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Ftx.com Has Probably Collapsed

forum.effectivealtruism.org

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Re: Ftx.com Has Probably Collapsed

#171

Post by ipsum2 »

FTX was obviously a ponzi scheme, as described half a year ago here: https://www.bloomberg.com/news/articles/2022-04-25/sam-bankm... by a very well-respected financial columnist (Matt Levine)

> I think of myself as like a fairly cynical person. And that was so much more cynical than how I would've described farming. You're just like, well, I'm in the Ponzi business and it's pretty good.

If effective altruists with their superior analytical abilities can't figure out that the money they're getting is fraudulent, how do you expect them to make rational decisions on what charities are most effective?

Re: Ftx.com Has Probably Collapsed

#172

Post by maxbond »

ETH_start wrote: post #164
maxbond wrote: post #124

Earlier quoted context omitted.

It is utter hubris to put the lives of fictional future people, mere characters in a story you've invented, over the lives of real people alive today. It can justify virtually any action. The future is unknowable, so we can spin a new yarn every time we want to justify a new ethical compromise.

In principle, a greater number of future lives matter more than a lesser number of present lives. The principle itself seems sound to me. The problem is you can't actually be certain those future lives will come to exist. One assuming they will, and being so confident in their assumption that they deprioritize the lives of the currently living based on it, is hubris, but only because it over-estimates one's powers of…

If we agree the principle can't be applied - why would we consider it sound? That's like saying the principle behind 1 + 1 = 3 is sound, with the small caveat that you get the wrong answers. If something looks good on paper and turns sour when we try to use it, that's the indication that we've miscalculated.

Another perspective to consider; the best way to help people in the future is to help people today. Solving the challenges of our time is an investment that will compound into the distant future. Speculating on what life could be like in a hundred or a thousand years, and tailoring your efforts to that imagined future, is much like creating a product without a customer in mind. If you end up with something useful, it's almost certainly on accident and not because your speculation was accurate.

Re: Ftx.com Has Probably Collapsed

#173

Post by eru »

adam_arthur wrote: post #168
eru wrote: post #160

Earlier quoted context omitted.

> Fortunately for investors in public companies, you can mostly sort out the crazy people ahead of time > By inspecting the growth mechanism of the company. Amount of leverage, yield on investments relative to risks, assumptions about future growth, management commentary etc. Why waste your time like that? Just buy an index fund. > Unfortunately for investors in FTX, they had no visibility or regulations/protections…

Index funds are only as good as their constituents. Why buy index funds that hold many overvalued companies, like Chipotle at 50x PE (2% yield), or Costco at 40x (2.5% yield) when 10y at 4%. To name just a few of many Also certain sectors and companies will do better than others in this macro environment. Would rather buy things that are fairly valued. But to each their own

I believe in a weak form of the efficient market hypothesis that says by the time I have heard of any news, Goldman Sachs and the hedge funds will have already traded on them.

Since hedge funds are allowed to short, that includes any estimates I could make about things being overvalued.

All the news are priced in by the time they reach me.

> Also certain sectors and companies will do better than others in this macro environment.

Definitely, but that's already priced in as far as I can tell.

However, you might be more confident in your ability to spot undervalue and overvalued companies than I am.

I do agree with you that less liquid markets, like private companies etc, are less likely to be efficient.

Re: Ftx.com Has Probably Collapsed

#174

Post by AccountAccount1 »

AccountAccount1 wrote: post #10

SBF was a very positive force for EA, now that he's down everyone piles on him? shameless

To clarify the comment (and this being contingent on every user of FTX getting his money back which it appears it's going to be so) SBF was playing 5 billion dollar hands of poker because he was winning with lower dollar value hands than that, problem is that he kept raising the stakes until he went bust.

I doubt any exchange/bank could save themselves by facing the extremely bulky and fast withdrawals in the span of hours that FTX was facing; the only play there was to save face while avoiding locking withdrawals as much as possible e.g. the binance play (obviously horrid but it did buy some time.)

Besides that, the net worth of SBF and Alameda being denominated in FTT and using customer funds (unproven as of now) to make more gambles is obviously terrible, and here everyone is to free to shit on him all they want, but the point is, the EA community shitting on him? Having Sam donated more than a hundred milli to various orgs? mind you that he still is a good poker player, likely to come back, and cover all users funds.

