The crypto thread

[Samson]

Economic estimation of Bitcoin mining’s climate damages demonstrates closer resemblance to digital crude than digital gold

This paper provides economic estimates of the energy-related climate damages of mining Bitcoin (BTC), the dominant proof-of-work cryptocurrency. We provide three sustainability criteria for signaling when the climate damages may be unsustainable. BTC mining fails all three. We find that for 2016–2021: (i) per coin climate damages from BTC were increasing, rather than decreasing with industry maturation; (ii) during certain time periods, BTC climate damages exceed the price of each coin created; (iii) on average, each $1 in BTC market value created was responsible for $0.35 in global climate damages, which as a share of market value is in the range between beef production and crude oil burned as gasoline, and an order-of-magnitude higher than wind and solar power. Taken together, these results represent a set of sustainability red flags. While proponents have offered BTC as representing “digital gold,” from a climate damages perspective it operates more like “digital crude”.​

Spoiler Legend :

Bitcoin (BTC) mining’s climate damages as a share of coin market price (2016–2021), compared with full lifecycle analysis climate damages as a share of market price for other commodities (for a single year). Damages are expressed in percentage terms (% of market price). BTC climate damages only include energy use and emissions from running mining rigs, and do not include climate damages associated with cooling and manufacturing of mining rigs or other potential sources of carbon equivalent emissions. This makes estimated BTC damages a lower bound compared to the full lifecycle damages for the other commodities shown. Climate damages for the other commodities and economic products shown are calculated using lifecycle estimates from the peer-reviewed literature and US government agencies combined with publicly available price data. All commodity prices and lifecycle climate damage data are in the Supplementary Data.

 

[Samson]

As I understand it Celsius, which was a big crypto service/fund/scam holding $25 billion in October 2021, has gone bust and is filling for bankruptcy. As part of the bankruptcy filling them accidentally made public the the names and recent transactions of every user on the platform. Among other things it shows that the owner (Alex Mashinsky), his wife Krissy, and various other executives took millions out shortly before the company's collapse while claiming that nothing was wrong and taking more deposits. I think that is a little bit illegal.

Celsius exposes the names of all customers and their recent transactions in court filing – including their execs​

Celsius Network is undergoing bankruptcy proceedings after its impressive implosion earlier this year. Journalists at Gizmodo observed that the company's latest court filing was 14,532 pages long – because it contains the names and recent transactions of every user on the platform. It's not immediately clear how this came to pass, but someone messed up really, really badly.

Among those listed in the court filing were Alex Mashinsky, his wife Krissy, and various other executives. The records show that Mashinsky withdrew $10 million from Celsius shortly before the company's collapse, and his wife withdrew another $2 million. Chief Strategy Officer Daniel Leon also withdrew $7 million.​

• "Celsius Execs Cashed out at Least $17 Million in Crypto Before Halting Withdrawals for Customers [Updated]", Gizmodo

 

[Samson]

How many users does CFC have, and how much is it worth? Decentraland, a web site that uses crypto and supports 3D glasses (aka a Web3 metaverse) has 38 daily active users and is valued at $1.3 billion.

 

[Aiken_Drumn]

I alone am worth more than that, and growing by the hour!

Seriously though, how do they arrive at those valuations? Inventing another shilcoin and self deciding its value?

 

[Samson]

Looks like a day of hacks:

• Mango Markets suffers loss of more than $115 million and counting
• QANX Bridge suffers $1.16 million loss caused by the Profanity vanity address vulnerability
• Rabby Wallet's swap feature exploited a month after launch
• STAX Finance exploited for $2.3 million

 

[EnglishEdward]

Another bankrupcy, albeit of an exchange not a particular crypto-currency:

Crypto giant FTX collapses into bankruptcy

Sam Bankman-Fried also stepped down as chief executive, capping a tumultuous week for the firm.

www.bbc.co.uk

Embattled cryptocurrency exchange FTX has filed for bankruptcy in the US,
seeking court protection as it looks for a way to return money to users. Former boss
Sam Bankman-Fried has also stepped down as chief executive, the company said.

What I like is the application of nominative determinism e.g. with Bankman-Fried

The crypto world mirrors the real world where Bernie Madoff with the dosh.

 

[El_Machinae]

CNBC was pointing out (again) that it's only the intermediaries, the people who set up the way for you to gamble, that were actually getting rich.

