FTX

Discussions about serious topics, for serious people
Post Reply
User avatar
dyqik
Princess POW
Posts: 7527
Joined: Wed Sep 25, 2019 4:19 pm
Location: Masshole
Contact:

Re: FTX

Post by dyqik » Sat Nov 26, 2022 4:04 pm

Bird on a Fire wrote:
Sat Nov 26, 2022 4:01 pm
I can see the value of the regulation underlying the pound, which I reckon must be a pretty stable currency by global standards? (Thank you for the explanations of economics folks, it's not my area.)

But there might be quite a large market for people who would prefer to take their chances with a stable-ish crypto than trust their assets to the central bank of their own country. There are some quite populous economies that occasionally have big swings against e.g. USD. Also, some central banks are untrustworthy. (Or can everyone everywhere invest in foreign stuff pretty easily?)

You might also expect bet hedging away from central banks during times of crisis, such as during a pandemic or region-wide conflict. Once such cycles were predictable, they would become self-reinforcing.

If a government or economy collapsed, as they occasionally do, it wouldn't take that many people to accept some crypto coin of choice for a country's economy to slowly move online to a parallel economy, rendering the central bank defunct. This could also be a cool "bloodless coup" method, e.g. in Iran. They could do it over Starlink.

Would it be completely unreasonable for people to opt for crypto if the central bank they're forced to use has been long-term sh.t? Or put, say, 10% in a crypto and 90% in your central bank, just in case? Could've been a decent move around the Brexit referendum, for instance ;)
There is a substantial market for that - the financial exchanges and stock markets.

Those people can already buy shares in companies of various sizes, buy Treasury Notes of multiple countries, speculate in foreign currencies, derivatives and commodity futures.

All of which can be bartered for each other, or for goods and services.

This is why I keep referring to crypto as shares in a company with zero turnover and zero assets (except in the case of stable coins).

You can go to an investment bank (not necessarily your main one), and open an account in a foreign currency, or an investment account.

User avatar
Bird on a Fire
Princess POW
Posts: 10137
Joined: Fri Oct 11, 2019 5:05 pm
Location: Portugal

Re: FTX

Post by Bird on a Fire » Sat Nov 26, 2022 4:11 pm

Hmmm. And yet, there are still people whose savings or pensions end up pretty worthless because their country's currency collapsed.

ETA maybe there's a market for a cool investing thing with an app, instead of stuffy old stocks and shares?
We have the right to a clean, healthy, sustainable environment.

User avatar
bjn
Stummy Beige
Posts: 2916
Joined: Wed Sep 25, 2019 4:58 pm
Location: London

Re: FTX

Post by bjn » Sat Nov 26, 2022 4:15 pm

Bird on a Fire wrote:
Sat Nov 26, 2022 4:01 pm
I can see the value of the regulation underlying the pound, which I reckon must be a pretty stable currency by global standards? (Thank you for the explanations of economics folks, it's not my area.)

But there might be quite a large market for people who would prefer to take their chances with a stable-ish crypto than trust their assets to the central bank of their own country. There are some quite populous economies that occasionally have big swings against e.g. USD. Also, some central banks are untrustworthy. (Or can everyone everywhere invest in foreign stuff pretty easily?)

You might also expect bet hedging away from central banks during times of crisis, such as during a pandemic or region-wide conflict. Once such cycles were predictable, they would become self-reinforcing.

If a government or economy collapsed, as they occasionally do, it wouldn't take that many people to accept some crypto coin of choice for a country's economy to slowly move online to a parallel economy, rendering the central bank defunct. This could also be a cool "bloodless coup" method, e.g. in Iran. They could do it over Starlink.

Would it be completely unreasonable for people to opt for crypto if the central bank they're forced to use has been long-term sh.t? Or put, say, 10% in a crypto and 90% in your central bank, just in case? Could've been a decent move around the Brexit referendum, for instance ;)
In which case, use a stable currency rather than your native one, not some privately invented techno token that has the backing of no one but true believer nerds and grifters.

User avatar
Bird on a Fire
Princess POW
Posts: 10137
Joined: Fri Oct 11, 2019 5:05 pm
Location: Portugal

Re: FTX

Post by Bird on a Fire » Sat Nov 26, 2022 4:27 pm

Yeah ok, that's probably a minor use case for
- people in oppressive regimes
- hedging against shrinkage of the global economy.

I dunno, suddenly going around paying each other in a different currency feels unpatriotic, in a way that a grassroots crypto thingy wouldn't.

