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Why wasn’t FTX’s fraud detectable on the blockchain?

news.ycombinator.com

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Re: Why wasn’t FTX’s fraud detectable on the blockchain?

#21

Post by hakfoo »

mrkramer wrote: post #15
hobbitstan wrote: post #4

The entire crypto sector is fraudulent and hidden behind layers of nonsensical theory. What started as a way to anonymously pay for illegal services on the dark net, morphed into a Ponzi scheme aimed at low IQ tech bros.

>What started as a way to anonymously pay for illegal services on the dark net, morphed into a Ponzi scheme aimed at low IQ tech bros. That was never the point of Bitcoin. Read the whitepaper. Satoshi wanted to decentralize trust in the ecommerce world with the help of transparent P2P decentralized and distributed database called blockchain and he wanted to enable micropayments. There is no mention of buying drugs or…

...and everyone is going to use their newfangled home computers to organize recipes and do biorythym charts.

Even in a charitable interpretation of history-- ignoring that Bitcoin wouldn't scale to micropayment levels-- any early interest in micropayments was quickly overwhelmed by speculation and illegal trade.

I think Dogecoin tips on Reddit circa 2014 are about as close as we ever got to viable crypto micropayments, and ISTR it was done off-chain by putting a balance in a bot.

Re: Why wasn’t FTX’s fraud detectable on the blockchain?

#22

Post by muddi900 »

toomuchtodo wrote: post #12
perryizgr8 wrote: post #11

Earlier quoted context omitted.

> Current estimates are at about $10 billion they lost gambling on crypto with customer money. I just don't understand the scale of it. Ten billion dollars is huge. It takes months if not years, even to lose that much in gambling. Did nobody notice anything off? Was the entire company in on it?

Bernie Madoff ran his scheme for almost 20 years before being caught. https://en.wikipedia.org/wiki/Madoff_investment_scandal

Madoff claims he was just a front-man for a conspiracy by large investors. Which is why he was supposedly not caught.

The theory makes sense, but he refused to name names. It might be that the benefactors are too powerful, but probably he's lying.

Re: Why wasn’t FTX’s fraud detectable on the blockchain?

#23

Post by muddi900 »

hakfoo wrote: post #21
mrkramer wrote: post #15

Earlier quoted context omitted.

>What started as a way to anonymously pay for illegal services on the dark net, morphed into a Ponzi scheme aimed at low IQ tech bros. That was never the point of Bitcoin. Read the whitepaper. Satoshi wanted to decentralize trust in the ecommerce world with the help of transparent P2P decentralized and distributed database called blockchain and he wanted to enable micropayments. There is no mention of buying drugs or…

...and everyone is going to use their newfangled home computers to organize recipes and do biorythym charts. Even in a charitable interpretation of history-- ignoring that Bitcoin wouldn't scale to micropayment levels-- any early interest in micropayments was quickly overwhelmed by speculation and illegal trade. I think Dogecoin tips on Reddit circa 2014 are about as close as we ever got to viable crypto micropayment…

I'd go one further; Bitcoin as a payment method only makes sense if it is illegal, safe from State and inter-state meddling.

Re: Why wasn’t FTX’s fraud detectable on the blockchain?

#24

Post by mrkramer »

hakfoo wrote: post #21
mrkramer wrote: post #15

Earlier quoted context omitted.

>What started as a way to anonymously pay for illegal services on the dark net, morphed into a Ponzi scheme aimed at low IQ tech bros. That was never the point of Bitcoin. Read the whitepaper. Satoshi wanted to decentralize trust in the ecommerce world with the help of transparent P2P decentralized and distributed database called blockchain and he wanted to enable micropayments. There is no mention of buying drugs or…

...and everyone is going to use their newfangled home computers to organize recipes and do biorythym charts. Even in a charitable interpretation of history-- ignoring that Bitcoin wouldn't scale to micropayment levels-- any early interest in micropayments was quickly overwhelmed by speculation and illegal trade. I think Dogecoin tips on Reddit circa 2014 are about as close as we ever got to viable crypto micropayment…

Again read what Satoshi was saying; no home PCs or Raspberry Pi type devices instead server farms will process transactions. It can scale, no reason why it wouldn't. Look at the BitTorrent for example....still viable.

Re: Why wasn’t FTX’s fraud detectable on the blockchain?

#25

Post by mrkramer »

muddi900 wrote: post #23
hakfoo wrote: post #21

Earlier quoted context omitted.

...and everyone is going to use their newfangled home computers to organize recipes and do biorythym charts. Even in a charitable interpretation of history-- ignoring that Bitcoin wouldn't scale to micropayment levels-- any early interest in micropayments was quickly overwhelmed by speculation and illegal trade. I think Dogecoin tips on Reddit circa 2014 are about as close as we ever got to viable crypto micropayment…

I'd go one further; Bitcoin as a payment method only makes sense if it is illegal, safe from State and inter-state meddling.

Bitcoin is by design not tied to the "State" if you will or in another words it makes the central bank obsolete but it still must operate withing the state and within the legal framework of finance and state criminal laws.

After all this years you guys are still getting it wrong; using Bitcoin is not about running away from your real world identity where you would freely be able to buy illicit goods and services. It is about decentralizing trust; giving the people the control of their money and it is about micropayments.

In today world of central banks, commercial banks and credit card companies like Visa and Mastercard, you depend on them to process your transactions but in the Bitcoin type system, P2P network nodes process your transactions.

Banal example is when Visa and Mastercard mangle and eventually ban Porn related transactions. In the Bitcoin world, mining nodes collect the fees and don't care what you pay for. State decides what is legal and what is illegal not credit card companies who act upon their gut feeling of what transactions are "bad" and which ones are "good".

Re: Why wasn’t FTX’s fraud detectable on the blockchain?

#26

Post by mrkramer »

mrkramer wrote: post #25
muddi900 wrote: post #23

Earlier quoted context omitted.

I'd go one further; Bitcoin as a payment method only makes sense if it is illegal, safe from State and inter-state meddling.

Bitcoin is by design not tied to the "State" if you will or in another words it makes the central bank obsolete but it still must operate withing the state and within the legal framework of finance and state criminal laws. After all this years you guys are still getting it wrong; using Bitcoin is not about running away from your real world identity where you would freely be able to buy illicit goods and services. It…

but it still must operate within*

Re: Why wasn’t FTX’s fraud detectable on the blockchain?

#27

Post by trompetenaccoun »

sarcasmatwork wrote: post #8

Public vs private. . . ? "Ledger suffered scalability issues amid FTX saga, says CTO" https://www.cryptopolitan.com/ftx-rattled-ledger/

Ironically of the two most popular brands Ledger is the worse HW choice that's closed source and has had at least one serious vulnerability exposed in the past. But sure, if they want to trust them. There are still copies of the leak going around with customer emails and even home addresses.

Many will probably also go from FTX straight to Binance or other shady CEXs. The mainstream never learns. Funds are safu :)

Re: Why wasn’t FTX’s fraud detectable on the blockchain?

#28

Post by highwayman47 »

patrogizmo wrote: post #10

I came across this really good summary of FTX's fraud on Reddit the other day: "SBF/Alameda's initial strategy was arbitraging price differences between US and Korea/Japan. The different crypto exchanges in different countries would have different prices for the same coin. In theory this was possible but in practice it was basically impossible. They lost money in Korea due to capital controls, they made some money in…

How did SBF get his seed money? That's really the only difference between him and everyone else.
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