Crypto exchanges want to prove that the market can thrive after the FTX collapse.
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Binance has a plan to save crypto—if it’s not too late
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Ars please stop publishing these “articles” (ie paid crypto advertisements). It’s really gross to see a respected news organization shill for the crypto bros.
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Translation: We didn't get away with enough yet.
The infamous book, "The Sovereign Individual" explains it all in pretty good detail. It predicted what would happen to the World Wide Web now back when it was published. Before there was a WWW.
It's predicted the chaos in US politics since before the Koch brothers decided to burn democracy down. It predicted crypto.
Let's face it, crypto is basically an attempt to avoid regulation and accountability. Not to mention launder money and avoid paying taxes.
The infamous book, "The Sovereign Individual" explains it all in pretty good detail. It predicted what would happen to the World Wide Web now back when it was published. Before there was a WWW.
It's predicted the chaos in US politics since before the Koch brothers decided to burn democracy down. It predicted crypto.
Let's face it, crypto is basically an attempt to avoid regulation and accountability. Not to mention launder money and avoid paying taxes.
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Stefan Berger, a German member of the European Parliament (MEP) who is leading the effort on the new legislation. “The FTX case is the Lehman Brothers moment for crypto. What the cryptosphere now needs is trust, and to build trust you need clear rules and regulatory clarity.”
Cryptocurrencies have always been designed for lack of trust between actors. My guess is the original designers didn't foresee that people would naturally centralize to profit off the system. The financial sharks moving into the exchange business have the advantage of knowing all the tricks that resulted in regulation of traditional financial markets. Caveat emptor, small investors.
Cryptocurrencies have always been designed for lack of trust between actors. My guess is the original designers didn't foresee that people would naturally centralize to profit off the system. The financial sharks moving into the exchange business have the advantage of knowing all the tricks that resulted in regulation of traditional financial markets. Caveat emptor, small investors.
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Sarcastic: They don't actually have any money behind the curtain, so no need for banks! Paradox solved!
Actual: At least some of their assets will indeed be kept in a bank, but a lot of these exchanges' assets are in crypto as well, and so will be held in crypto wallets. Even if they need USD, they might store it as a USD-equivalent stablecoin. FTX's collapse was primarily precipitated by people noticing that most of the cryptos they claimed as assets in their wallets were basically worthless (or rather, that they held far far more of them than were publicly traded, so it was very unlikely they'd be able to liquidate at the claimed price).
I'm surprised (well, not that surprised) that these exchanges don't just publish a list of their hot and cold wallet addresses to really prove assets. Then nobody would have to trust anyone, you could get a live read on who owns what. That's the point, right? Transfer 0.0000001 coin out of each wallet with a message "crypto.com attestation Q4 2022" to prove ownership of the private key, then publish the list of wallets. Tada, proof! Though that still wouldn't prove whether they were solvent. You can have lots of assets (like FTX), but if you have twice as many debts to pay, you're still screwed.
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Um, [ CITATION NEEDED].
Seriously. Who in their right mind thinks the weak projects are gone when they are all weak projects. Don't get me wrong, I think an audit of Tether's holdings could produce more hilarity than Musk buying Twitter, but there is absolutely ZERO evidence that the "industry" has learned anything from the FTX collapse nor that FTX was unique in any significant way. There's a good chance that FTX just got unlucky playing the exact same game as every other exchange.
Grifters gonna grift and anyone taking Zhao's word for anything is just setting themselves up to lose all their money.
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What, exactly? Regular databases are FAR faster, more computing-power- and energy-efficient, require less space, both easier and faster to replicate and distribute and so on.
People have posited e.g. using blockchains for some sort of inventory tracking, because they're "immutable".... except they're only "immutable" as long as you can't get the 51% mark required to seize control of the chain, and that's easy, if the chain is unpopular and/or private, like e.g. a company's internal chain, rendering this supposed "immutability" non-existent.
So, I ask: for what, exact, LEGITIMATE use would blockchains be BETTER than the solutions we already have? Almost as good or approximately as good ain't good enough; they need to be better in order to justify their existence. I also specifically rule out illegal uses here, since that's not relevant for the majority of companies and/or the general public.
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I think the term is prosecute not regulate.. If crypto is not legit then there is nothing to regulate. Should we regulate the illicit drug trade?
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I mean, I think a good dose of decriminalization and regulation would solve a lot of its ills...
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Not to be reductive, but articles like this would really benefit if they at least posed the question, “how could any part of the crypto industry could ever positively affect the real world?” As Noah Smith wrote last week:
The broader point is that the only advantage that trustless blockchains can offer (at the cost of many severe disadvantages) is a means of evading law enforcement. E.g., you can raise equity (or equity-like) financing with a token instead of stocks, but there is no technical advantage to do so unless you want to evade securities laws.