I suddenly realised something a bit like that happened in Mr Robot, which ok isn't really true,
We have the right to a clean, healthy, sustainable environment.

User avatar
Bird on a Fire
Princess POW
Posts: 10137
Joined: Fri Oct 11, 2019 5:05 pm
Location: Portugal

Re: FTX

Post by Bird on a Fire » Sat Nov 26, 2022 4:30 pm

bjn wrote:
Sat Nov 26, 2022 4:15 pm
[In which case, use a stable currency rather than your native one, not some privately invented techno token that has the backing of no one but true believer nerds and grifters.
Yeah, I can definitely see a lot of people would be reassured by the techno token having the backing of something.

It just takes a true believer nerd to come up with that something. Like, I'd use a crypto bus app if it was better than the crappy one round here. Move fast and break things, I think is the saying.
We have the right to a clean, healthy, sustainable environment.

User avatar
bjn
Stummy Beige
Posts: 2916
Joined: Wed Sep 25, 2019 4:58 pm
Location: London

Re: FTX

Post by bjn » Sat Nov 26, 2022 4:46 pm

I just spent 15 minutes drafting a big long reply. But in essence, crypto is sh.t at being a currency, so even if your country goes all Weimar Republic on its money, it will still be sh.t at being a currency and would be a poor choice.

User avatar
Bird on a Fire
Princess POW
Posts: 10137
Joined: Fri Oct 11, 2019 5:05 pm
Location: Portugal

Re: FTX

Post by Bird on a Fire » Sat Nov 26, 2022 4:47 pm

Even a fast and reasonably stable one?
We have the right to a clean, healthy, sustainable environment.

User avatar
dyqik
Princess POW
Posts: 7527
Joined: Wed Sep 25, 2019 4:19 pm
Location: Masshole
Contact:

Re: FTX

Post by dyqik » Sat Nov 26, 2022 4:54 pm

Bird on a Fire wrote:
Sat Nov 26, 2022 4:11 pm
Hmmm. And yet, there are still people whose savings or pensions end up pretty worthless because their country's currency collapsed.

ETA maybe there's a market for a cool investing thing with an app, instead of stuffy old stocks and shares?
There are dozens of those that don't involve crypto. They let you invest in stocks, shares, derivatives, etc. You can go buy your meme stocks, which still have better backing than crypto, with those.
Last edited by dyqik on Sat Nov 26, 2022 5:00 pm, edited 1 time in total.

User avatar
dyqik
Princess POW
Posts: 7527
Joined: Wed Sep 25, 2019 4:19 pm
Location: Masshole
Contact:

Re: FTX

Post by dyqik » Sat Nov 26, 2022 4:56 pm

Bird on a Fire wrote:
Sat Nov 26, 2022 4:30 pm
bjn wrote:
Sat Nov 26, 2022 4:15 pm
[In which case, use a stable currency rather than your native one, not some privately invented techno token that has the backing of no one but true believer nerds and grifters.
Yeah, I can definitely see a lot of people would be reassured by the techno token having the backing of something.

It just takes a true believer nerd to come up with that something. Like, I'd use a crypto bus app if it was better than the crappy one round here. Move fast and break things, I think is the saying.
Even if the crypto bus app eats 30% of your phone battery everytime you use it, and emits an extra 10kg of carbon over the regular app?

What Blockchain crypto adds to anything is basically decentralized digital signatures and more expensive transactions. For 99.9% of applications, there's no need or benefit from decentralized digital signatures over regular digital signatures, or no digital signature at all.

User avatar
bolo
Dorkwood
Posts: 1016
Joined: Mon Nov 11, 2019 1:17 pm
Location: Washington DC

Re: FTX

Post by bolo » Sat Nov 26, 2022 5:00 pm

Bird on a Fire wrote:
Sat Nov 26, 2022 4:47 pm
Even a fast and reasonably stable one?
Is there such a thing?

In the real world, investors seeking stability in a time of uncertainty buy US dollars.

User avatar
dyqik
Princess POW
Posts: 7527
Joined: Wed Sep 25, 2019 4:19 pm
Location: Masshole
Contact:

Re: FTX

Post by dyqik » Sat Nov 26, 2022 5:01 pm

bolo wrote:
Sat Nov 26, 2022 5:00 pm
Bird on a Fire wrote:
Sat Nov 26, 2022 4:47 pm
Even a fast and reasonably stable one?
Is there such a thing?

