It's not like because he made one really bad decision, none of this other bad decisions exist anymore.
After all, it's not difficult to find an effective book teaching one to safely cross a road.
Edit: well color me an idiot, I just checked and a 2019 usnews report had boston as ranked 3rd on worst drivers, based on whatever set of variable they came up with, so touche.
One other thing to note is that two of the _other_ top 10 are also in Mass, Worcester and Springfield. That's the only triplet on the list in the same metro area.
Though I guess, for the point I was making, it doesn't matter if Boston driving is the actual worst in the country or not, as long as it's very bad, which I promise you it is.
But how many MIT students actually get hit by cars? the number would be unusually high if the number of close calls were unusually high, but without looking up any statistics I can assure you it's something nobody ever thinks twice about.
Also Mass Ave which tons of people cross is not the most highly trafficked street by MIT, that would be Memorial Drive, but hardly anybody even has a need to cross Memorial Drive so that part is also hinky.
The end result looks like a lot of people have death wishes, but the pedestrian injury rate isn't actually unusually high.
Contrast to NYC where I do follow that exact process you're describing - act oblivious, make yourself look like you really will let them hit you, that way they won't. Although in NYC you gotta be real careful about that strategy...
Back then, painted crosswalks would have been a waste of paint.
There are also plenty of booksmart nerds with high emotional and practical intelligence. (I like to think I'm one, sure didn't used to be.) On the whole they are fun people to be around.
Mere intelligence is not enough in that context. Ideally you want to have apprenticed for at least a few years at a real exchange or custodial service. Somewhere you learn all the engineering details about how to architect it with proper financial controls, safeguards, and correctness guarantees so that this kind of failure cannot happen, either via human skullduggery, mistakes, or system bugs or security vulnerabilities.
Sam never had any of that. He probably got caught up in the moment, implicitly assumed he was smart enough to compensate and not need it, and his investors were all finance guys overly impressed with his trading ability and ignorant of the above. This is the unfortunate but unsurprising result.
It's important for the business that the insurance fund is safe. If you look closely you will find that it is unsafe. But if people believe it is safe you won't need the insurance fund, so do whatever you need to to inspire confidence in the insurance fund.
(All things SBF may have told himself.)
I feel like justice is being done here, but there's a sense in which SBF and his cohort are the victims here. A world of zero interest rate incentives/people, a trendy money machine in crypto, a general sense that old people/regulations are impoverishing us all with their nervous sclerosis, all created an environment where--in hindsight--this was inevitable. If not FTX then someone else.
I think people are 100% right to call out the press/publications/investors/regulators who flat out encouraged this charade to continue well beyond the point where it was an obvious scam, and I think we really need to examine the VC culture of "find (or create) a young megalomaniac, give them tons of money, ... profit". How do we think these things will turn out? Will we spend billions of dollars building Uber, which at this point is an app that shows you ads and incidentally hails a cab? Will we spend billions of dollars building trash companies that scam people? Will we spend billions of dollars building Airbnb, which was pretty ruinous for cities and at this point not even a good business? Will we spend billions of dollars building e-scooter companies that exist essentially to create tons of e-waste that litters our sidewalks and landfills?
It's nuts. Please just fund day care.
It's undeniable he committed fraud, repeatedly lied to his clients and tried to make them give him money by telling them tales that weren't true.
But it also seems likely he thought he was clever/lucky enough that it would all work out in the end.
That makes the intent different, and culpability is always about intent.
In fact SBF reminds me more of Billy McFarland (of Fyre Festival fame) than of Madoff.
What on earth is the difference between this and Madoff?
>But it also seems likely he thought he was clever/lucky enough that it would all work out in the end.
What on earth is the difference between this and Madoff?
>That makes the intent different
Why do you assume bad intent in one case and none in the other? SBF stole customer money and used it for political donations during one of the most heated, divisive, controversial elections in recent American history. He's the sitting President's largest donator, and he's going to prison for fraud. The potential consequences here are massive.
