A person I consider trustworthy is convinced crypto will face a systemic risk | Hacker News Reader

A person I consider trustworthy is convinced crypto will face a systemic risk

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31 pointsignoramous21 comments

I mean... Duh? Like, crypto is facing a systematic risk right now, obviously and publicly. It's like we're standing outside a building with flames coming out the windows and some VC guy comes along and passes us a hot tip that the building has a high fire risk.

Well the crypto HN unicorn is Coinbase. They seem legit but they're bleeding money and atm not only the free money lunch is over but also nobody in their right mind want to invest in a crypto company.

Then Coinbase has a very serious issue: legislators already said that should Coinbase go belly up, the actual tens of billions backing the USCD (Coinbase's stable coin) could be seized to reimburse the investors first.

So, knowing that, who is going to use Coinbase's stable coin? Knowing that at any time the rug can be pulled under your feet.

Even if they're legit they're walking on extremely thin ice.

Then there's the issue of Coinbase, for whatever reason, having pairs trading in USDT (the ultimate scam). And Coinbase is also guilty of having listed several of the pump and dumped shitcoins of SBF's creation.

Sticking to BTC / ETH and actually backing USDC 1:1 without using the funds to bail out investors first was too much to ask?

How are they bleeding money? I would expect that they would make a ton of money from their trading fees

I see [1] speculate that Coinbase users could be considered unsecured general creditors, and therefore lower priority to repay than secured creditors. That does seem bad on it's own. But nothing about equity investors having higher priority on funds. Is there some extra subtlety around e.g. shares being convertible into debt or something weird?

[1] https://www.bloomberg.com/news/articles/2022-05-11/coinbase-...

Shareholders are at the back of the queue in a bankruptcy.

[scene: prominent VC tweeting 2 weeks after Lehman collapse]

A person I have known for more than ten years, who I consider trustworthy, is convinced the economy will shortly experience a systemic risk. I don’t know anything concrete, but if I were exposed, I would be concerned.

He follows this tweet with another saying:

"I didn't write that. He did. Since I don't know any details, I didn't feel I should edit it. And because I don't know any details, it's no use asking me what he means. If you've read the preceding tweet, you know as much as I do."

So this is a rumour about nothing, spread by Paul Graham but blaming a supposed nameless third-party.

Yeah. Seems like a shower thought from Paul. Sure, that's his twitter feed and up to him what he shares but hardly HN worthy.

What’s a “systemic risk”? It’s hard to understand this tweet. It’s so vague and written by someone who probably doesn’t understand much about the tech stack of blockchains

I mean, it's intentionally vague - but considering the source and his social network, I suspect the idea is that PG's trusted source has knowledge of some forthcoming challenge to the fundamental axioms of the current crypto ecosystem. Maybe there's some flaw in Eth's PoS implementation, or maybe Tether is going to collapse or...I mean, pick anything?

How seriously you take this is kind of up to you. I personally don't trust PG one bit - nor do I own a significant[1] amount of crypto - so I won't change anything.

[1] Like many people I have bits here and there from checking it out but nothing material to my overall wealth.

There should be a devil's dictionary entry for "systemic" or "systematic" or related terms like "structural"

> "A person I consider trustworthy is convinced crypto will face a systemic risk"

makes a great addition to the "Hacker News Parody Thread" submission trending today ( http://bradconte.com/files/misc/HackerNewsParodyThread/ ).

It’s going to be pretty sickening to have to listen to Paul and the other appalling VC people who helped enable all this nonsense once it collapses. They’ll say they didn’t know, but of course what they mean is they didn’t care.

I mean crypto always faces systemic risks.

Anyone who isn't planning for the possibility of crypto to visit near zero (before going back up, either in these chains or on new chains) is not being careful enough.

In the short run it could go down another >99%, or back up 20x. Who knows.

That doesn't matter because in the long run: https://www.youtube.com/watch?v=Wt465BEXRkE

https://sellnothing.com/

Is that really the first person Paul trusted to ever tell him this? There have been sophisticated, intelligent, nuanced crypto bears for about as long as there has been crypto.

What doesn't have systemic risk?

PG's tweet is flagged ... why?

First three comments were from crypto apologists who promptly flagged it.

You can ask the mods, but the answer is probably something boring like:

fake quote> Some users flagged it, and pg does not have any special treatment here.

The mod may decide to remove the flag. In my opinion it's too vague, but I don't have any cryptocoins to worry about.

I flagged it because there’s no content to discuss here

Good call

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