In the real world, investors seeking stability in a time of uncertainty buy US dollars.
Or gilts or long term Treasury Notes (on the basis that the currency will recover eventually)

User avatar
Bird on a Fire
Princess POW
Posts: 10137
Joined: Fri Oct 11, 2019 5:05 pm
Location: Portugal

Re: FTX

Post by Bird on a Fire » Sat Nov 26, 2022 5:02 pm

dyqik wrote:
Sat Nov 26, 2022 4:56 pm
Bird on a Fire wrote:
Sat Nov 26, 2022 4:30 pm
bjn wrote:
Sat Nov 26, 2022 4:15 pm
[In which case, use a stable currency rather than your native one, not some privately invented techno token that has the backing of no one but true believer nerds and grifters.
Yeah, I can definitely see a lot of people would be reassured by the techno token having the backing of something.

It just takes a true believer nerd to come up with that something. Like, I'd use a crypto bus app if it was better than the crappy one round here. Move fast and break things, I think is the saying.
Even if the crypto bus app eats 30% of your phone battery everytime you use it, and emits an extra 10kg of carbon over the regular app?
No, I don't think a proof-of-work coin would be any use for daily transactions. But there are plenty of alternatives, grandad ;)
We have the right to a clean, healthy, sustainable environment.

User avatar
dyqik
Princess POW
Posts: 7527
Joined: Wed Sep 25, 2019 4:19 pm
Location: Masshole
Contact:

Re: FTX

Post by dyqik » Sat Nov 26, 2022 5:04 pm

Bird on a Fire wrote:
Sat Nov 26, 2022 5:02 pm
dyqik wrote:
Sat Nov 26, 2022 4:56 pm
Bird on a Fire wrote:
Sat Nov 26, 2022 4:30 pm


Yeah, I can definitely see a lot of people would be reassured by the techno token having the backing of something.

It just takes a true believer nerd to come up with that something. Like, I'd use a crypto bus app if it was better than the crappy one round here. Move fast and break things, I think is the saying.
Even if the crypto bus app eats 30% of your phone battery everytime you use it, and emits an extra 10kg of carbon over the regular app?
No, I don't think a proof-of-work coin would be any use for daily transactions. But there are plenty of alternatives, grandad ;)
Yes, there are. You could buy a carnet ticket in advance, for example. Or load credit onto your bus pass. Or buy tokens. You could buy up a load of airmiles or Nectar points.

None of these are crypto.

User avatar
bjn
Stummy Beige
Posts: 2916
Joined: Wed Sep 25, 2019 4:58 pm
Location: London

Re: FTX

Post by bjn » Sat Nov 26, 2022 5:08 pm

Bird on a Fire wrote:
Sat Nov 26, 2022 4:47 pm
Even a fast and reasonably stable one?
All of them. The volumes of trades these things can handle are puny and you can’t run a country on 10 transactions per second. All the stable coins are some form of smoke and mirrors.

I just had a quick dig into how FTX’s private token was implemented. Skimming their white paper I couldn’t see anything, nor from a quick Google. My suspicion is that it was just an entry on a normal data base and had nothing to do with crypto, which would make it fast to use, but even more laughable as a currency than ones actually based on cryptography. Private Monopoly money.

Give me £10,000 and I’ll put down that you now have 10 BJN Bucks into a database running on my crappy server in the loft. I can’t promise what those BJN Bucks will be worth tomorrow plus you can only trade them through me. What could possibly go wrong?

I also love how Binance, the largest crypto exchange in the world, won’t even say what country it is based in. Obviously it’s all above board. :roll:

User avatar
Bird on a Fire
Princess POW
Posts: 10137
Joined: Fri Oct 11, 2019 5:05 pm
Location: Portugal

Re: FTX

Post by Bird on a Fire » Sat Nov 26, 2022 5:18 pm

bolo wrote:
Sat Nov 26, 2022 5:00 pm
Bird on a Fire wrote:
Sat Nov 26, 2022 4:47 pm
Even a fast and reasonably stable one?
Is there such a thing?

In the real world, investors seeking stability in a time of uncertainty buy US dollars.
I'm not just thinking about investors, I'm thinking about day-to-day money. It is pretty easy to move money between (most) currencies online (for a fee), though.

I get that crypto money hasn't had any good uses yet. I wouldn't put my (hypothetical) savings in it at the moment.

But "all money must always be backed by a national government" is a strong statement. Are national governments, such as that of the US, really the most (or the only) dependable institution people could "bank on"?
We have the right to a clean, healthy, sustainable environment.