Those investments were fraudulent because they were made without the consent of the people providing the money, but they were investments nonetheless: SBF was buying assets, not just pissing money away in jets and catering (although he also did that).
In Madoff's case there were no assets at all. It was not possible for Madoff to convince himself he was doing something that may become viable, given enough time. It was possible for SBF.
I think that's a pretty big difference.
(Also, campaign finance violations are not part of the trial that just ended, at all.)
> You cannot apply ordinary arithmetic to numbers in a cell labeled “HIDDEN POORLY INTERNALLY LABELED ACCOUNT.” The result of adding or subtracting those numbers with ordinary numbers is not a number; it is prison.
This wasn’t a case of poor engineering practices or poor internal controls. It wasn’t a mistake. It was all very intentional
Lack of internal controls isn't the reason for why the CEO and owner of FTX is funneling billions of its customer dollars into a company he owns - Alameda.
It's just straight up fraud.
You should probably let some other adult, (and the FBI) know if the owner asks you to do that, but you can't physically stop him. It's his company. He has complete power over it. It's not a democracy, there's no checks and balances on the power of an owner-CEO.
That people just accept that founder CEOs are allowed to do everything with their companies, and their companies money, is troubling. Because, as soon as said company is a seperate legal entity, it is the companies assets and not the founders anymore.
Maybe even CompSci graduates shoupd get some basics of business, legal and ethics during their studies.
That's a bit like:
"The bank robbers' mistake was a lack of internal control and security advisors who could have safeguarded them from robbing banks"
That's a pretty big caveat, though.
The pop psychology term for this is the Dunning-Kruger effect.
> zero experience in building a major service that custodies billions in other peoples' money.
This is exactly what the Dunning-Kruger effect describes. He was incompetent at the task he was doing and didn't know enough to be aware of his incompetence.
What you might be thinking of is the smbc Mt. Stupid diagram [1] which does relate overinflated sense of know-how to a relatively low experience level.
That is distinct from the DK effect in important ways. Of course it doesn't help that if you google images for DK effect 19/20 first results will be a bastardisation of the Mt Stupid comic.
This is a common misconception. Wikipedia has a pretty good write-up. Quoting the first paragraph:
> The Dunning–Kruger effect is a cognitive bias in which people with limited competence in a particular domain overestimate their abilities. Some researchers also include the opposite effect for high performers: their tendency to underestimate their skills. In popular culture, the Dunning–Kruger effect is often misunderstood as a claim about general overconfidence of people with low intelligence instead of specific overconfidence of people unskilled at a particular task.
The original paper [1] was explicit that this was domain-dependent.
> The point of the DK effect was even with experience, the disparity between ones competence and awareness of ones relative competence doesn't improve.
I don't think this is consistent with the literature. In the studies I'm familiar with, there is the classic Socrates effect that the people with the most skill are aware of how little they know and tend to underestimate their relative performance. So it improves significantly, but there's a slight over-correction.
Quoting the original paper:
> improving the skills of participants, and thus increasing their metacognitive competence, helped them recognize the limitations of their abilities.
[0] https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
It’s that “one simple trick (what they don’t want you to know)” kind of predatory advertising that seems to be what ensnares people.
It’s adjacent to the hustle culture you see on social media where people with gleaming white teeth tell you they’ll make you rich
Consider it a VC investment. First, you gave to either understand the underlying technology, or someone you trust have to understand it sufficiently to be able to say "this is bullshit", or "this is a great novel idea that makes a lot of sense".
Then you invest a bit of your really disposable income in it and don't touch it for a couple of years. Eventually you sell once you're happy with the price, or you forget about it and check few years later.
Edit: also, it really is down to luck too. An idea might be great, but the people behind it can be scammers. Etc. Crypto is(or was) a very high reward, very high risk game.
And for God's sake don't invest your life's savings in crypto!
