Merged Bitcoin - Part 3

psionl0 said:
This article was about a crypto exchange and not about cryptos themselves. Your entire narrative is based on a lie.
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What do you think it is about cryptocurrency that has caused all of these crypto exchanges to be set up and then go bankrupt, seemingly with fraud or embezzlement being involved quite often.
 
Roger Ramjets said:
Sure it does. Crypto brings out the crazy. You know it doesn't make sense, but the thought of all that money you could be making overrides common sense.

Some people say Crypto is just gambling. They are wrong - it's much worse. Crypto promises that everyone will be a winner, which other forms of gambling don't. And crypto pretends to be a better alternative to fiat currency - as if it has a firm financial basis and is morally superior - when it is neither. Bitcoin is fatally flawed and very immoral, but the thought of all that 'free' money stops people from looking too closely at it.

I feel sorry for Sam Bankman-Fried and his friends. I think they bought into the hype and thought that if they were smart enough then everyone could be winner. The FTX crash is proof that everyone isn't (even those who 'hold' forever). It won't be the last. Most have convinced themselves that FTX was a one-off anomaly, when in fact such events are an inherent part of the system. One day it may get to the point where (almost) everyone is loser and it collapses completely - while a few sad hodlers still insist that so long as crypto exists they will eventually win.
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You're saying greed gone out of control, ended up clouding the man's judgment? (His financial judgment, that is --- moral judgment clearly ran right out the door long back for the likes of him.) Possible I suppose; in fact quite likely just that, absent some more nuanced explanation (or convoluted rationalization?).

Incidentally, came across this thread started in Trials, that I've just now subscribed to (but not commented in, having nothing worthwhile to add), that has a very detailed OP, and will no doubt explore the Bankman-Fried thing more fully.



psionl0 said:
This article was about a crypto exchange and not about cryptos themselves. Your entire narrative is based on a lie.
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Actually that sounds like a fair point, the highlighted I mean. Crookedness at an exchange does not necessarily translate to crookedness or weakness in the assets it deals/dealt in.

Although I have to say, I suspect cryptos are inherently more susceptible to this kind of gaming than stocks say --- in practice at any rate, given the maturity of stock markets, even if not necessarily in theory (although perhaps even intrinsically and not just de facto). I readily admit, though, that I really don't know enough either about the mechanics of crypto as far as this aspect, nor about how crypto exhanges have fared since these things got going a decade or so ago, to really express more than just a vague unsupported hunch/guess/opinion on this, that I can't really defend if called on to.

As for the rest of the post, apart from the highlighted I mean, I find it curious how you tend to attack those that find fault with this sainted asset class. Even if you're right, and he's mistaken, why must that mean that he's lying, as opposed to merely mistaken?
 
Chanakya said:
As for the rest of the post, apart from the highlighted I mean, I find it curious how you tend to attack those that find fault with this sainted asset class. Even if you're right, and he's mistaken, why must that mean that he's lying, as opposed to merely mistaken?
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The same faulty arguments have been repeated over and over again for over a decade. The posters are just pretending that I haven't refuted them.

Pointing out problems with unregulated exchanges as if they are problems with the crypto itself (repeatedly) is just part of the dishonesty that crops up all the time in this thread.
 
psionl0 said:
The same faulty arguments have been repeated over and over again for over a decade. The posters are just pretending that I haven't refuted them.

Pointing out problems with unregulated exchanges as if they are problems with the crypto itself (repeatedly) is just part of the dishonesty that crops up all the time in this thread.
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The problem is that the crypto bros keep telling us that the unregulated nature of crypto currencies is an advantage. These fraudulent exchanges keep popping up because of the nature of the assets they deal in.
 
jeremyp said:
The problem is that the crypto bros keep telling us that the unregulated nature of crypto currencies is an advantage. These fraudulent exchanges keep popping up because of the nature of the assets they deal in.
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This is a case in point. Deliberately using cryptos and crypto exchanges interchangeably in an attempt to muddy the waters.
 
psionl0 said:
This is a case in point. Deliberately using cryptos and crypto exchanges interchangeably in an attempt to muddy the waters.
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Yeah, it's not like they're both integral to each other and they each would disappear if not for the other....oh, wait a minute, it is, isn't it.
 
wareyin said:
Yeah, it's not like they're both integral to each other and they each would disappear if not for the other.
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Correct.

OTOH maybe the unregulated exchanges wouldn't exist if there was no bitcoin (or the more legitimate brokerages didn't constantly try to dismiss bitcoin as a joke) but bitcoin doesn't need an exchange to exist.
 
psionl0 said:
The same faulty arguments have been repeated over and over again for over a decade. The posters are just pretending that I haven't refuted them.

Pointing out problems with unregulated exchanges as if they are problems with the crypto itself (repeatedly) is just part of the dishonesty that crops up all the time in this thread.
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psionl0 said:
This is a case in point. Deliberately using cryptos and crypto exchanges interchangeably in an attempt to muddy the waters.
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Heh, I doubt this line of discussion will really get anywhere, but I can't help remarking, it's kind of odd that you think there's whole hordes of folks that are out to "lie", and deliberately "muddy the water", and whatnot, basically people out with an agenda to besmirch the fair name of crypto.



Speaking for myself:

Yes, agreed, an issue with the exchange does not necessarily amount to an issue with the asset, as I've agreed already.

But: Is it that the nature of the crypto is such that, technically speaking, makes it more susceptible to this sort of thing? Like I've said, I don't know enough to hold an informed opinion on this, but I kind of suspect that is the case.