Re: Ftx.com Has Probably Collapsed

#175

Post by AccountAccount1 »

returnInfinity wrote: post #42
AccountAccount1 wrote: post #10

SBF was a very positive force for EA, now that he's down everyone piles on him? shameless

What was SBF upto? Regulatory capture? this is going to make nice Netflix drama. Probably played high stakes poker and lost.

it's not over yet

Re: Ftx.com Has Probably Collapsed

#176

Post by tasuki »

dav43 wrote: post #84
adam_arthur wrote: post #21

Earlier quoted context omitted.

Well, it has no intrinsic value, so it's all psychological on the basis of what numbers sound low or high. Sounds like my kind of asset

Ditto. Just because people call it "an asset" doesn't make it one. It's not an asset. It's no more than a Ponzi scheme, just a complicated one at that.

Why is bitcoin not an asset?

Re: Ftx.com Has Probably Collapsed

#177

Post by tasuki »

marticode wrote: post #111
CallMeJim wrote: post #69

Earlier quoted context omitted.

It is an asset, unless you consider gold etc. to not be assets either?

Gold has industrial uses without even talking about jewelry. Even if everyone stopped valuing gold as a form of currency, it would still has some intrinsic value.

What would that value be though? 20% of its current value? Would you then say that gold was only 20% asset and 80% ponzi?

Re: Ftx.com Has Probably Collapsed

#178

Post by piva00 »

canoebuilder wrote: post #136
ww520 wrote: post #97

The collapse of FTX will impact the whole crypto space negatively. Nothing is spared. 1. All the alt-coins in FTX/Alameda Reasearch holding will be liquidated. E.g. Solana has been down >40% already. 2. The value of the FTT tokens issued by FTX valued at billions has evaporated. The value of FTT were used to buy other coins, directly and indirectly inflated all of them, including Bitcoin and Ethereum. When the value…

Having watched the MtGox, Mark Karpeles, Willy Bot saga, and then see that same pattern repeat over and over really is almost surreal. What’s funny, in a tragic kind of way, is that initial market manipulation from Karpeles is what drove the initial wave of VC interest who thought they were seeing an indication of genuine widespread demand. And then they couldn’t be left holding the bag and it just snowballed where w…

Same for me, and it's the whole pattern, down to the same talking points being shared by people in cryptocurrency forums. There's a level of hope and coping with cryptocurrencies that is hard to see outside of gambling addiction.

Re: Ftx.com Has Probably Collapsed

#179

Post by piva00 »

artdigital wrote: post #141
inquirer39243 wrote: post #95

Earlier quoted context omitted.

It's not that many of us long-time crypto users want people to suffer, it's the jaded "I told you so" moment. Many of us have seen many "too big to fail" exchanges fall, have seen 2+ other "crypto bubbles" drop the price by 80%+. When we told everyone "don't keep your money on an exchange" and "we've seen seen these 'too the moon' skyrocketing prices before - be prepared for the eventual crash" - they laughed and con…

To be fair, ftx as an exchange had none of that Degen culture. They didn’t even have an Earn product with high yield. You could loan out your crypto, but the rate fully depends on how many people want to actually borrow it. The FTT token itself was only used on the exchange to get some benefits like lower fees or free withdrawals and didn’t give any yield at all when staked. From a risk averse user perspective and so…

The shady thing in the whole cryptocurrency scheme is the lack of total transparency, aka: lack of regulations.

Without regulations there's absolutely no incentive for them to be transparent, there are tons of perverse incentives to hide and cook the books though.

Re: Ftx.com Has Probably Collapsed

#180

Post by denlekke »

djbusby wrote: post #85
denlekke wrote: post #73

Earlier quoted context omitted.

Devils advocate: how do we know binance hasn’t used BNB for collateral other than a tweet (which isn’t proof at all)

Aren't they publishing their books, or audits? IIRC them and CoinBase has/have/had audits to show 1:1.

i don't think they've done either. binance has just today linked to some wallets of some of their holdings but haven't provided any info on any liabilities they have
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