Arguably the entire monetary system is also kind of like that - but it's got the benefit of true utility outside of speculation. It's a shame that most of the interesting crypto-as-money stuff - smart contracts, accessible to everyone financial APIs, pseudo-anonymous payments etc, has been completely dwarfed by the crypto-as-investment situation. Maybe it'll shake itself out long term, but I suspect the fundamental problems of unregulated "money" will be inescapable.
It turns out there's a reason we have financial regulation.
That's about as big as it gets, and pretty well explains the long legs this con continues to have. A lot of marks out there.
The only thing bigger would be an interstellar "galactic-coin". God. I can only imagine the carnage. Seems like a great premise for a sci fi story.
The ones I think are truly scams are the "stablecoins" and "exchange tokens", which are nothing more than a fiat currency offered by an entity smaller than a government with less accountability than a government, and no way to ensure the value/supply/demand of their coin. So yes, I think FTX was a scam to the extent that they traded FTT while printing or consuming it however they liked.
Also I did put investment in quotes. I don't consider it an investment like stocks of a well established company, but if you put money in a security and you can reasonably expect some return at some risk it is an investment.the main difference is that with gambling you play against "a house". A single entity that controls "the market". With crypto, you can take your security and sell it to anyone, or buy stuff with it.
And no, I haven't robbed anyone, I haven't forced anyone into it to buy at gunpoint. I haven't bought in by using secret knowledge. And If you think crypto is both a gamble and a ponzi I wonder what do you think about forex. If anything that looks a lot more like betting as 99% of forex "brokers" don't actually buy/sell for you, but you bet against them.
On Forex I lost £3500 when the UK brexit referendum went the other way than I predicted. Was I "robbed". No, I made a bad "investing" decision.
Have you never lost at a stock market either?
> Then you invest a bit of your really disposable income in it
Sorry, but I find it a bit funny that in your "winning strategy" you seem to invest on the second step regardless if you in the first step ended in the "this is bullshit" or not. (full disclosure, so far, every crypto thing I have seen has fallen to the "this is bullshit" bucket in my opinion. But I guess my "if it looks, walks and smells like bullshit, don't touch it with a ten foot pole" is not a winnig strategy.)
Perhaps this is my failure to express this clearly, but I thought it obvious you don't invest if you think it's bullshit.
> all crypto is a scam
Most people think SBF spent all his customers' deposits on private jets and luxury condos, and blew the rest on shitcoin bets that went bad.
But despite the insinuations of prosecutors, the PJ trips just don't add up to much in the scheme of things, and the real estate is still there and can be sold.
Yes, some shitcoin bets were bad, but they're offset by investments that paid off like the Anthropic stake.
It's likely that the only haircut depositors will have to take is the billion dollars in bankruptcy lawyer billings.
> the bloody Washington Post told you it's either a Ponzi or a pyramid scheme in 2015
If you put in $10K when WaPo told you it was a Ponzi, you'd have $1.6M today.
Maybe next time the bloody Washington Post gives you investment advice, you should do the opposite.
I did and I had significant losses. What does that say about your statement?
https://www.washingtonpost.com/news/wonk/wp/2015/06/08/bitco...
> The thing is, I don't actually use it. I just hoard it. I'm waiting for some greater fools to push up the price by using theirs.
Holding is about the same thing as buying but with no transaction cost.
This is the fuel that drove crypto. Yes it's a scam; I'm just hoping others will buy in after me and I can cash out with their money.
Obviously there's still investment bubbles - but underlying it all is ownership in a corporation.
Fundamentals define a floor for stock price, but above that it's all vibes. Which is fine, as long as we're on the same page.
On the other hand, buying crypto"currency" becomes ... just that. It sits there until you sell it to someone else.
In other words, if you rolled back all transactions in a stock ever made you'd end up with a positive sum totaling dividends paid out. If you rolled back all Bitcoin transactions you'd end up with a big fat zero. Minus, in both cases, transaction fees but while it's a mere convenience for stocks it's inherent in Bitcoin which makes it a negative sum game and as such a scam.
