tag:blogger.com,1999:blog-4503292949532760618.post317618917572982562..comments2024-03-16T18:42:21.178-07:00Comments on DSHR's Blog: Bitcoin vs. MadoffDavid.http://www.blogger.com/profile/14498131502038331594noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-4503292949532760618.post-60921885754010993622022-02-04T06:49:41.256-08:002022-02-04T06:49:41.256-08:00Via Yves Smith we find Adam Levitin's What Ha...Via <a href="https://www.nakedcapitalism.com/2022/02/what-happens-if-a-cryptocurrency-exchange-files-for-bankruptcy.html" rel="nofollow">Yves Smith</a> we find Adam Levitin's <a href="https://www.creditslips.org/creditslips/2022/02/what-happens-if-a-cryptocurrency-exchange-files-for-bankruptcy.html" rel="nofollow"><i> What Happens If a Cryptocurrency Exchange Files for Bankruptcy?</i></a>. They are both well worth reading, but Levitin's conclusion sums it up:<br /><br />"The big point here is the if you are a customer of a cryptocurrency exchange, you risk being a general unsecured creditor of the exchange if it should file for bankruptcy. It doesn’t matter that the exchange’s contract with you says that you “own” the currency. That’s not determinative of what will happen in bankruptcy. If you’re a cryptocurrency exchange customer you’re actually in a <i>worse</i> position than if you dealt with a traditional financial institution for a bank deposit or security, as the exchange is not regulated for safety-and-soundness and there’s no insurance protecting your assets."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-88661533015733936452022-01-26T07:32:11.372-08:002022-01-26T07:32:11.372-08:00Sohale Andrus Mortazavi jeremiad Cryptocurrency Is...Sohale Andrus Mortazavi jeremiad <a href="https://jacobinmag.com/2022/01/cryptocurrency-scam-blockchain-bitcoin-economy-decentralization" rel="nofollow"><i>Cryptocurrency Is a Giant Ponzi Scheme</i></a> is a good overview:<br /><br />"Given that cryptocurrencies don’t produce anything of material value, this enormous waste of resources renders the whole enterprise a negative-sum game. Investors can only cash out by selling their coins to other investors — but only after the miners and various cryptocurrency service providers take the house’s rake. In other words, investors cannot — in the aggregate — cash out for even what they put in, as cryptocurrencies are inefficient by design."<br /><br />And:<br /><br />"Going after fly-by-night stablecoin issuers will devolve into a hopeless game of whack-a-mole. The only real solution is to ban the trade of private cryptocurrencies entirely. We cannot stop foreign actors from issuing unbacked stablecoins and manipulating crypto prices on unregulated exchanges. But we can make it illegal to sell cryptocurrencies on banked exchanges, such as Coinbase, operating entirely legally while they cash people out of the Ponzi scheme."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-53464310259953030292022-01-24T16:06:40.271-08:002022-01-24T16:06:40.271-08:00Jemima Kelly has the good news for Bitcoin in Cryp...Jemima Kelly has the <i>good</i> news for Bitcoin in <a href="https://www.ft.com/content/0f3815da-861c-4274-ba5f-fa2d6c377baf" rel="nofollow"><i>Crypto is crashing but it’s all going to be OK, OK?</i></a>:<br /><br />"Bitcoin, the king of the land, is changing hands at just over $33,000 — about 51 per cent down from the record high it reached in November. Ethereum, the wise sage, is trading around $2,200 — about 54 per cent down since November. Dogecoin, the court jester, is under 13 cents, having lost 82 per cent since May. Meanwhile Elon Musk, the omnipotent technoking, is throwing around terms like <a href="https://twitter.com/elonmusk/status/1484456594775678976" rel="nofollow">“crypto scammers”</a> as if Tesla hadn’t bought $1.5bn of bitcoin; or the car company wasn’t <a href="https://www.tesla.com/en_GB/support/dogecoin" rel="nofollow">accepting</a> Doge as a form of payment."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-39630831179900633432022-01-04T06:21:37.613-08:002022-01-04T06:21:37.613-08:00Giacomo De Nicola's abstract for On the Intrad...Giacomo De Nicola's abstract for <a href="https://doi.org/10.5195/LEDGER.2021.213" rel="nofollow"><i>On the Intraday Behavior of Bitcoin</i></a> reveals that:<br /><br />"our most interesting finding is the unusual presence of significant negative first-order autocorrelation of returns calculated on medium-frequency timeframes, such as one, two and four hours, signaling the presence of systematic mean reversion. It is also found that larger price movements lead to stronger reversals, in percentage terms. We finally point out the potential exploitability of the phenomenon by implementing a basic algorithmic trading strategy and retroactively applying it to the data. We explain the findings mainly through (i) investor and trader overreaction, (ii) excess volatility and (iii) cascading liquidations due to excessive use of leverage by market participants."David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-36800093137885362122022-01-02T06:53:02.660-08:002022-01-02T06:53:02.660-08:00A new record high-speed rug-pull - less than six h...A new <a href="https://twitter.com/cat5749/status/1476813266462539779" rel="nofollow">record high-speed rug-pull</a> - less than six hours to yield more than 30ETH, or over $100K. Note how the security of these "smart contracts" depends upon fallible humans "auditing" them for vulnerabilities. Log4j shows how well this works in the real world.David.https://www.blogger.com/profile/14498131502038331594noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-76389174244051652332021-12-31T17:02:10.587-08:002021-12-31T17:02:10.587-08:00i enjoy david's critiques but i find the conti...i enjoy david's critiques but i find the continued equation of bitcoin (or the whole crypto space) with a ponzi quite baffling and not very helpful. imho, bitcoin and other crypto continue to exist because a growing number of people believe (right or wrong) it will offer new services and technologies that could enable new forms of social and economic organisation and solve problems with the "status quo".<br /><br />the ecosystem today seems very different to when i wrote it off myself in 2014. it supports a growing legion of very smart, mostly young and admittedly naive devs and is literally awash with experimentation and innovation and lots and lots of money, most of which seems to be coming from early adopters and traditional VC, not retail suckers, although i need to do research on this.<br /><br />yes, most if not all of these ideas are stupid or the implementations are broken right now and of course there are various unethical actors in the space due to lack of regulation but i feel it's far too simplistic at this point to say it's "just a ponzi". the chances of it crashing down to zero as the FT article posits seem to me to be rapidly approaching zero.<br /><br />i'm still skeptical on what useful and "legitimate" or "acceptable" solutions will come from it (there's no doubt there are quite a few "illegitimate" things it is *useful* for) so i'm trying to learn as much as i can about what people in the space are actually discussing and building rather than dismissing it outright.<br /><br />i'm interested to know what regulation you think would be useful that wouldn't completely kill the whole ecosystem? or do you think it should be killed? if so, do you not think the regulatory burden to make that happen will be *enormous*?billywhizzhttps://www.blogger.com/profile/12164174598577012452noreply@blogger.comtag:blogger.com,1999:blog-4503292949532760618.post-17839991376451433052021-12-29T06:23:45.074-08:002021-12-29T06:23:45.074-08:00I find your, and similar, analyses very convincing...I find your, and similar, analyses very convincing. So ... don't you find it maddening that Bitcoin, other cryptocurrencies, and now NFT's can stay irrational for so long? I've been convinced by Roubini in 2011 that Bitcoin was a scam, but I'm hopelessly waiting for the crash. The fact that big influencers like Taleb are anti-bitcoin, doesn't make a difference. How does that make you feel? (I'll omit the obligatory Keynes quote.)uair01https://www.blogger.com/profile/14538242264866015155noreply@blogger.com