTC future basis (the difference between the spot price and future price) on many exchanges around 10 to 5 years ago was easily 80% p.a. which you could realize by buying Bitcoin and selling the future. What happened there is that people going long Bitcoin with leverage essentially borrowed the money giving them that leverage at usurious rates (this implied rate is not usually displayed and thus invisible to your average retail client, but definitely very visible to the finance professionals moonlighting in crypto (such as Jane Street, Jump trading, and many others)).

Crypto use case: ripping off retail.

Re: Bybit loses $1.5B in hack

#260

Post by FabHK »

alberth wrote: post #212
xnickb wrote: post #207

Earlier quoted context omitted.

I'm nowhere near expert on any of the things below, but: My gut tells me if an exchange makes as much money as you suggest, people involved in that exchange are making even more profit from the said exchange, otherwise they wouldn't engage. The whole thing being literally money out of thin air, it feels like a huge bubble that should inevitably burst bringing down _ a lot _ of collaterals with it.

Coinbase charges 100bps (1%) between trader & maker fee. Just last quarter , Coinbase had: Revenue: $2.2B Net Income: $1.3B https://help.coinbase.com/en/exchange/trading-and-funding/ex... https://s27.q4cdn.com/397450999/files/doc_financials/2024/q4...

Note that Coinbase (like most exchanges) charges retail clients outrageously high fees (orders of magnitude more than you would pay at a competitive FX or equity broker), but institutional and whales that trade a lot very small fees.

Yet another way crypto moves money from poor suckers to insiders.

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