Yet we didn't conclude only from this all crypto is a ponzi.
That all crypto is a scam clearly comes from the fact it is a negative sum game. When you have a game where you can tell which set of players in total are going to lose and which set of players in total are going to win without knowing the rules of the game -- that's clearly a scam. All you need here is any commodity with baked in transaction fees. The exact same would be true if you traded with plastic poker chips but you needed to pay someone a fee whenever you bought or sold one. Indeed, reviewing the process with such chips makes it more clear, stripped of high tech mumbo jumbo.
Stolfi argues all crypto is a Ponzi because 1) people invest into it because they expect good profits, and 2) that expectation is sustained by such profits being paid to those who choose to cash out. However, 3) there is no external source of revenue for those payoffs. Instead, 4) the payoffs come entirely from new investment money, 5) while the operators take away a portion of this money. Our argument in the previous section was 3-5, you need to add 1 and 2 for it to become a Ponzi. https://ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-pon...
> gold has a source of revenue besides the investors; namely, the purchases by consumers like jewelers and industry, who take gold out of the market (2/3 of the production) for uses other than re-sale. When one buys 1 oz of gold, one gets a chip of a metal that one can sell to those consumers, and thus obtain some money that does not come from other investors.
The argument for crypto, etc is the same. There are consumers who want to make purchases, use contracts, etc.
There's a seller for every buyer, and the company does not care about it any more than having happy owners is good.
Investment in the form of bonds is another thing entirely, that's purely capital.
In 1999 Harry Markopolos had informed the SEC Madoff was running a fraud. Yet it took until the 2008 financial crisis for Madoff to be exposed. I am sure you've made quite some money if you invested with him in this time period.
Nevertheless not all cryptocurrencies satisfy the above. The prime example being Ether. In the last year it has experienced -0.186% circulating supply inflation (i.e. it's non-dilutive to its holders) [1]. While the network has captured around USD 6.5M per day ~ 2400M per year in fees due to its usage as settlement layer which are paid to its stakers. Basically, it's cash-flow positive and does not rely on greater fools to sustain its economics.
[1] https://ultrasound.money/ [2] https://charts.coinmetrics.io/crypto-data/?config=JTdCJTIybm...
Additionally, the fees of the network can only be paid in ETH, which means that any use of the network implies ETH demand.
Whether people transacting on the network care strongly about the costs vs alternatives to create a proper link with fiat is not so easy to show because there isn't always a direct 1-to-1 correspondence between services (and there are switching costs, too) - so the "inherently priced in fiat" is tough to show, I think. Also, being priced in fiat might still not create demand for Ether from fiat holders - that comes from outside demand as per the above.
Demand to settle a transaction on the network is demand for ETH. Because the base_fee of a transaction is burnt, destroyed, so ETH needs to be acquired to use it as a settlement layer. Much in the same way to how heating your house with a gas boiler is demand for gas. Similarly, when natural gas prices skyrocket (cue Ukraine invasion), alternative forms of heating start to look more attractive, and consumers may change their behaviors lowering the thermostats. In the case of Ethereum, alternative settlement layers will look more attractive or some users may lower their use. The same mechanisms are in place. I agree though that the relationship is not linear, that's not what I implied. Simply that the revenues of the network are priced in fiat, because the price is set by an auction to include your transaction on the scarce blockspace. And given at least some users will be sensitive to the price of the transaction in USD they will, at the margin, set the prices for a transaction in USD and therefore the fee revenues of the network.
By the way I appreciate you engaging rationally on this topic in HN. Not a common sight when discussing anything related to crypto but much appreciated.
I agree that there can be some link based on the utility of the network and with less of a speculative frenzy it might actually be stronger now. Not dissimilar to (other?) commodities, which have some link to economic activity but are not directly producing the activity themselves (and they can also have speculative phases). And commodities also have conceptual issues around their use in long-term investment for that reason (but at the same time they exist and trade).