User avatar
Gfamily
Light of Blast
Posts: 5180
Joined: Mon Nov 11, 2019 1:00 pm
Location: NW England

Re: FTX

Post by Gfamily » Sat Nov 26, 2022 5:21 pm

dyqik wrote:
Sat Nov 26, 2022 5:04 pm
Bird on a Fire wrote:
Sat Nov 26, 2022 5:02 pm
dyqik wrote:
Sat Nov 26, 2022 4:56 pm


Even if the crypto bus app eats 30% of your phone battery everytime you use it, and emits an extra 10kg of carbon over the regular app?
No, I don't think a proof-of-work coin would be any use for daily transactions. But there are plenty of alternatives, grandad ;)
Yes, there are. You could buy a carnet ticket in advance, for example. Or load credit onto your bus pass. Or buy tokens. You could buy up a load of airmiles or Nectar points.

None of these are crypto.
Postage stamps* would probably have appreciated faster than many investments over the last 15 years.

* Not the monetary denominated ones, but the First/Second Class denominated ones
My avatar was a scientific result that was later found to be 'mistaken' - I rarely claim to be 100% correct
ETA 5/8/20: I've been advised that the result was correct, it was the initial interpretation that needed to be withdrawn
Meta? I'd say so!

User avatar
Bird on a Fire
Princess POW
Posts: 10137
Joined: Fri Oct 11, 2019 5:05 pm
Location: Portugal

Re: FTX

Post by Bird on a Fire » Sat Nov 26, 2022 5:52 pm

They don't take postage stamps on the bus though.
We have the right to a clean, healthy, sustainable environment.

User avatar
bjn
Stummy Beige
Posts: 2916
Joined: Wed Sep 25, 2019 4:58 pm
Location: London

Re: FTX

Post by bjn » Sat Nov 26, 2022 6:00 pm

Bird on a Fire wrote:
Sat Nov 26, 2022 5:18 pm
bolo wrote:
Sat Nov 26, 2022 5:00 pm
Bird on a Fire wrote:
Sat Nov 26, 2022 4:47 pm
Even a fast and reasonably stable one?
Is there such a thing?

In the real world, investors seeking stability in a time of uncertainty buy US dollars.
I'm not just thinking about investors, I'm thinking about day-to-day money. It is pretty easy to move money between (most) currencies online (for a fee), though.

I get that crypto money hasn't had any good uses yet. I wouldn't put my (hypothetical) savings in it at the moment.

But "all money must always be backed by a national government" is a strong statement. Are national governments, such as that of the US, really the most (or the only) dependable institution people could "bank on"?
Money doesn’t have to be backed by a state, but it sure helps.

I have more trust in a western government than anyone setting up a crypto scheme. It’s not a game of absolutes. Crypto was conceived as a way to get around regulation by libertarian bros who think money should be a risk free asset. Many on the left get suckered into thinking it’s some way of sticking it to capital. The people who are most invested emotionally in crypto think capitalism hasn’t gone far enough and that regulation is for weenies.

User avatar
Gfamily
Light of Blast
Posts: 5180
Joined: Mon Nov 11, 2019 1:00 pm
Location: NW England

Re: FTX

Post by Gfamily » Sat Nov 26, 2022 6:18 pm

Bird on a Fire wrote:
Sat Nov 26, 2022 5:52 pm
They don't take postage stamps on the bus though.
Most* of them don't take cash now

*Maybe not most, but many of them anyway
My avatar was a scientific result that was later found to be 'mistaken' - I rarely claim to be 100% correct
ETA 5/8/20: I've been advised that the result was correct, it was the initial interpretation that needed to be withdrawn
Meta? I'd say so!

User avatar
dyqik
Princess POW
Posts: 7527
Joined: Wed Sep 25, 2019 4:19 pm
Location: Masshole
Contact:

Re: FTX

Post by dyqik » Sat Nov 26, 2022 6:20 pm

Bird on a Fire wrote:
Sat Nov 26, 2022 5:52 pm
They don't take postage stamps on the bus though.
They don't take airmiles, gold bars, Nectar points, or crypto either.

User avatar
dyqik
Princess POW
Posts: 7527
Joined: Wed Sep 25, 2019 4:19 pm
Location: Masshole
Contact:

Re: FTX

Post by dyqik » Sat Nov 26, 2022 6:23 pm

The fact is that digital wallets already exist, for regular currency. I can have a virtual preloaded Visa card on my phone, for example.

plodder
Stummy Beige
Posts: 2981
Joined: Mon Nov 11, 2019 1:50 pm

Re: FTX

Post by plodder » Sat Nov 26, 2022 8:53 pm

bolo wrote:
Sat Nov 26, 2022 5:00 pm
Bird on a Fire wrote:
Sat Nov 26, 2022 4:47 pm
Even a fast and reasonably stable one?
Is there such a thing?

