you can sort the landing page here by 24H volume for a quick glance, or you can check the exchanges tab for more detail: https://www.coingecko.com/

https://assets.ctfassets.net/vyse88cgwfbl/2xJyKdUKicdRUWpC9b...

Not one of the first four auditing companies i'd call or trust.

DYOR or "don't trust, verify" are common mantras in the industry for a reason, and similarly are the reason that I hold custody of my own assets rather than relying on centralized entities like FTX.

And note that this was true in May - global markets are WAY down since then.

Moreover, it was only a spot verification - they could have moved money into treasuries for a day and then moved it back again. The auditors explicitly avoided commenting on this.

I'm not claiming to be an omniscient source of truth, but USDT is supposed to be backed 1:1, is audited regularly, and has survived extreme volatility events and bank runs for the better part of a decade.

Maybe it will collapse some day. I personally have more trust in USDC and Circle, so I use that if I need a stablecoin.

https://blockworks.co/tether-pushes-back-timeline-on-audit-r...

https://assets.ctfassets.net/vyse88cgwfbl/2xJyKdUKicdRUWpC9b...

>The company does release quarterly attestations, separate from a thorough audit, as required by a 2021 legal settlement with the New York Attorney General’s Office. Following the hiring of its new accounting firm, BDO Italia, earlier this month, Tether said it intends to release them on a monthly basis, beginning early next year.

But imagined value that, if you play your cards right, you might be able to convert into real dollars. Leaving someone else with the imagined value instead.

If you say, "Selling cryptocoins to others", that isn't actually a product or service.

Oracle (READ: aggregated/decentralized APIs feed) services and other infrastructure that supports decentralized protocols (network graph, etc.)

Decentralized lending, borrowing, trading.

SaaS products in on-chain analytics, portfolio management, commerce aggreggation.

Gaming

Fine Art (a tiny minority of the art scene in crypto is pretty interesting, ex. distributed multiplayer run-time art, something that can't really exist outside of the medium)

Digital Collectibles as an end consumer product or in service of the construction of lifestyle brand / gaming / etc startups. (A lot of the most boring use cases land here, imo)

Advertising

Content creation/consumption

There's a tiny sliver of cases where crypto brings real value by enabling something that you couldn't do without it (e.g. cryptokitties was genuinely novel and interesting). But it's just such a vanishingly small proportion of the ecosystem.

When I take a loan from a bank, I may use it for education, a vacation, medical emergency, a car or invest in a business which will generate revenue and employment.

What do people do with tokens they borrow in "DeFi"? Given that the tokens can't be used for paying college tuition or a hospital bills or rent or buying a machine?

Ownership of bitcoins doesn’t give you ownership over these entities the same as ownership over some shares of Apple.

It’s like saying that you having dollars in your pocket gives you ownership over the White House.

Regarding ownership, however, you can explicitly own things- or parts of things- on the basis of token ownership, but you’re right that this isn’t the way that bitcoin and many other technologies are structured.

And only bad ones from crypto.

Do people speculate on it more than they probably should? Sure. But at the heart of the stock market is a system of "I just sold a physical thing for $1000, and since you own the stock you get $0.00001 of that". At the heart of crypto is "my computer did some math, so... money".

Just like in the equities market, speculation and gambling dominates market values of these things to varying degrees (to a comical extent in growth tech recently, for example).

But where's the value being delivered by that "decentralized banking infrastructure and currency"? Actual usefulness of crypto for genuinely decentralised (i.e. L1) transactions has been going down not up (fees are higher than ever, fewer and fewer stores allow direct payment with cryptocurrency...).

It happens every day....

This is not entirely accurate. The "crypto" industry is not a monolithic piece of technology or implementation. Some tokens provide governance, which is a proxy for legal ownership. Some tokens provide ownership directly or contain trustless, immutable access to assets.

I personally find decentralized programmable networks like ethereum- where it's sort of choose your own adventure in regard to utility, ownership, implementation, et cetera- to be more interesting than bitcoin.

Companies like Coinbase are selling turtles all the way down, then.