I don't even think SBF had the book-learning, just intellectual arrogance. "I don’t want to say no book is ever worth reading, but I actually do believe something pretty close to that. I think, if you wrote a book, you f---ed up, and it should have been a six-paragraph blog post."
"I could go on and on about the failings of Shakespeare ... but I really shouldn't need to: the Bayesian priors are pretty damning. About half the people born since 1600 have been born in the past 100 years, but it gets much worse than that. When Shakespeare wrote almost all Europeans were busy farming, and very few attended university; few people were even literate—probably as low as ten million people. By contrast there are now upwards of a billion literate people in the Western sphere. What are the odds that the greatest writer would have been born in 1564? The Bayesian priors aren't very favorable." [Going Infinite, p29]
Now I get that Shakespeare doesn't appeal to everyone and is definitely an acquired taste, but to judge his work on probability when the work itself is right there to judge on its own merits is like the joke about an economist who sees a hundred dollar bill on the street and says, "If that were a real bill, someone would already have picked it up."
He also dismisses the "plot twist" in Much Ado About Nothing (when Beatrice asks Benedick to kill Claudio) as "illogical" and the province of characters who are "one-dimensional and unrealistic" because "I mean, come on—kill someone because ... his fiancée is cheating on him?" As if no actual human being had ever killed out of jealousy, when it's usually one of the main motives for murder. It's like he's visiting from another planet or something.
I don't mean to lower the tone, but honestly - what an absolute bell-end!
He's visiting from planet Adderall. If you have $26 in your pocket then you're a tweaker but make it $26B and you're an eccentric genius.
Blame the "mainstream media" all you want but as long as we refuse (for good reason) to give audit power to journalists, mainstream or specialist, you'll keep reading positive pieces about frauds if they stay hidden purposefully.
I'm not sure why you would have wanted to NYT to destroy every company it interviews just for the sake of it. Wouldnt they need proof ? And how do you get them, when they're hidden by a conspiracy ?
Plus, the police in the US, Hong Kong and the Bahamas found nothing and waited for Coindesk to publish a leak by CZ, a competitor, to start looking...
I say that because at the peak of the crypto fever I couldnt distinguish SBF from, say, the CEO of Kraken, and I suspect it's hindsight convincing you something could have been done.
The FT did an impressive investigation of Wirecard, for example. There is a difference between destroying a company and making a couple of common sense questions instead of parroting whatever the interviewee wants. Some basic journalistic practices. It is really not so much to ask.
EDIT: interviewer/interviewee
Again you re asking someth that had been done several times: many people did dig a bit deeper and couldnt find the Alameda hole or the real balance sheets, or the parents siphoning millions and all that stuff that took even time for prosecutors to find.
The role of the media isnt to uncover fraud I think, it's to give you a chance to expose one if you know one. If nobody was willing to talk, what s a journo gonna do?
Carreyrou, a personal hero, had tons of witnesses coming to him for instance.
You don't become a media darling. get billions in investment, and work tirelessly for the greater agenda, by accident.
Someone was in charge of him. Now to him, that might have looked like a range of advisors due to his overinflated ego and lack of intelligence to figure out that he is actually being tightly controlled. In some way he was the perfect puppet, if only he had been a little less of a criminal...
One thing he was used for is to destroy Luna - and I am 100% sure that wasn't his idea either, that attack was extremely sophisticated and done by someone very intelligent. ie, not SBF. But they used FTX and SBF to pull it off.
FTX always seemed like it was set up to control and if necessary destroy crypto.
https://www.reuters.com/legal/bankman-fried-used-customer-fu...
Here's an interview he gave a few months before the FTX collapse: https://www.youtube.com/watch?v=C6nAxiym9oc
Now Tether on the other hand.. I would not be surprised if that has a lot to do with it.
Well, what's the difference between an unhinged, drug-addled loony and an eccentric visionary genius?
The difference is having $26 billion.
Why not call him out on what seems like bullshit? That bullshit has convinced "informed" tech investors like Softbank and Sequoia Capital. And elsewhere at the same time, Andreessen Horowitz is investing $450 million in ape jpegs.
