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We will not pursue the potential acquisition of FTX

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Re: We will not pursue the potential acquisition of FTX

#371

Post by MauranKilom »

matheusmoreira wrote: post #333
chii wrote: post #254

Earlier quoted context omitted.

and this is why banks are not allowed to use customer deposits for such activities. And if they do, they must have equity value to back it up - aka, the bank's share holders lose value _first_ when shit hits the fan, before customer deposits. Then lastly, the gov't has put up guarantees on the deposits in case bank equity cannot cover customer deposits when shit hits the fan. Crypto has none of the above - so basical…

This isn't a cryptocurrency problem though. It's a cryptocurrency exchange problem. As you noted, they have essentially reinvented centralized fractional reserve banking with none of the benefits and all of the drawbacks. They're all unregulated banks in disguise. Cryptocurrencies were meant to put an end to such things. Ironic how corporations ended up reinventing it all on top of crypto. Exchanges are everything th…

I'm not a crypto fan, but don't you need/want things like exchanges to provide liquidity in the market? I mean, that kind of service will spring up entirely naturally due to demand for it, so how do you prevent it from just gravitating to "traditional" finance (which similarly evolved the way it did for a reason)?

Re: We will not pursue the potential acquisition of FTX

#372

Post by jcbrand »

throw474374383 wrote: post #227
kristjansson wrote: post #136

Earlier quoted context omitted.

The problem with MBS was always the zero-sum nature of the alchemy. They took 100 low-quality loans in, and returned 10 high-quality loans, 30 ok-ish loans, and 60 dog-shit loans. No harm no foul, until the dog-shit tranches were marketed as ok-ish, and alchemists believed they we're really creating gold.

I talked to a banker at the time (from BoA I think) and he said these things came about by the banks re-arranging the structure again and again, running it through the risk and credit rating algorithms and then tweaking and retrying until they got something with a good rating. So essentially that's like finding exploits in the other parties risk calculation algorithms or credit rating algorithms until you find some h…

If you have a metric, eventually it'll be gamed.

Re: We will not pursue the potential acquisition of FTX

#373

Post by dncornholio »

jjitz wrote: post #295
Nathanba wrote: post #238

Earlier quoted context omitted.

I've never even heard of FTX and I've been in the crypto space for many years. Binance however was always near the top since it came out. There was one american exchange that used to be nr.1 but became irrelevant after they weren't allowed to serve non-americans anymore. I can't remember the name and it isn't in the top 300 anymore, maybe they had to shut down. EDIT: I just checked and FTX was only founded 3 years ag…

I hate to gatekeep, but I find it pretty impossible that you are "in the crypto space" in any meaningful sense but somehow have not heard of FTX. That's like being "in the crypto space" but not knowing what Ethereum is.

It's absolutely possible to have missed FTX. It really isn't that well known or hyped. It's certainly not comparable to Ethereum....

Re: We will not pursue the potential acquisition of FTX

#374

Post by BLKNSLVR »

jcpham2 wrote: post #300
jjitz wrote: post #295

Earlier quoted context omitted.

I hate to gatekeep, but I find it pretty impossible that you are "in the crypto space" in any meaningful sense but somehow have not heard of FTX. That's like being "in the crypto space" but not knowing what Ethereum is.

Unfortunately I can echo the crypto space sentiment for as long as such an expression can exist I’ve never touched Bitfinex/FTX/Binance or any exchange that allows options or leverage. I am a US citizen. Bitstamp Gemini or Coinbase are the only ones I’ll touch And I’m pissed off that coinbase removed the BTC/USDC trading pair because it had low volume Why will I not touch them? That’s a long story but I see history r…

How about Kraken? They've weathered a few winters.

Re: We will not pursue the potential acquisition of FTX

#375

Post by gpderetta »

funstuff007 wrote: post #274
naveen99 wrote: post #127

Earlier quoted context omitted.

mtgox was bigger too. There are other reasons for a crypto winter like high interest rates and a newly credible us central bank. Rest of the world is not bigger when it comes to non residential real estate: private equity, venture, tech, finance.

speaking of mtgox, where's a good place to sell my MtG cards now?

in Europe, cardmarket.com is very good.

Re: We will not pursue the potential acquisition of FTX

#376

Post by Akronymus »

bambataa wrote: post #365
fspeech wrote: post #332

Earlier quoted context omitted.

Actually the "toy model" is exactly how it works. When you take a loan from the bank and deposit their check your bank must pay whoever the amount on their check. There is not some mysterious ledger they just mark. The fact that a bank takes an illiquid asset - your promise to pay them back - and turns it into a liquid claim on themselves is not creating money out of "thin air". Your promise to pay the bank is not "t…

By your logic, my promise to pay them back is what creates the cash? As someone upthread said, the BoE wrote a report on this: https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m... I assume they would know.

