Alameda lost tens of millions because of a fat fingering mistake

Re:Alameda lost tens of millions because of a fat fingering ... by josu on Wednesday September 20, 2023 @07:48PM (#37591575)

Here is a good analysis of the flash crash from that day: https://twitter.com/austerity_sucks/status/14523324727258194...

- It lasted 12 seconds.

- Total BTC traded was 290.54

- Only 2% of that was at price of 10K or below.

- Most volume happened in $20-30K range, over 50% discount to mkt.

Here is a tweet from someone (rightly) speculating that it had been Alameda: https://twitter.com/TheoryBitcoin/status/1452345411759398923

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Re:Alameda lost tens of millions because of a fat fingering ... by NelsonMinar on Wednesday September 20, 2023 @08:01PM (#37591654)

The good news is that the world's Bitcoin network can only process ~100 transactions in 12 seconds.

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Re:Alameda lost tens of millions because of a fat fingering ... by Vecr on Wednesday September 20, 2023 @08:05PM (#37591678)

(Most) trading's not done on chain, it's settled later. Alameda could absolutely trade faster than that.

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Re:Alameda lost tens of millions because of a fat fingering ... by 0cf8612b2e1e on Wednesday September 20, 2023 @08:10PM (#37591708)

Doesn’t that just mean the trading is done by a trusted third party? Fine until the third party goes belly up.

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Re:Alameda lost tens of millions because of a fat fingering ... by vgatherps on Wednesday September 20, 2023 @09:13PM (#37592120)

This is how most asset trading works, but outside of crypto these third parties are actually trustworthy

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Re:Alameda lost tens of millions because of a fat fingering ... by JumpCrisscross on Wednesday September 20, 2023 @10:13PM (#37592515)

> outside of crypto these third parties are actually trustworthy

With multiple layers of mutualised failsafes.

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Re:Alameda lost tens of millions because of a fat fingering ... by vgatherps on Wednesday September 20, 2023 @10:35PM (#37592619)

Don't forget meaningful regulations and legal requirements placed upon these parties

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Re:Alameda lost tens of millions because of a fat fingering ... by peyton on Wednesday September 20, 2023 @10:41PM (#37592648)

Well, one might argue they’re trusted to grift retail. The money firms make doesn’t come out of thin air. SEC is fairly toothless in this area.

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Re:Alameda lost tens of millions because of a fat fingering ... by Scott_Sanderson on Wednesday September 20, 2023 @09:57PM (#37592398)

Yes, the exchanges are 3rd parties that could lose, and often do lose, the money

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Re:Alameda lost tens of millions because of a fat fingering ... by HWR_14 on Thursday September 21, 2023 @12:22AM (#37593195)

I thought the (noncrypto) financial exchanges made a very small amount of money on every trade.

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Re:Alameda lost tens of millions because of a fat fingering ... by zdw on Wednesday September 20, 2023 @08:13PM (#37591723)

Has this improved as of late? Maybe with other blockchain systems?

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Re:Alameda lost tens of millions because of a fat fingering ... by josu on Wednesday September 20, 2023 @09:18PM (#37592161)

Yes, it improved in 2018, but people are still stuck on the 12 tx/s. The Lightning network allows thousands of tx per second [1].

[1] https://en.wikipedia.org/wiki/Lightning_Network

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Re:Alameda lost tens of millions because of a fat fingering ... by quickthrower2 on Wednesday September 20, 2023 @11:55PM (#37593054)

Snarky (flamewar starting) answer is it improved massively since they made the blocks bigger in 2017.

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Re:Alameda lost tens of millions because of a fat fingering ... by josu on Wednesday September 20, 2023 @09:28PM (#37592226)

The Bitcoin blockchain processes a block of transactions every 10 minutes on average. Each block usually contains 2k-4k transactions. The maximum capacity is around 4k, equating to 7 transactions per second or 84 transactions per 12 seconds. (Note that 12 seconds is the confirmation time of the Ethereum blockchain).

That being said, the Lightning Network was deployed on the Bitcoin blockchain in 2018. It allows for thousands of transactions per second, thanks to a very elegant solution[1]. Unlike traditional blockchains, the Lightning Network is not blockchain-based, freeing it from the limitations we are all familiar with. However, it inherits all the security properties of its underlying blockchain. While the Lightning Network has its fair share of shortcomings, its scalability remains an open question. Nonetheless, it has been working great for over 5 years.

[1] https://lightning.network/lightning-network-paper.pdf

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