This is absolutely gourmet, Grade A, top quality wagyu bullshit.
Not to mention that a big part of investing in start ups is just ape jpegs with extra steps (i.e. "greater fool" theory).
>>Bankman-Fried’s error was an extreme hubris that led him to bite bullets he never should have bitten. He famously told economist Tyler Cowen in a podcast interview that if faced with a game where “51 percent [of the time], you double the Earth out somewhere else; 49 percent, it all disappears,” he’d keep playing the game continually.
https://www.vox.com/future-perfect/23500014/effective-altrui...
One big factor is who your parents are. SBF coming from an upper-class background, that tilts the scales towards eccentric genius. After all, we know that the children of these families are all extremely special.
-- Howard Payne (Dennis Hopper), Speed, 1994
https://web.archive.org/web/20221027181005/https://www.sequo...
Is he just completely incapable of reading the room, or is it a lvl 10 cynical FU?
SBF has an impeccable pedigree, so the thought that he was a Michael Fenne type was never even considered. Why would he lie, when he could live an honest life and be fabulously rich and comfortable (Jane St, wealthy connected parents, etc)
It is not brought up too often, that often one of the most important differences between them and the viewer of mainstream media is, that this person is vastly more ruthless with regards to ethics.
> Musk claims to be self-made; he moved to Canada at age 17 with $2500 and worked his way up from there. For a while he supported himself by cutting logs, Abe Lincoln style. Nobody paid for his college and he took out $100,000 in debt. Musk’s father invested $28,000 in his first company, but Musk dismissed this as a “later round” and claimed he was already successful at that point and would have gotten the money anyway. The total for that round was $200,000, so Musk’s father’s contribution was only about 15%.
> Obviously there’s still some sense where he benefited from a privileged upbringing or whatever, but in a purely business sense he’s mostly self-made.
When confronted with his actions 2 simpler explanations than "booksmart, but not real life smart" are:
- A scammer (unethical, independent of intelligence)
- Not smart at all
I do not understand how someone see his actions and concludes: he is book smart only. Especially since he has expressed anti-intellectual views.
EDIT: expanded
But not so stationary, because then you were not visible enough
and if not why?
Similarly, not for a freeway.
Where some feel the balance is wrong, is at local-level streets. Today the assumption in most places is that cars have total right of way, and pedestrians must keep clear. It doesn't have to be that way. In a residential area, it's quite feasible to say all road users have equal right to use the space. And in that circumstance, put the onus on the car user (wielding a heavy, dangerous weapon) to not hit other road users.
* Trains are not constant, they come more seldom
* Trains are _extremely_ predicable. Cars are the opposite. This is why trams in i busy inner city are more safe than cars. You know exactly where that tram is going and at what speed.
Aha! you say, there is a perfectly good subway right there! Why don't people take that? Because the MBTA, our transit agency, is a notorious disaster. I won't load you down with examples here, but you can google e.g. "MBTA dumpster fire" or "what is wrong with the MBTA" and soon you'll know all you need to know.
I am a little bit hopeful that Philip Eng, the former head of LIRR and new GM of the MBTA, will be able to turn it around. He really seems to mean business, and he's an actual engineer with experience running a railroad. The old GM, Steve Poftak, was mainly qualified by having an MBA, having the right ideological positions, and knowing the old governor. I don't think anyone is going to miss him.
Getting offtopic, but isn't this more an indictment of America's insane car-centric culture? It's ridiculous that you see a major thoroughfare going through a heavily populated zone which is extremely unsafe to cross yet still laugh at students which "almost get hit by cars".
The MIT campus has a major public road running through the middle of it, one of the busiest surface streets in the area. You don't have to stand there very long to see a crowd of students almost get hit by a car because they didn't look before they crossed the street.
Point is, the old cliche is true, there really is such a thing as a person with a lot of book-learning but less common sense than a sea slug. I think we saw one such get convicted today.