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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

#101

Post by iskander »

Stranger43 wrote: post #95
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.

Essentially yes. Bitcoins scalability issue should have killed off al notions that it could ever gain widespread usage as an alternative to traditional currency for regular payments and after that it became yet another speculative derivative without any real backing in real world assets. It was never actually going to replace fiat currencies for most people and the industry is absolutely dominated by exotic financial…

On the other hand, people chasing the dream of crypto scalability have actually invented a remarkable amount of math and tooling around large scale proof construction, summarization and validation. The Zero Knowledge proof ecosystem (and its relatives in multi-party computation and fully homomorphic encryption) might be the only useful thing that is left after the current incarnation of crypto fully implodes.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#104

Post by rajup »

badpun wrote: post #33
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.

When designing the iPhone, one of Apple's findings was that majority of people struggle with understanding the concept of the file system (and hence, there's no visible file system in iOS). In such world, only a small minority of people will be interested in decentralized cryptocurrencies, as the bar of technical skills required is too high for most people. This is what led to the success of centralized cryptobanks.

This exactly. I recently came across a tweet explaining how Merkle trees in some new crypto would make it better or something. If with a CS degree I find it hard to understand what this remotely has to do with my money, I don't think my 80 year old granddad is going to fare any better. Which is why I believe crypto is fundamentally doomed for anything but the most niche use cases.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#105

Post by herval »

fdgsdfogijq wrote: post #91
herval wrote: post #78

Earlier quoted context omitted.

That's pretty much how a lot of "unicorns" felt in the past 2-3 years

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!

Re: BlockFi files for bankruptcy as FTX fallout spreads

#106

Post by beefield »

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.

> 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.

I'd be very keen to learn what kind of regulation, exactly, anyone is seriously proposing for these crypto products? Namely, the problem I see is that the products in the crypto lending space in my understanding simply can't exist in anything that has any resemblance of current financial regulations. To be honest, I am not sure how they can exist in any regulatory scheme that tries to penalize scamming people. Now, if the regulation said that it is okay to scam people in crypto industry, that might be interesting. But i am not sure if anyone has been proposing that.

Re: BlockFi files for bankruptcy as FTX fallout spreads

#108

Post by ignoramous »

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.

> ...you only depend on centralized actors if you want to.

How can one tell that with a straight-face when the poster-boys of crypto (like Coinbase, FTX, ConsenSys, Circle, Uniswap, Binance etc) depend on centralized actors like VCs and Stock Exchanges?

Re: BlockFi files for bankruptcy as FTX fallout spreads

#109

Post by [deleted] »

woodruffw wrote: post #94
itake wrote: post #83

Earlier quoted context omitted.

The real losses are the VC capital (that could have been deployed to more meaningful businesses) and the loss of client capital. Many people put their life savings that may or may not evaporate.

I think this is predicated on the assumption that VCs generally deploy their capital wisely, which I don't necessarily buy. Before cryptocurrencies, the rage seemed to be "Uber but for X." I'm not convinced there was much social or financial benefit in most of those, other than cynical value cycles culminating in offloading junk onto public markets.

[deleted]

Re: BlockFi files for bankruptcy as FTX fallout spreads

#110

Post by awhitby »

fdgsdfogijq wrote: post #91
herval wrote: post #78

Earlier quoted context omitted.

That's pretty much how a lot of "unicorns" felt in the past 2-3 years

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

It does if you consider self-selection: the competent person from big tech (i) can see a disaster a mile off (ii) has more to risk
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