Even if a company is loss making and doesn't pay dividend, there will be someone who would be interested in acquiring the company to actually run it and not just just to flip it to a bigger buyer at a later date. That is why Musk paid $44B for Twitter. Because after all is said and done, it is still the most influential social network amongst the people who matter. Owning it has a value for someone like Musk. That value comes from the activity that Twitter conducts and not the demand for its shares.

In crypto value comes only from the demand. In stock, demand comes from the value being generated by the company.

There's a previous submission from a different source: https://news.ycombinator.com/item?id=33535015

Do we now know that:

A) FTX were not segregating those client funds;

B) They were speculating with them after SBF said “not even invested in treasuries”;

C) Seperately, they were leveraging up FTT on their balance sheet.

FTT price fall seems to be the catalyst, but this shouldn’t impact segregated client funds unless they are also being used in funky ways, right?

Surely one of the above is bad enough, but all 3 is an astounding abuse of trust no?

I have defended Crypto and even dabbled in the industry for a while, but this is shocking to find one of the blue chip names losing client funds.

FTX.us is either OK or some people are going to jail. Too soon to tell which.

Steel yourself for future challenges.

Entertaining? Absolutely.

Shocking? Not to anyone who’s been paying attention.

Right now it is very very profitable for them. They can earn interest rates for free, without a high risk.

Feels like the origin story of BNB chain to me

USDT: https://app.aave.com/reserve-overview/?underlyingAsset=0xdac...

USDC: https://app.aave.com/reserve-overview/?underlyingAsset=0xa0b...

Maybe I'm missing something but isn't Binance just insuring funds... with their own coins? (ie. what Alameda basically did with FTT tokens)

1. Couldn't Binance be subject to the same rundown FTX just experienced? / How could Binance realistically rescue FTX at all?

2. Was this offer ever serious?

[1] https://academy.binance.com/en/glossary/secure-asset-fund-fo...

[2] https://bscscan.com/address/0x4B16c5dE96EB2117bBE5fd171E4d20...

IMO Binance has billions of their own cash reserves (not user funds), based on their activity in the last year (acquision of coinmarketcap for 0.4B, commiting $1B to boost crypto projects and companies etc.. this must be a fraction of their overall worth and in that case, $6B should also not be a huge issue, especially since they can get a lot of goodwill and millions of FTX users).

Binance collects billions of dollars from fees every year and also get money from their external investments (e.g. Binance invested in FTX and sold their shares last year for $2B ($1.5B and $0.5B FTT)).

Over the next two years, I learned a great deal about crypto. I entered the market with $7,000. At peak, my portfolio was worth over $500,000. I managed to cash out close to 70% of it and still have mid five figures left.

Since I did buy into the entire ideology of crypto, I avoided all centralized exchanges. Almost all my trades were on decentralized exchanges (such as Uniswap). That also forced me to learn about AMMs, liquidity pools, token emissions, etc. And since my money was already on my own wallet, I also dabbled in NFTs because...why not?

Was it fun? Yes.

Was it wildly profitable? Also yes.

So really, for me at least, it was a net positive. I still believe there are some very interesting ideas in this space. Unfortunately, it has been hijacked by some truly bad actors.

In fact, the reason Madoff got so large was b/c he was one of the few who convinced most early investors not to cash out.

Implying that smart money is 'being early to the Ponzi Scheme' is certainly an outlook on life, IDK if it's a particularly good one though.

Would you call Peloton's VC backers "ponzi schemers"?

What does Ethereum contribute to GDP?

And that's why it's worse than MLMs, at least those pretend to be retailers.

Crypto currencies are like stock tickers. The price does not have to have any bearing on the actual value generated by the stock or the company it represents.

There is a speculative element to all markets, including the stock market. And I think you know that as well.

No it's not. When an asset prices in cash, that price is dependent on it's ability to generate future cash (Goods/Services price based on the utility from consuming that thing). If you think that model is wrong, then you are wrong.

>As far as GDP, Ethereum spawned an entire new industry with tons of companies paying actual salaries to people (in fiat, if I might add), all of whom bought lattes and cars and houses, and some, I'm sure, also bought Peloton bikes.

