Is there no company in the entire crypto space that isn't a wretched hive of scum and villainy? We must be cautious.
Entire financial space. It's just that traditional financial companies are better regulated (and are better at working within the regulations to hide their crimes). But they are not in any way better humans. For every FTX or Binance there's an Enron or Deutch Bank ten times the size and just as villainous.
The dark side of the force with them.
Of course it is not publicly-traded, so that eliminates one source of pressure to be a wretched hive of scum and villainy.
Of particular note is that they are the largest bank in the United States to not require or take a bailout during the financial crisis.
I imagine credit unions have the same lack of pressure that my bank does and it is incomprehensible to me that someone would patronize a financial institution that has incentives to screw them over to make their quarterly report look good.
It is entirely possible to interface with the financial system without dealing with scumbags, or putting your faith into digital magic beans that immediately collapse when the Ponzi stops.
Yes, plenty of people got hurt because they made shitty investments.
How many people got hurt due to their bank running off with their money to the Bahamas/betting it all on red?
Because that's the degree of 'hurt' that the various crypto exchanges have been inflicting on their customers. Can you find me one American who lost money from their savings account in 2008? Or just had it go poof from their stock brokerage?
The only reason we didn't have bank runs and frozen accounts is because the Fed stepped in to provide liquidity to the whole market. The banking system would've collapsed similar to the Great Depression without such action. Lots of people lost their savings in the Great Depression.
Retail investors used FTX, retail was not heavily exposed to Bernie. His marks were mostly institutional and accredited investors, for whom the expectations are far closer to the 'buyer-beware' side of the spectrum.
> because the Fed stepped in to provide liquidity to the whole market.
That's the Fed's job. Everything worked... Pretty much as intended.
And there's a reason it's not stepping in to provide liquidity for the various crypto scams. Liquidity injections can save a situation where value exists, but can't be immediately realized - as in the case of a bank run. In this case, though, there's no value worth saving.
> Lots of people lost their savings in the Great Depression.
Which is precisely why we built systems to prevent that failure mode from happening again. They worked.
I wrote a longer comment a year ago but here's a piece: "The price of gold was $45/oz in 1970. 52 years later it's $1,800/ounce. That's roughly 7.6% a year or 45x increase. If you use the inflation provided by the government, CPI, (1), they say inflation is only 3.6%/year or roughly 7x since 1970. Obviously we have a discrepancy. Is the dollar worth 45x less than 1970 or 7x times?
When we look at prices of things like education, housing, and healthcare, the 45x number makes a lot more sense. Education has 30x in price over the same time period (2). If you're comparing prices in dollars, it feels like education got really expensive compared to the basket of goods the BEA tracks but in reality, education requires less gold than it did in 1970. Our incredible supply chains and manufacturing automation have lowered most consumer prices such that we don't really notice inflation but when you look at things that can't get much cheaper like housing, healthcare, education, asset prices of all sorts, you can't miss the fact that they correlate more closely with gold than the USD."
(1) https://news.ycombinator.com/threads?id=dumbfoundded&next=29...
The main[1] answer to your riddle is that the economy grew about ~6x faster than we have been mining gold. The dollar is closer to being worth 7x less than 45x less.
> When we look at prices of things like education, housing, and healthcare, the 45x number makes a lot more sense. Education has 30x in price over the same time period (2).
The same amount of education isn't actually 30x more expensive.
Because you're not getting the same services in exchange for your money today, as you were 50 years ago.
If you drop the money-pit sports programs, the entirety of the administrative sector, the nice new dorm buildings, and account for reduction in public funding, you'll find that the growth in the cost of education is much closer to the cost of inflation.
It's not all that expensive, even in 2022, to stuff a group of young adults into a lecture hall and have an underpaid adjunct who doesn't even get health insurance read off Powerpoint slides to them for 15 hours a week. It's the everything else, most of which has nothing to do with education that costs money.
