FTX

[Stranger Mouse]

I normally post an informative link with details that will bring people up to date but this time I’m just going to post a link to this tweet and let people Agatha Christie this sh.t

https://twitter.com/renato_mariotti/sta ... YLkXkz--5w

[Brightonian]

I normally post an informative link with details that will bring people up to date but this time I’m just going to post a link to this tweet and let people Agatha Christie this sh.t

https://twitter.com/renato_mariotti/sta ... YLkXkz--5w

I'd not heard of FTX, or Bankman-Fried. Just in awe of the nominative determinism.

[Stranger Mouse]

I normally post an informative link with details that will bring people up to date but this time I’m just going to post a link to this tweet and let people Agatha Christie this sh.t

https://twitter.com/renato_mariotti/sta ... YLkXkz--5w

I'd not heard of FTX, or Bankman-Fried. Just in awe of the nominative determinism.

Popehat giving some useful advice https://twitter.com/popehat/status/1592 ... DxM1g7oJ7A

[IvanV]

There is precedent for a crypto-crymynal disappearing without trace - Ruja Iganatova.

Why doesn't it surprise me that there is criminality in something that in most cases is worth nothing but the confidence people have in it, and so useful to a certain customer base. Even stablecoins, that are supposed to be backed with large amounts of actual money, turn out to be rather dubious in many cases.

Given the customer base that might be upset, it wouldn't surprise me too much if the reason Ruja Ignatova is hard to find is that she is lying under a car park in Sofia. Bankman-Fried might also need to remember that it is not just the FBI that might be after him.

Bankman-Fried, Bear Stearns, you couldn't make it up.

[Woodchopper]

There is precedent for a crypto-crymynal disappearing without trace - Ruja Iganatova.

Why doesn't it surprise me that there is criminality in something that in most cases is worth nothing but the confidence people have in it, and so useful to a certain customer base. Even stablecoins, that are supposed to be backed with large amounts of actual money, turn out to be rather dubious in many cases.

Given the customer base that might be upset, it wouldn't surprise me too much if the reason Ruja Ignatova is hard to find is that she is lying under a car park in Sofia. Bankman-Fried might also need to remember that it is not just the FBI that might be after him.

Bankman-Fried, Bear Stearns, you couldn't make it up.

Worth noting that Ruja Iganatova ran a pure Ponzi scheme that didn't actually involve any cryptocurrency (though claims that it did were used to entice people to put in their money).

[lpm]

A pure Ponzi scheme that doesn't involve any cryptocurrency isn't much different to these pure Ponzi schemes that do involve cryptocurrency. They all inevitably end at price = zero.

[Woodchopper]

A pure Ponzi scheme that doesn't involve any cryptocurrency isn't much different to these pure Ponzi schemes that do involve cryptocurrency. They all inevitably end at price = zero.

Different means even if the outcome ends up in a similar place.

[lpm]

Not really different means. Ponzi's stamps are very similar.

[noggins]

The difference is Ponzi knew he was running a scam.

[lpm]

WHAT! You think these f.ckers don't know they're running a scam??!!!

[dyqik]

WHAT! You think these f.ckers don't know they're running a scam??!!!

I suspect a large number of cryptobros think that the central banks are also running a scam, and so they might as well get in on the action as well.

Basically the financial equivalent of FotL.

[bjn]

WHAT! You think these f.ckers don't know they're running a scam??!!!

I suspect a large number of cryptobros think that the central banks are also running a scam, and so they might as well get in on the action as well.

Basically the financial equivalent of FotL.

Chap I worked with and quite liked got into crypto after moving to the USA. He’s actually bl..dy smart, but is a true believer. Weird.

[Woodchopper]

WHAT! You think these f.ckers don't know they're running a scam??!!!

I suspect a large number of cryptobros think that the central banks are also running a scam, and so they might as well get in on the action as well.

Basically the financial equivalent of FotL.

Chap I worked with and quite liked got into crypto after moving to the USA. He’s actually bl..dy smart, but is a true believer. Weird.

There’s a long history of very smart people falling for scams. Intelligence breeds arrogance and complacency.

[Bird on a Fire]

Mrs BoaF's brother is a doctor who's invested a lot of money in crypto mining equipment. It's not gone well. I feel a bit guilty for being merely lukewarm, rather than actively cautioning, but it's not like my financial records boast of prudent decision-making.

[Gfamily]

A work colleague was significantly* into Crypto trading about 18 months ago - and often said how he was 'Up 20K' over a few weeks; though occasionally regretting that he hadn't cashed out a few days earlier.