In the real world, investors seeking stability in a time of uncertainty buy US dollars.
mate, it takes me 24 hours minimum to transfer large chunks of cash by bank transfer. The pound dropped like a stone recently. Traditional currencies are also clunky and unreliable and there's a colossal system of checks and balances and competitive efficiencies there.

User avatar
dyqik
Princess POW
Posts: 7527
Joined: Wed Sep 25, 2019 4:19 pm
Location: Masshole
Contact:

Re: FTX

Post by dyqik » Sat Nov 26, 2022 11:26 pm

plodder wrote:
Sat Nov 26, 2022 8:53 pm
bolo wrote:
Sat Nov 26, 2022 5:00 pm
Bird on a Fire wrote:
Sat Nov 26, 2022 4:47 pm
Even a fast and reasonably stable one?
Is there such a thing?

In the real world, investors seeking stability in a time of uncertainty buy US dollars.
mate, it takes me 24 hours minimum to transfer large chunks of cash by bank transfer. The pound dropped like a stone recently. Traditional currencies are also clunky and unreliable and there's a colossal system of checks and balances and competitive efficiencies there.
That's the cost of regulation. Without it, you will be scammed instead, or lose all your money in a not-a-bank crash.

The pound dropped like 20%, and then recovered most of that back. That's not a big fall compared to crypto falls in recent months (Bitcoin is down 65% against the dollar in the last year, and 61% against the pound), particularly since a lot of your costs are denominated in pounds, and did not change as a result of the drop.

IvanV
Stummy Beige
Posts: 2663
Joined: Mon May 17, 2021 11:12 am

Re: FTX

Post by IvanV » Sun Nov 27, 2022 11:03 am

Millennie Al wrote:
Sat Nov 26, 2022 4:43 am
IvanV wrote:
Fri Nov 25, 2022 4:19 pm
what advantage crypto would have over traditional banks
The intended advantage of crypto is to remove the need for trust. When you use a bank you need to trust the bank (and, generally, an infrastructure around it which includes at least one government). Some people feel that it is dangerous to rely on a central authority. And they may be right. For example, the American gold seizure shows that governments should not be trusted and might take advantage of any privileged position. General capitalism does not need a central regulatory authority - and that is why it works so well. Crypto currencies are an attempt to have a currency which avoids the need for a central authority which might abuse its position.
The evidence of crypto so far is that it it doesn't remove the need for trust. Trust is removed at some stage of the concept, but there is always a higher stage of the concept where trust is required.

The US government might be untrustworthy, but at least it has heft and backing behind its currency. That reduces its volatility much below the volatility in unbacked tokens, even if they can essentially get away with a small perpetual inflation tax. How do you get heft behind a currency to reduce its volatility? These tokens with nothing behind them do not succeed in that.

Also, a system of currency that removes the need for trust, and is independent of the ability of untrustworthy states to meddle in it, is good for criminals, scammers, money launderers and tax evaders. Such a system just can't be tolerated.

So, yes, we can find some small potential advantages in crypto, or at least in the distributed ledger system that backs it, as Grumble identified. But the other costs are large. It has failed to make that advantage anywhere larger enough in comparison to its disadvantages, except for criminals, scammers and speculators.

User avatar
bjn
Stummy Beige
Posts: 2916
Joined: Wed Sep 25, 2019 4:58 pm
Location: London

Re: FTX

Post by bjn » Sun Nov 27, 2022 11:46 am

In practice the whole eco-system doesn't remove the need for trust. Most crypto-tokens are traded on exchanges, not directly wallet to wallet. This is to get around the inability of distributed ledgers' ability to do anything at scale and how crappy they are to actually operate. Most people end up having to trust the exchanges. FTX, which this thread is all about, shows how wise an idea that is.

Governments do bad things at times, no sh.t. The crypto eco-system does bad sh.t all the time.

Focusing on the technology as opposed to how it's actually used is a common mistake. Given that the whole point of crypto is to circumvent regulation and oversight of financial transactions, who the f.ck do you think it's going to enable and attract?

From the original paper...
Satoshi The c.nt wrote:Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for non-reversible services.
No 'mediation' and non reversibility means limited ability to regulate and enforce oversite. These are seen as bad things. f.cked if I want to use such a thing.

Post Reply