And you paying them back destroys that money.

Re: We will not pursue the potential acquisition of FTX

#377

Post by arcticbull »

gonzo41 wrote: post #264
chii wrote: post #254

Earlier quoted context omitted.

and this is why banks are not allowed to use customer deposits for such activities. And if they do, they must have equity value to back it up - aka, the bank's share holders lose value _first_ when shit hits the fan, before customer deposits. Then lastly, the gov't has put up guarantees on the deposits in case bank equity cannot cover customer deposits when shit hits the fan. Crypto has none of the above - so basical…

A lot of people have been smoking the copium pipe with crypto. Whenever you rightly make these points there's a flurry of downvotes. The only benefit crypto had, was to early movers. Beyond that it's a waste of effort. I expect in a recessionary environment the pressure for a wider crypto market will be too great for many large operations to sustain. Let's hope all those celebrities who made adds got paid in real cas…

> Let's hope all those celebrities who made adds got paid in real cash!

At this point it looks like Tom Brady is going to be playing football well into his 50s.

Re: We will not pursue the potential acquisition of FTX

#378

Post by arcticbull »

matheusmoreira wrote: post #333
chii wrote: post #254

Earlier quoted context omitted.

and this is why banks are not allowed to use customer deposits for such activities. And if they do, they must have equity value to back it up - aka, the bank's share holders lose value _first_ when shit hits the fan, before customer deposits. Then lastly, the gov't has put up guarantees on the deposits in case bank equity cannot cover customer deposits when shit hits the fan. Crypto has none of the above - so basical…

This isn't a cryptocurrency problem though. It's a cryptocurrency exchange problem. As you noted, they have essentially reinvented centralized fractional reserve banking with none of the benefits and all of the drawbacks. They're all unregulated banks in disguise. Cryptocurrencies were meant to put an end to such things. Ironic how corporations ended up reinventing it all on top of crypto. Exchanges are everything th…

Crypto is so hard and so intractable that the only way to use it and interact with it for the majority of people is centralized exchanges. In my opinion there's no way to improve that because its all a product of intentional design choices. Centralization and central authority when properly regulated is good. An anarcocapitalist libertarian free-for-all is terrible.

Crypto is Gentoo. Centralized exchanges are macOS. There's a reason about 10 people use Gentoo. Most people couldn't care less about recompiling their kernel by hand every 10 business days even if when you squint at it from across the room it could be better. They just want to use their computer. Ditto people wanting to etch their recovery phrase onto aluminum and hide it under their birdbath. Blaming the user will only get you so far.

> Cryptocurrencies were meant to put an end to such things.

There's a boatload of very good reasons they didn't and won't. I'm not saying they'll disappear, I've been around this space for like 7 years. I know better than to plant the flag. With that said, there's no reason more people will proportionally use crypto in real life - in the fullness of time - than use Gentoo in real life. What that translates to in price, who knows, and frankly who cares?

Re: We will not pursue the potential acquisition of FTX

#379

Post by arcticbull »

vba616 wrote: post #319
seabrookmx wrote: post #312

Earlier quoted context omitted.

> Banks inherently gamble with customers deposits, every loan is a gamble While there's a ton of nuance here, in the general case it doesn't work how you've implied. When you take out a mortgage, the bank doesn't take a bunch of money other people have deposited. It's literally created out of thin air and marked as a liability on their balance sheet. This is how the majority of money is created in a fractional reserv…

Don't you have that backwards? My mortgage is the bank's asset . My checking or savings account is the bank's liability.

When you bring money to a bank, that money is treated as both a liability (to you) and also as collateral against which the bank can lend money to others.

When a bank lends money to you, it's net neutral. A $100,000 mortgage creates a -$100,000 position on the bank's liabilities list and a $100,000 deposit in your bank account. They create $100K in new money to fund this loan collateralized by both the reserves on deposit at the bank and by the property which you purchased. As you repay that balance, the money that was created to fund your loan blinks out of existence. It is the constant origination of new loans and the constant repayment of old debt which defines the supply of money in the economy - which is why interest rates matter. Neat huh.

I would argue that your balance is both an asset and a liability as defined by your bank's reserve requirements. Your mortgage is net neutral to the bank except for the interest paid on it, which is an annuity of sorts with a net present value offset by the difference between projected recovery rates and your risk of default. The value there is itself created in the origination and underwriting process.

Re: We will not pursue the potential acquisition of FTX

#380

Post by blitzar »

eddsh1994 wrote: post #291
bhouston wrote: post #266

Earlier quoted context omitted.

> AGI Safety research labs If they are not part of a university, it is probably pretty sketchy anyhow.

They fund a huge number of serious initiatives in the space via EA funds - 9, maybe 10 figures.

Just because I have an EA fund with $1 doesnt make it ok to defraud and steal $10 from other people.
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