I'm unsure whether to get in touch to find out how he's managed in the meantime, as prices seem to have at least halved since then - regardless of what has happened to whatever exchanges he was using.

* significantly in my terms anyway - I understood he had up to 70 or 80K worth at some point, but I'm not sure how much of that was ever realised.

[plodder]

WHAT! You think these f.ckers don't know they're running a scam??!!!

I suspect a large number of cryptobros think that the central banks are also running a scam, and so they might as well get in on the action as well.

Basically the financial equivalent of FotL.

This. The big banks literally create money out of thin air and take a cut. It’s an appealing business model.

[IvanV]

I suspect a large number of cryptobros think that the central banks are also running a scam, and so they might as well get in on the action as well.

Basically the financial equivalent of FotL.

Chap I worked with and quite liked got into crypto after moving to the USA. He’s actually bl..dy smart, but is a true believer. Weird.

There’s a long history of very smart people falling for scams. Intelligence breeds arrogance and complacency.

And, crucially, a greater ability to think up clever self-justifying/self-deceiving arguments, that enable them to continue thinking the clear evidence that they are wrong doesn't stack up.

[noggins]

WHAT! You think these f.ckers don't know they're running a scam??!!!

Yes. Good honest scammers would have cashed in long ago.

[noggins]

.

[noggins]

.

[lpm]

The FTX scammers did indeed cash in long ago.

But a Ponzi scheme will keep going, so long as Incoming Suckers > Departing Suckers + Grifter Extraction.

Grifter Extraction never falls below zero, so the transition moment is when Incoming Suckers < Departing Suckers + Zero. At that moment the pretend asset value collapses to zero because withdrawals must be restricted for Departing Suckers.

[IvanV]

This. The big banks literally create money out of thin air and take a cut. It’s an appealing business model.

Ultimately, money is an IOU. This is argued at considerable length and with considerable cogency and force in Money: The unauthorised biography, by Felix Martin. I recommend this book.

An interesting demonstration of this was during a prolonged bank strike in Ireland. People ran out of cash, cheques could not be redeemed, it predated electronic plastic, etc. People could not transact. So people started to write IOUs, and IOUs from credible individuals were accepted, and then started to be passed on, ie, used as money. Similar things happened to cheques credible people had written. The recipient couldn't take to the bank to redeem so they would get their suppliers to accept them.

Money thus gains credibility from the credibility of the issuer to satisfy you, to redeem their IOU. The Federal Reserve has considerable credibility to satisfy you. A lot stands behind it. Some central banks have less credibility, it is traditional to mention Argentina at this point, for example.

How credible is Bitcoin to satisfy you? Not a credible as a long-standing big bank with large assets.

A separate issue is whether bitcoin is even money. The point of money is to act as a convenient medium of exchange. To be convenient, it should ideally be widely accepted and stable in value, so that prices can be posted. The cost of using it should be low. Bitcoin fails many of these tests. A particularly clever trick with bitcoin is that the high cost of transactions is not borne by the payer or receiver, but by third parties who "mine bitcoin". That's the clever trick without which the pyramid would never have been built.

[dyqik]

This. The big banks literally create money out of thin air and take a cut. It’s an appealing business model.

Money thus gains credibility from the credibility of the issuer to satisfy you, to redeem their IOU. The Federal Reserve has considerable credibility to satisfy you. A lot stands behind it. Some central banks have less credibility, it is traditional to mention Argentina at this point, for example.

How credible is Bitcoin to satisfy you? Not a credible as a long-standing big bank with large assets.

And fundamentally, the credibility of the Federal Reserve rests on political foundations created by the United States legal requirement to accept dollars as discharging debts, the United States legal authority to levy taxes and impose fines, and the United States legal authority to impose criminal sanctions on individuals who do not pay taxes and fines. Plus the United States' willingness and ability to pay its debts to the Federal Reserve.

The economic foundation in this is the United States ability to collect taxes from the US economy, which depends on the health of the economy.

[monkey]

This. The big banks literally create money out of thin air and take a cut. It’s an appealing business model.

Ultimately, money is an IOU. This is argued at considerable length and with considerable cogency and force in Money: The unauthorised biography, by Felix Martin. I recommend this book.

I second this being a good and interesting read.

[Woodchopper]

A long list of very dodgy practices: https://twitter.com/grdecter/status/159 ... szTOB8S9bQ