Oh no no no. You are not buying any of that when you buy Ethereum. We are not talking about whether or not Coinbase/Binance/etc. are Ponzi schemes. They offer services in exchange for fees. That is GDP full stop.

Again, I can argue they are bad businesses because their fees are dependent on a Ponzi Scheme, but they are not the Ponzi Schemes.

>Crypto currencies are like stock tickers. The price does not have to have any bearing on the actual value generated by the stock or the company it represents.

This is a very weird argument. When an acquirer wants to buy a company, they need to pay the stock (usually plus a premium) price to own that company. Stock prices reflect the theoretical takeout price of a company (and this is put into practice every day).

Cryptocurrencies are marketed to you as similar to stock tickers, but they are currencies (it's sort of in the name) and currencies are valued by the demand for goods/services/assets you can buy with them (i.e. this is why export economies, all else equal, have strong currencies).

I would agree that cryptocurrencies would go up in value if you could buy an increasingly large amount of things with them (and only them), but heuristics imply the exact opposite is true.

>There is a speculative element to all markets, including the stock market. And I think you know that as well.

You're really not getting that there's 'overestimate future cashflow' speculation (bad but not so bad) and 'funamental misunderstanding of the asset' speculation.

But, it's your pocketbook so good luck.

But that's precisely why people were valuing Ethereum at x,xxx per token - the belief that Ethereum will one day have the network effect to generate future revenues. And honestly, a lot of projects built on Ethereum did generate an absurd amount of revenue in a very short span of time.

OpenSea and Uniswap are probably the most prominent examples. Both generated a combined total of over $1B in revenue and used Ethereum as the fee token. The speculative price of Ethereum - or any other cryptocurrency, for that matter - relies on the belief that the number of apps like Uniswap and OpenSea will likely increase over the years.

> I would agree that cryptocurrencies would go up in value if you could buy an increasingly large amount of things with them (and only them)

That's precisely what's happening with Ethereum. There are more and more dApps that all use Ethereum to process transactions. There are even SaaS tools that you can pay for in Ethereum, with a single tap from your Ethereum wallet.

I feel like you're attacking me without fully understanding how this ecosystem works, nor have you actually ever used a dApp.

Ok so let's go first principles here (ignoring the word soup that is "have the network effect to generate future revenues.")

For something to create value it has to do something that people are willing to pay for (in currency, goods, services, etc.). That's the GDP point.

Currencies just exist, they don't do anything themselves. People do things with them but the GDP value comes from what those people do, not the currency itself.

OK, you tell me, "but Ethereum facilitates transactions and people pay for those transactions with fees!"

But those fees go to stakers (who do provide a service, albeit a dumb one).

Ok so now you tell me "But yes, stakers need coins, and I'm buying coins now because I think there will be increasing demand for coins vs. a fixed supply!"

Which great, now we are back to "Currencies are valued by the demand for goods/services/assets you can buy with them (i.e. this is why export economies, all else equal, have strong currencies)."

In this case, what ETH buys is 'the right to earn transaction fees on the ETH network'

Great, again I love this. Feels like we are on to something.

But here's the rub: Are people actually buying anything Ethereum?

Are people buying goods with ETH? No, Ethereum is a very bad tool to buy goods/services with and in fact it's illegal to in most of the world (I'm serious, look it up).

Are people buying services with ETH? See above.

Are people buying assets with ETH? No.

What are they buying? Mostly other currencies.

And now we circle back to why it is a Ponzi scheme: nearly all of the transactions that "generate value" today are just people baying the currency because they think demand will be higher in the future. There is almost no outside value being brought in via "the only way I can buy this good/service/asset is via crypto, so I'll buy crypto because I want that good/service/asset"

If we get to a world where people are actually, ya know, using crypto to buy things, I'll buy into it, but surprise centralized databases are actually intrinsically way better at that than crypto is, but again, that's just my opinion that I've spent years thinking about, so good luck on your bet.

>I feel like you're attacking me without fully understanding how this ecosystem works, nor have you actually ever used a dApp.