The broader point is that the only advantage that trustless blockchains can offer (at the cost of many severe disadvantages) is a means of evading law enforcement. E.g., you can raise equity (or equity-like) financing with a token instead of stocks, but there is no technical advantage to do so unless you want to evade securities laws.
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But at least with a company I can point to the widget factory they have and the widgets they are selling. Tesla might be wildly overvalued but they make an actual useful product that people want to buy and have assets in factories and intellectual property that you can value.
Crypto is nothing but bullshit all the way down.
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While the hype might be similar (and I agree it can be very bad) I think the difference is you actually own a piece of the company not some sus DAO or an entry in a "decentralized" ledger or whatever.
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Stablecoin. That's one oxymoron that sticks in my craw. I know you personally aren't advocating for crypto, but if your commodity fluctuates so wildly you have to use an actual currency to, uh, pretend your commodity is a currency so people will, uh buy your currency? I guess? That's implicit failures all up and down the chain. Bring in the real world implosions of other "stable" coins and it's even less sensible.
Sorry for the Jeff Goldblum speech pattern but I really just couldn't make sense of what this is all actually supposed to be. It's circular logic somehow running on an open loop, wrapped in a shell game and numerous mixed metaphors.
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The thing to consider is that much of the current business cycle has been filled with QE, loose monetary policies, government incentives and flooded capital markets searching out risky investments. This is generally known as the “liquidity lottery” environment. We don’t live in that market environment anymore, so it will be interesting to see how crypto can survive.
There is no doubt that a current “liquidity lottery” winner is none other than BTC and the crypto/NFT market that it birthed. A market so capital rich, “entrepreneurs” could make millions from a copy pasta idea on a white paper pdf hidden on some obscure website selling useless tokens with a quad trillion+ supply without ever producing the product or service.
When you add on the risk of heavy leveraging in the crypto market and secret fractional reserving of USD equivalent cryptos (stable coins) that create magic paper liquidity out of thin air, you can see where the risks lies within the crypto bubble. If crypto can be morphed into a stable ecosystem post bubble pop is yet to be seen. But crypto has been a solution looking for a problem to solve for a long time. Its greatest ”Market Fit” has been the idea that it removes the government from the equation of money creation. The oddity is that crypto is priced in and derives its value from the fiat system it so rejects.
Overall, I’m not sure if what has been already built has any value. What is likely though Is that, crypto will never be as capital rich or as profitable as it was during its time as a liquidity lottery winner.
There is no doubt that a current “liquidity lottery” winner is none other than BTC and the crypto/NFT market that it birthed. A market so capital rich, “entrepreneurs” could make millions from a copy pasta idea on a white paper pdf hidden on some obscure website selling useless tokens with a quad trillion+ supply without ever producing the product or service.
When you add on the risk of heavy leveraging in the crypto market and secret fractional reserving of USD equivalent cryptos (stable coins) that create magic paper liquidity out of thin air, you can see where the risks lies within the crypto bubble. If crypto can be morphed into a stable ecosystem post bubble pop is yet to be seen. But crypto has been a solution looking for a problem to solve for a long time. Its greatest ”Market Fit” has been the idea that it removes the government from the equation of money creation. The oddity is that crypto is priced in and derives its value from the fiat system it so rejects.
Overall, I’m not sure if what has been already built has any value. What is likely though Is that, crypto will never be as capital rich or as profitable as it was during its time as a liquidity lottery winner.
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Bullshit. With a company I can look at how many things they make, how much revenue they bring in, how high there costs are and how they are distributed, what they have in their R&D pipeline, and come to my own comfort level of how much I'd want to risk owning their stock. There's an actual, measurable business behind the stock.
Crypto? None of that. There is literally no way to determine an appropriate value for any given crypto.
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Owning a stake in a publicly traded company is qualitatively different from controlling an entry on a decentralized ledger. Stockholders have rights under well-developed bodies of corporate, contract, property, and securities laws that are vigorously litigated by an active plaintiffs’ bar and (somewhat less vigorously) enforced by governmental agencies. We have strong institutions dedicated to the principle that those who own a share of a company have certain rights with respect to it (the nature of those rights varies with the type of instrument).
In crypto, ownership is a conceptual ouroboros. Ownership of a crypto token means you have the right to change ownership of that crypto token. If you can’t find someone else who wants to own your crypto token, it is worthless.
Yes, stocks are often overvalued. Sometimes they trade for a positive price even though their entity has a negative balance sheet. If the entity is liquidated, shareholders are last in line to be paid out. But at the end of the day, shareholders have clear legal rights as part owners of their companies. Crypto tokens come with no legal rights, though their purchasers may have valid claims against promoters as a victim of fraud, breach of contract, etc.