[1] The secondary answer to your riddle is that late-night-infomercial-manufactured demand from goldbugs and other morons can easily raise the price of gold significantly above where it 'ought' to be. Beanie babies, baseball cards, NFTs, shitcoins, etc.
> The main[1] answer to your riddle is that the economy grew about ~6x faster than we have been mining gold. The dollar is closer to being worth 7x less than 45x less.
How are you measuring it? It's a circular argument if you measure it in dollars. If it measure it in anything that can't be made more efficient due to automation & offshoring, it's no where near a 7x decrease.
> [1] The secondary answer to your riddle is that late-night-infomercial-manufactured demand from goldbugs and other morons can easily raise the price of gold significantly above where it 'ought' to be. Beanie babies, baseball cards, etc.
Gold is simply a good that's impossible to mass produce with technology. Use land, housing, healthcare, education or whatever you feel is most representative. Using toothpaste and tv's for CPI is a bad measurement in the last 50 years, our technology for mass producing them has lowered the true cost.
(1) https://educationdata.org/average-cost-of-college-by-year
(2) https://www.in2013dollars.com/Medical-care/price-inflation
(3) https://fred.stlouisfed.org/series/ASPUS
(4) https://www.statista.com/statistics/196400/average-value-of-...
Measure it in houses built, cars sold, concrete poured, steel refined, restaurant visits, number of people working in service industries. Measure it in color televisions and washing machines and computers sold and movies made, and the mountains of disposable crap that everyone fills their homes with. Or by looking at the skyline in Beijing in 1970, and today. The dollar is the currency of global trade, you have to print more of it to keep track with the global economy, just to prevent it from becoming a deflationary currency.
It may not less obvious if you live in the United States, but we make and consume more useful goods and services, much faster than we mine gold. That's why the cost of an ounce of gold can grow 50 times, while the cost of a loaf of bread can grow 5 times in the past 50 years.
> If it measure it in anything that can't be made more efficient due to automation & offshoring, it's no where near a 7x decrease.
Why not? The world's economy has grown by around that much in real value (Denominated in goods[1], not dollars) added in 50 years. [2]
> Use land, housing, healthcare, education or whatever you feel is most representative.
Land is speculative, you don't make more of it when the economy grows, and its price trends towards 1 divided by the interest rate. In a world of zero-interest, it trends towards infinity. A modern house requires a lot more economic inputs to go into it than a 1970s house. Likewise, the amount of waste and work that goes into healthcare, education, etc, has significantly increased over that same time period.
A better metric would be median wages[3], compared to productivity growth. Median family income in the US in 1970 was $9,870/year. Median family income today is ~$78,000. If there was zero productivity gain, and zero quality-of-life increases/decreases, this will tell us that a dollar today is worth ~8x less than a dollar back then.
But we have had productivity and quality of life increases. And you have to divide that 8x by whatever those multipliers were.
Gold is the weird outlier when it comes to the value of things, not the gold standard.
[1] 50 years ago, there were 200 million cars in the world. Today, there are ~1.4 billion. You can't tell me that the real product of the economy hasn't grown by something resembling that factor. Or that billions of people haven't been born, without economic growth. Or that billions of people haven't been lifted out of complete poverty, without real, per-capita economic growth.
[2] It's grown about 35x, when denominated in dollars. If we actually used gold for money, it would have been deflationary, to the tune of... Whatever real economic growth the world would have had. That amount of deflation would have been utterly horrifying.
[3] At the end of the day, the costs of all things are largely determined by wages. Plus a bit of profit margin for speculators, rentiers, and capitalists, but they take a much smaller slice of the pie.
"Almost crashed" is not the same as "crashed". 2008 Was a stress test and the system survived.
This is true: it is about making money, after all. Greed is a good thing.
Edit: I've recently seen a significant reduction of blatant crypto shilling posts from people like that on this forum (thanks to good moderation, and people calling them out on their lies, and linking to proof of their scams and well documented history of crimes).