I just hope you've though as much about the intrinsic nature of impermanent loss as I have, given all your confidence. I'll give you a hint, it's not impermanent and it's screwing you over 100% of the time.

EDIT: I'm going to head you off here, because I know the 'have you ever used a dApp?" is coming.

You can put as many layers on the above as you want, but if consumable goods and services aren't being purchased with your currency, then it's worthless, regardless of how many Liquidity providers there are on Uniswap.

That service is the point of the whole thing. The fees go to stakers who *execute your computation for you and ensure the integrity of the results*. ETH is analogous to credits on AWS. It's simply an execution environment with different properties from AWS.

If people were buying goods and services with crypto then I would agree with you but they are not.

Right now it’s circular and moving in the wrong direction. People buy coins with fiat to pay stakers to buy other currency. That’s the only use case. And a big part of that is because what ETH does is actually one of the theoretically worst ways to buy goods/services imaginable.

That is why it’s a ponzi scheme no matter how similar it seems to non ponzi businesses.

Let’s put it this way, Lu Lu roe (or whatever that mlm scam was called) looks a lot like lululemon, except in one people bought the leggings because they liked them and in the other they bought the leggings to get rich.

Only one of those two was a ponzi, even if they both sold leggings.

To paraphrase Homer Simpson, "Gold can be exchanged for goods and services"

So yeah, if you are an 'the economy is fake' guy then rock on, but otherwise you're wrong.

This is like the Broken Window Fallacy.

All that money that was spent building Ethereum could have been spent on activities that were far more useful to society.

Like all the billions that went into building...Facebook?

Again, I don't understand how you can get into the morality of it all when literally tens of billions of venture funding goes into everything from juicers (remember Juicero) to companies that literally help instigate ethnic cleansings [0]

0: https://www.amnesty.org/en/latest/news/2022/09/myanmar-faceb...

Paying developers goes in the cost column, not the benefit column. (If you hire a bunch of developers and pay them to sit around twiddling their thumbs all day, you're not growing the economy but rather damaging it - they could've done something more productive instead). The question is what value the ecosystem produces that people are paying in for. And there's certainly a subjective element to that, but the market price should be a sanity check.

Peloton sells exercise bikes and delivers virtual spin classes etc.. And while you can certainly argue they're overvalued (and I'd agree with you, FWIW), it's easy to see how they're actually doing something valuable in the real world - something that, in a small marginal way, improves peoples lives. We can have a sensible conversation about whether a weekly Peleton class is worth $45/month, but people are paying that much for it, not as a speculative "investment" but as a simple exchange of money for goods and services. Real people are better off - in that they were able to take the class and get fitter or whatever. There's certainly a speculative element on top of that, but at the foundational level there's real value being produced.

Where's the product or service for Ethereum? They've had long enough to come up with one. People used to talk about doing cross-border currency transfers (genuinely useful) or that cat breeding game (potentially genuinely fun), but nowadays fees are too high for either of those to be worthwhile and people don't really talk about them. It's not just excessive speculation on top of a fundamentally sound business; there's simply no there there.

The best thing for crypto as a currency is for Etherium to be worth in 10-20 years exactly what it is now factoring in inflation. The fact that this is horrible for "Crypto" because this means eth won't be giving the 10-100x returns, is exactly what's wrong with the whole thing.

Have you guys ever even used any dApps?

But that's precisely what currencies are largely valued on - the value of transactions conducted in that currency, and the speculative direction of those transactions.

Why do you think the US dollar is a stronger currency than, say, the Pakistani rupee? The US dollar is used to pay for more transactions AND speculators make a directional bet that the Pakistani economy won't be as robust as the US economy or that the US dollar's hegemony won't be threatened in the short-term.

If you have a speculative belief that Ethereum will power the digital economy, it is reasonable to value it at XX price.

If I have a speculative belief that Venmo will rise above Cash.App, PayPal and crypto and end up powering the digital economy, even to the point that a major Blue Shield insurance company would send me reimbursements on it, should I be putting my savings into its balance? What should I value my money on Venmo? What utility would there be for holding ETH in that balance vs USD, besides sheer speculation that ETH would rise in value?

How is that different from dApp?

