Few of us civilians have much understanding of Bitcoin or arbitrage or the Fed or other abstractions of high finance. I don't understand these things either. But I do understand the inherent pitfalls of fiat currencies which can be arbitrarily created, and so I look with interest upon other ways to store value. It's the inherent distrust…
Few of us civilians have much understanding of Bitcoin or arbitrage or the Fed or other abstractions of high finance. I don't understand these things either. But I do understand the inherent pitfalls of fiat currencies which can be arbitrarily created, and so I look with interest upon other ways to store value. It's the inherent distrust of paper that led to the historical gold standard, and likewise drives interest in crypto (Bitcoin cannot be arbitrarily expanded like modern dollars are)...and crypto would be, IN THEORY, less vulnerable to theft than physical gold.
The fundamental question here: Is there a way to simply store value, not to make gains but just to avoid losses, without taking on risk? Is that too much to ask for?
With respect to SBF and FTX...here's the brief summary I heard elsewhere, and please correct me if I'm wrong: FTX and Alameda were two separate, and entirely different, funds, both managed by SBF and his associates. Alameda was a hedge fund, inherently risky, with the possibility of major gains or major losses. FTX was a convenient storehouse for crypto, supposedly subject to no disruptions beyond the fluctuations of the specific cryptocurrency. But Alameda messed up catastrophically and the fund was about to go bust. Rather than confess to the disaster, management tapped into the FTX funds in order to shore up the failing Alameda fund. This was the criminal act, the illegal appropriation of secure FTX funds to save the failing hedge fund. And the gamble failed, and Alameda went broke leaving FTX a looted shell. Is that an approximate explanation of what went down?
Few of us civilians have much understanding of Bitcoin or arbitrage or the Fed or other abstractions of high finance. I don't understand these things either. But I do understand the inherent pitfalls of fiat currencies which can be arbitrarily created, and so I look with interest upon other ways to store value. It's the inherent distrust of paper that led to the historical gold standard, and likewise drives interest in crypto (Bitcoin cannot be arbitrarily expanded like modern dollars are)...and crypto would be, IN THEORY, less vulnerable to theft than physical gold.
The fundamental question here: Is there a way to simply store value, not to make gains but just to avoid losses, without taking on risk? Is that too much to ask for?
With respect to SBF and FTX...here's the brief summary I heard elsewhere, and please correct me if I'm wrong: FTX and Alameda were two separate, and entirely different, funds, both managed by SBF and his associates. Alameda was a hedge fund, inherently risky, with the possibility of major gains or major losses. FTX was a convenient storehouse for crypto, supposedly subject to no disruptions beyond the fluctuations of the specific cryptocurrency. But Alameda messed up catastrophically and the fund was about to go bust. Rather than confess to the disaster, management tapped into the FTX funds in order to shore up the failing Alameda fund. This was the criminal act, the illegal appropriation of secure FTX funds to save the failing hedge fund. And the gamble failed, and Alameda went broke leaving FTX a looted shell. Is that an approximate explanation of what went down?