For example, it's been ages since I've seen any posts here from the notorious scammer and spammer Richard "Dodge Dodge" Heart (whose real name is Richard J "Spam King" Schueler, winner of the "Golden Pump Award" for "Best New Scam" for his POS get-rich-quick pyramid scheme called "HEX"). He was trying to recruit and exploit unsuspecting developers here on HN to implement and operate his scams in exchange for promises of shitcoin equity.
https://bitcoin-takeover.com/deconstructing-richard-hearts-l...
https://learn.bybit.com/defi/what-is-hex-crypto/
https://protos.com/richard-hearts-curious-launch-of-hex-puls...
Oops, correction.
FTX, Coinbase and Kraken definitely aren't "a wretched hive of scum and villainy".
Dont worry, I have it right this time ...
Coinbase and Kraken definitely aren't "a wretched hive of scum and villainy".
https://www.investopedia.com/articles/00/100900.asp
Theres another fun one from an NYSE stock ...
In December 1996, Emanuel Pinez, the CEO of Centennial Technologies, and his management recorded that the company made $2 million in revenue from PC memory cards. However, the company was really shipping fruit baskets to customers. The employees then created fake documents as evidence that they were recording sales.
High likelihood we view these two similarly in the near future.
Coinbase also always had exorbitant fees compared to other exchanges (but who's looking "smart" now, those who paid the huge fees at Coinbase or those who were paying 0.000001% / operation at FTX and are now fucked?), which at least make it sound like making money on actual fees was their business model.
Now: Coinbase is leaking money by having revenues which fell and running costs through the roof.
But, in the short term, if FTX is gone and if Binance goes, Coinbase becomes number one. They're already number two and it's very likely that Coinbase's volume is real (contrarily to Binance).
Coinbase is a HN unicorn, US incorporated. The people behind it are known.
They may be behind a huge scam but somehow I don't think so.
Also I do really wonder: now that rates have gone up, they've got $53 bn actual USD bringing it a significant amount of money. Where's that money going? For a start they're not giving the yeld to people storing USDC in their own private wallet in a "your key / your coins" style. What about the USDC held at Coinbase for customers? Do they give yeld on that?
$53 bn or so is a lot of money with 4 to 5% yeld or something...
Doesn't the other poster's claim that the "Entire financial space" is corrupt and that "For every FTX or Binance there's an Enron or Deutch Bank ten times the size and just as villainous" undermine the claim that BNY Mellon is trustworthy?
I agree that USAA is a rare exception, but do you really trust BNY Mellon if the "Entire financial space" is corrupt, or is that just whataboutism that ignores the outrageously unprecedented and shill-droid-automated degree of unregulated untraceable corruption in the crypto space?
If you believe Coinbase is as rare and trustworthy an exception as USAA, then I've got some Trump NFT's to sell you!
And you may say that Madoff Securities didn't start out as a Ponzi scheme, federal investigators believe that it took until the 70s for it to start. Madoff claims the scams didn't start until the 90s.
So, "being around forever" isn't evidence of lack of fraud.
So the fact that Coinbase is entirely US based is also not a guarantee that it's not doing shady things.
And the implication DonHopkins was making is that every major actor in the crypto space is run by scam artists trying to defraud people of their money. There are no good actors.
It's not about the level of risk with regards to the structure of the company. It's about the people running it. And no manner of corporate structure is going to prevent people from simply lying. Which is what every fraud has to do at some point. By their very nature.
DonHopkins is saying since we can't trust the people running these companies, we can't trust these companies.
And the fact that they've been around for a while or are based solely in the US mean nothing when one of the largest financial scams ticked both of those boxes.
Forever? So dry behind the ears, are you?
>born out of the collapse of MtGox
The apple far from the tree falls, say you?
>very surprised
Not Jack's complete lack of what, are you?
> Be kind. Don't be snarky.