Airbnb has no hotels

If these companies don't generate profits, then what assets are shareholders holding onto? The app? The algorithm? The design?

Then that's just IP. And if the asset is just the IP, how is that different from any blockchain dApp, which is just code?

I don't think you're making the point you think you're making. An unprofitable SaaS startup has no assets besides its code either.

If you've got a non-voting non-dividend stock .. you might want to ask what you've actually got there.

Some tokens share revenue with token holders. GMX, for instance, distributes all of the nearly $2M daily fees it generates to holders of the GMX token. Goldfinch, which loans to real-world microfinance companies, also gives back its fees to Goldfinch token holders.

Some tokens are necessary for paying for transactions or any on-chain asset (most core blockchain tokens).

It's not as much hot air as it appears

Cryptocoins, not being part of a circular economy, must, by definition, keep attracting new money to pay for earlier investors. Sounds much like a pyramid.

A more apt analogy would be a public company that does not do any real economic activity and simply issues more shares to cover expenses. Cryptocoins cannot exist without the network running and the only way to cover those expenses is to attract new money without any product. While stock speculation is a zero sum game, cryptocoins are negative sum game. Quite a major difference in my book.

If you look at the revenues generated by OpenSea or Uniswap or Compound, it's not exactly an outlandish idea.

First, stock buybacks are not tax exempt. If a firm earns $100 in profits and buys back $50 of shares, it still pays the corporate taxes on $100, not on $50. Unlike paying interest, corporations don't get to write off money spent on stock buybacks. So it doesn't affect their tax situation.

Second, for the investors in the company, the total aggregate amount of taxes is paid whether the investors are holding 10 stocks and get $1 per stock in dividends, or if they are holding 5 stocks and get $2 per stock in dividends. The number of shares outstanding does not raise or lower the ultimate value of the dividend stream, nor the tax obligation applied to the dividend stream.

What if a company never pays any dividends and just buys back stock? Then it's value is just the terminal liquidation value, and each time investors sell stock back to the company, that is a taxable event for them, probably taxed at the long term rate which is the same as the dividend tax rate, up until the company winds down, in which case the rest is taxed at the long term rate. The set of taxable events is the same as if the company had paid dividends, but the difference is that investors self-select as to who realizes the gain and who doesn't.

Really this is the difference when companies buy back stock -- some shareholders don't want to take any gains, while others do. The total gains are the same, and the total paid to the government is the same, and the time it's paid to the government is the same, but investors can sort themselves into those who want to to take the gain and those who don't. You get to decide when you want to take the gain, and this optionality has value for you. It's as if you could signal to the management -- don't pay out a dividend, re-invest the money that you would have paid out this quarter so that I'll get more later. That's basically what is going on for the individual investor, but for the government, they still get their quarterly taxes paid just in terms of capital gains by those who sell their shares.

But I agree that many do prefer buybacks, for the reasons I outlined -- it gives investors a choice as to when to realize the gain. Some investors may not want to receive the gain each quarter. And this can be a tax benefit, not because the rate is different, but because the timing may be more convenient.

But 2021 was a time when the casino was giving away money for free. NOT gambling was the wrong move. Sitting on a high horse did nothing for anyone, except maybe bask in the schadenfreude when the thing invariably collapses.

Meanwhile lots of people, including me, made life changing money.

Also how much time did you spend on it? Sounds like you went deep down the rabbit hole.

The trouble is that these centralized entities came about when the tech itself was too nascent and there were no decentralized alternatives. So they had too much power and money. And now that they're crashing and burning, the decentralized alternatives can have their moment in the sun.

For instance, there's a dApp for leverage trading called GMX.io. Since it's decentralized, all of its assets and liabilities and treasury balances can be transparently seen by anyone. It offers most things that any large brokerage would offer, and has been functioning without a hiccup throughout the entire clownshow.

When I started out in November 2020, the decentralized economy was tiny and there were few dApps. Since then, there's been an explosion in the number of dApps powering everything from payments to digital asset market places to in-game asset trading. Paying for a digital subscription with a web3 wallet is a better experience than anything in traditional finance.