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The part where the exchanges don't have anything in banks. Their "reserves" are other ponzicoins, all in one giant, incestuous exercise in sleight of hand.
The real money is in the personal bank accounts of these fraudsters. CZ included.
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Of course the original designers foresaw that people would naturally centralize to profit off their system.
The entire concept of crypto exists because people took a look at the 2008 meltdown and how the rich profited off the backs of everyone else and thought "that should be me. I should be the one taking everyone else's money."
Bitcoin was a grift from day 1. So too has been every single ponzicoin to follow in its footsteps.
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I wonder if Binance will do this when they say they'll publish a transparent "proof of reserve", or if it's just more pinky swears and hot air. The moment FTX crumbled most people in that space had to have been wondering if Binance wasn't also full of shit.
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To be fair, it is a Wired article. Binance is notorious for being a go to for money laundering. Billions from places like Iran, etc. So while I am sure business is great for CZ(I hated writing that but am too lazy to go look for his full name), just more reason it is horrible for society.
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Absolute absurdity. Decentralization is a rally cry being used to appeal to the rubes. They have nothing against centralization as long as it's under their alpha crypto bro and not actual regulators.
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There has not been a single headline about the common good of crypto. Everything has been about it on fire, obvious ponzi schemes, or rugpulls.
Traditional investments while also subject to liquidity issues are rarely this toxic.
Traditional investments while also subject to liquidity issues are rarely this toxic.
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Binance, the company that won't even admit where their exchange is based? They're one of the biggest things that made FTX look safe and competent. I wouldn't trust CZ with 1 Satoshi of someone else's money let alone any of my money.
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Yep, Twice.
If I remember correctly, it was two stages of this.
At first when some journalist reports were out that FTX was shaky, Binance publicly chimed in that they were ditching all their FTX assets, this is when the valuation freefall happened.
After the Binance induced Freefall, Binance stepped in as a "savior", saying they were potentially going to acquire FTX. But then after some Due Diligence looking at the books, they then publicly stated that the books were too messed up, and FTX was beyond saving.
This is against a backdrop, of lots of previous bad blood between FTX and Binance.
That's not to say that FTX didn't deserve to collapse. It most certainly did. Just that Binance gleefully accelerated the demise of a rival and irritant, even if it negatively affected to crypto universe.
Next we just need to figure out how to collapse Binance.
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I thought about this for a long time, and if I needed to handle data storage over a decentralized network, I think i'd stick with DHTs because its not going to be any faster than the blockchain is. Maybe IPFS, even. Implementations are known and fairly robust. Too many blockchains with currencies and the low power proof of stake took too long for adoption. I've moved on.
Whataboutism.
We know the stock market is about as bad but its tied to tangible things and some stocks like blue chips are rooted in tangible value. Its on you if you got snakebit owning Tesla with a pissbaby at the helm.
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So when FANCYCOIN goes "to the moon", where is the equivalent in cash reserves going to come from? Or are they expecting their customers to have wallets for FANCYCOINs and BTCs and ETHs and RANDOMPONZICOINs set up when they come for withdrawals?
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Why do you idiots always lie about "not being a crypto apologist" and then move immediately onto trotting the typical crypto apologist bullshit arguments?
Nobody believes your false equivalence bullshit. Piss off.
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If everyone reading this would just invest some money in crypto and get 2 friends to invest some money and they each get 2 friends as well and so on we wouldn't be in this situation but we'd all be rich instead.
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With a stock, you own a fraction of a companies actual assets. You may earn dividends from their profits, you share in future growth of the size of the company, and you've helped fund the company (directly for IPOs, indirectly by buying secondarily). The companies must produce accurate financial results or else people go to jail.
With a crypto token, you own a crypto token that gives you no rights, no right to accurate financial information, and there is no obligation of the developers to continue working on the project or provide accurate financial pictures or future outlooks.
The stock market is full of companies that sell things and turn a profit. You get a share of that profit generated by manufacturing things that their customers pay for. Again, either through dividends, expectations of future growth, or an eventual company sale. Stock prices and market caps will trend towards fair market value over time, though they may take a while to get there.
The crypto market is apparently entirely made up of companies that think fractional reserve banking is nifty, and so loan to other companies who loan to other companies who loan to other companies who steal all the money and then the thing blows up and everyone loses all their money. There's no economic growth, no wealth generation, and no long-term profit, just a bunch of loans and lots of money departing to pay miners and thieves.
Bernie Madoff went to jail.
The 2008 housing crisis was caused by unregulated trading of sketchy financial assets (sounds familiar!), which are now regulated.
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