Because if that is not the case, then why is it that crypto exchanges keep going phut? (Again, I've not rigorously compared crypto exchange failures and crypto market cap, to other exchange failures for other assets and their market cap, but it is my [vague, admittedly uninformed] impression, that these things happen more often with crypto than with other assets.

I suppose clearly pointing out whether crypto exchanges do tend to fail more than other assets, and if so whether there's any inherent technical reason for this, or whether there's some other regulatory basis for this --- that'd probably be the way to go, I should have thought, rather than briefly telling people they're lying and muddying the water or whatever.

But hey, I'm just the guy looking in, no dog in the race really, so well, whatever suits you.
 
psionl0 said:
Correct.

OTOH maybe the unregulated exchanges wouldn't exist if there was no bitcoin (or the more legitimate brokerages didn't constantly try to dismiss bitcoin as a joke) but bitcoin doesn't need an exchange to exist.
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Getting a little semantic here. It needs an organized on-ramp to exist in any meaningful way. If for no other reason that it is a source of information about value and that information is vital to liquidity and vital to the concept of bitcoin as a store of value. If we are all exchanging bags of cash for bitcoin in private transactions valuing that bitcoin becomes virtually impossible.

Which makes bitcoin useless as a store of value and cripples it as a currency.

Theoretically I guess there could be an all-Bitcoin economy where the worth of the coin can be determined by market forces. Price of a candy bar, etc. Theoretically.
 
psionl0 said:
Correct.

OTOH maybe the unregulated exchanges wouldn't exist if there was no bitcoin (or the more legitimate brokerages didn't constantly try to dismiss bitcoin as a joke) but bitcoin doesn't need an exchange to exist.
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As crypto has no utility outside of the exchanges, and the crypto exchanges have nothing to do without crypto, you're obviously wrong.
 
Chanakya said:
But: Is it that the nature of the crypto is such that, technically speaking, makes it more susceptible to this sort of thing?
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No, cryptos are just digital assets. Nothing in them technically causes exchanges to be risky.

It is the politics of cryptos that resulted in shonky exchanges. You couldn't trade bitcoin on regulated brokerages/exchanges. Whether this is because the regulatory requirements were too onerous or the brokers didn't want to facilitate trade with something they didn't understand I don't know. But there is a demand for a bitcoin market of some type and unregulated exchanges arose to fulfill that demand.

I have always said that bitcoin exchanges are a risky proposition. There is always the risk that the exchange could fail or that the operator might just take your money and run. If you must use them then don't leave any money or bitcoins with them. Take it out as soon as you have completed your transaction.
 
Suddenly said:
Getting a little semantic here. It needs an organized on-ramp to exist in any meaningful way. If for no other reason that it is a source of information about value and that information is vital to liquidity and vital to the concept of bitcoin as a store of value. If we are all exchanging bags of cash for bitcoin in private transactions valuing that bitcoin becomes virtually impossible.
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This is not true at all. You don't need a fully developed exchange to facilitate trade or learn the current price of a crypto. Exchanges are just a convenience. As with any other product, you just have to check the ads to see what sellers are asking or buyers are offering.
 
psionl0 said:
This is not true at all. You don't need a fully developed exchange to facilitate trade or learn the current price of a crypto. Exchanges are just a convenience. As with any other product, you just have to check the ads to see what sellers are asking or buyers are offering.
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You are referring to bartering.
 
psionl0 said:
This is not true at all. You don't need a fully developed exchange to facilitate trade or learn the current price of a crypto.
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Maybe if crypto actually functioned as currency, but it doesn't. People need exchanges to trade crypto for real currency on anything more than the smallest scale.
 
psionl0 said:
No, cryptos are just digital assets. Nothing in them technically causes exchanges to be risky.
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Ok, right. Thanks for clearing that up. :thumbsup:

(I'm assuming you know what you're talking about, and that you're right about this.)


It is the politics of cryptos that resulted in shonky exchanges. You couldn't trade bitcoin on regulated brokerages/exchanges. Whether this is because the regulatory requirements were too onerous or the brokers didn't want to facilitate trade with something they didn't understand I don't know. But there is a demand for a bitcoin market of some type and unregulated exchanges arose to fulfill that demand.

I have always said that bitcoin exchanges are a risky proposition. There is always the risk that the exchange could fail or that the operator might just take your money and run. If you must use them then don't leave any money or bitcoins with them. Take it out as soon as you have completed your transaction.
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Makes sense. A regulatory issue, then. I suppose the obvious way out of that is via corrective regulation, including audit. Meantime, as you say, caveat emptor.
 
From an interview with The Atlantic a few weeks before FTX collapse where he was asked about the need for regulation. He was advocating for FTX friendly regulation because he was a "good actor" and wanted to get rid of all the "bad actors."

https://www.theatlantic.com/technol...ankman-fried-crypto-ftx-2022-midterms/671823/

But I do happen to be a subject-matter expert on that. And so I’m thinking about crypto policy from the perspective of my time, not my money. And so I do spend a lot of time engaging day-to-day with people in D.C. on crypto policy.
...
Bankman-Fried: It is absolutely the case right now that there are not nearly enough guardrails, and not nearly enough customer protection. Having a real regulatory framework by which good actors can help build out the ecosystem while getting rid of a lot of the scams: All of those can be super-healthy things for the crypto ecosystem, and ultimately for the world, and for consumers.
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I wonder how many other exchanges are running fast and loose without internal controls? The standard seems to be to insist everything is great just prior to halting withdrawals. Pretty similar to the way banks operated in the USA back in the 1930's.
 
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