Of course there's a lot of fluff - that was inevitable given the wild excesses we saw in 2021 - but the pieces are in place to form the foundation of the entire digital economy.

I will be very, very surprised if you're still using your credit card to pay for things online in 2027.

Millions of others did as well. OpenSea has over 2M accounts, all of which only work with a decentralized crypto wallet. Axie Infinity

Anyhow, waste of time talking crypto on this site.

All I'll ask you to think about is if the world will still use credit cards to access digital content in the year 2030.

This is so backward. Meanwhile lots of people, not including you, lost a lot of money.

I am sure you're aware that your $$ come from somewhere. Net positive for them? Not so much.

Ethereum is valued at $x,xxx per token because of the belief that more and more dApps will launch on it and everyone who uses them will have to buy Ethereum.

Uniswap's UNI is valued at $x per token because of the belief that once there is regulatory clarity, UNI holders will get a % of the revenue generated by Uniswap (currently over $100M/year).

These are basically startups with tokens. Some of them will go bust. Some of them will take years to monetize. Some will be profitable within a year.

As far as I can see there's no real equivalent for cryptocurrency - some crypto orgs notionally have revenues, but they always come from speculators or other crypto orgs (and, sure, maybe some drug dealers or capital control evaders, but that's a tiny fraction of the funding). Money goes into the crypto system and nothing of value comes out.

> I managed to cash out

> I avoided all centralized exchanges

> Almost all my trades were on decentralized exchanges

Only the entry and the exit trades were on centralized exchanges then right?

Are there any examples of safe and legal decentralized fiat on/off-ramps? I've heard of "Bitcoin ATMs" (I suppose that would count as centralized though), and I've read stories of people getting into trouble for using P2P services like "Local Bitcoin". It all seems a bit sketchy.

I'd rather die dirt poor in a ditch than spend a minute in a room with libertarians.

Wow, that was unexpected. Taking criticism for boasting about gaining money in a gamble (you said luck was involved) and then weaseling out....

This is the sad part IMHO. A guy who should be regarded as enemy of the people is instead regarded highly just because they happened to win a lottery.

Turns out FTX wasn't making billions. It was losing billions while pretending to be making billions.

Uh, go visit El Salvador. Every MacDonalds, every Starbucks, and tons of local businesses accept "the largest one." That's because bitcoin stands apart, in terms of its real decentralization, and therefore its independence and utility. Give it time, and it will become far more useful than it already is. The dollar may eventually refer not to a specific weight of gold (that's what the term 'dollar' originally meant), but to a specific number of satoshis.

So likes 33% more expensive?

Or is there some system that el salvador developed that acts as a clearinghouse?

Complex sounding technical mumbo-jumbo delivered with supreme confidence and seeming internal consistency is how you convince the plebs to invest their life savings in various forms of crypto.

0.1% understand the original underlying technology 0.9% understands the applications possible to be built on top of it 99% are following the 1% and writing governmental and financial policy, and voting with their wallets.

I wish I could say we will look back and shake our heads at it like we do today at Tulip Mania, but I suspect we're watching the birth and childhood of a new religion. Crypto isn't going anywhere for the rest of our lives, and just as we have to keep vigilantly fighting against Scientology permeating tax policy, or religion in general always attempting to undermine secular society, Crypto will continue to be a thorn in society for a long time.

Take away the hyperbole and technical mumbo jumbo interlaced with the financial mumbo jumbo, and cryptocurrencies and blockchain are less interesting than the latest PostgreSQL update.

But it's that mumbo jumbo that separates ordinary people from their dollars.

2) A lot of people learned about this stuff because it is a very meme-able concept: mathematicians will upend the entire global system of power with... math. The kids who got their lunch money stolen in elementary school really gravitated to it

When the housing bubble collapsed you had millions of people who probably didn’t know the risks (because everyone with a voice was saying housing prices never go down) and politicians cared a whole lot.

I’d say even if the whole crypto craze went bust overnight all you’d get is a collective shrug.

We will not pursue the potential acquisition of FTX - https://news.ycombinator.com/item?id=33537821 - Nov 2022 (15 comments)