 

[Samson]

First recorded case of NFT utility in existence

Users panicked when FTX stopped processing withdrawals, particularly those with substantial amounts of funds locked in the exchange. When the exchange tweeted that they had "begun to facilitate withdrawals of Bahamian funds", some saw an opportunity.​

​

Some observers noticed over $21 million withdrawn via NFT trades, that appeared to be being used as a way to bypass the internal blocks on users transferring balances to one another. People with funds locked in FTX bought NFTs from Bahamas-based users, spending their full account balance on the NFT and thus enabling the Bahamian user to then withdraw the funds. "This appears to be the first recorded case of NFT utility in existence ", wrote Cobie.​

​

"Any FTX employees willing to change my accounts country of residence to Bahamas to facilitate withdrawal I am offering $1 million and unlimited legal fees", wrote one trader (who later claimed to be joking).​

​

A popular crypto Twitter user named "Algod" offered $100,000 to any FTX employee who would process their KYC documents, allowing them to withdraw. He was subsequently seen to be successfully withdrawing over $2 million in assets from the platform. He also shared links to a Telegram group where his partner was offering to buy people's FTX accounts for 10¢ on the dollar, from customers who feared they may never see the money again, or would only regain access to a fraction of it after years of court proceedings. Algod later denied "erroneous and defamatory statements" that he'd bought discounted claims/assets", admitting that he'd considered it, but claiming he ultimately decided not to.​

 

[Kaitzilla]

Another bankrupcy, albeit of an exchange not a particular crypto-currency:

Crypto giant FTX collapses into bankruptcy

Sam Bankman-Fried also stepped down as chief executive, capping a tumultuous week for the firm.

www.bbc.co.uk

What I like is the application of nominative determinism e.g. with Bankman-Fried

The crypto world mirrors the real world where Bernie Madoff with the dosh.

This FTX bankruptcy is turning into a giant story.

A day after filing for bankruptcy, a huge amount of money vanished!

$515m is STOLEN from collapsed crypto exchange FTX in matter of hours

Internet sleuths have discovered that $515 million has disappeared from the accounts of collapsed crypto exchange FTX in 'suspicious circumstances.'

www.dailymail.co.uk

Tom Brady invested millions of dollars into FTX and did a commercial for them in September 2021.

Wait, Tom invested $10's of millions or more? Rumor.

Poor guy just got divorced, his football career is having trouble, and now all that money...



Larry David also did a commercial for FTX.

Was it all a Ponzi scheme?
Or was it a brilliant bank run instigated by their main competitor even though everything was legit?

 

[Lexicus]

Crypto is all a scam. If you can't see this, you are a mark.

 

[El_Machinae]

I long ago pushed for the idea that we should write legislation actually removing courts as an option when crypto is involved. Just let it be this huge Caveat Emptor experiment/example and stop subsidizing the very people trying to erode our currencies.

 

[Kaitzilla]

Crypto is all a scam. If you can't see this, you are a mark.

Here is the forum spiritual parent thread to all this started back in 2013.

What are your thoughts on BitCoin?

I saw something online about a software developer accepting BitCoins for their software. I don't really know all that much about it. So I thought, instead of doing the logical thing and Googling it or something, posting it here. What are your thoughts on BitCoin? Does it seem viable, or just...

forums.civfanatics.com

I had no faith in Bitcoin to start, and big regret for not buying one years later.

 

[Hygro]

Who are the banks that provided loans against exchanges’ own coins?

 

[RobAnybody]

Crypto is all a scam. If you can't see this, you are a mark.

I still don't think it's a scam, just... a collectible. My analogy has always been Beanie Babies*. Crypto/Beanie Babies only have worth that people perceive them to have. But that's not unusual. Sports cards, comic books*, stamps (do philatelists still... philatle? is that still a thing?). They are only valuable if other people perceive them to have value & want to possess them. None of them have intrinsic value.

While there are people who "hype" crypto (thanks, Matt Damon), I don't think they are truly scamming anyone. I'm sure there are counter-examples, just like there are counterfeit baseball card sellers, or people hawking fake copies of [insert valuable stamp, I have no idea]. But the idea was never a scam IMO - just best viewed as a speculative asset. I still have a few Etherium "coins" I'll just hold onto forever, or until they recover, or until they are worth $0 (likeliest event). Much like people still have their Beanie Babies from 25 years ago.

*just fwiw, I never got into Beanie Babies, which is why it's my go-to example, but I do collect/speculate on some "valuable" comics, so I try not to use that example too much because I have bias there

 

[Lexicus]

I still don't think it's a scam

Then you are a mark.

edit to elaborate:

But the idea was never a scam IMO

The idea is exactly what was always a scam. Remember, the idea of crypto was not "speculative asset" or "collector's item", it was to replace the banking system and fiat currency with [technobabble]. This was always a fool's game, the only people who believed in this promise either did not understand crypto, did not understand money, or both.

So all that was left as a "function" for crypto was to buy it in the belief that down the line some other sucker would pay you more for it than you paid.

And it doesn't stand comparison with beanie babies because I loved those as a kid. Good luck getting a child to love some virtual coins.

 

[El_Machinae]

I still don't think it's a scam, just... a collectible.

Owning gold also isn't a scam.
But if everyone was talking about how owning gold was a neat speculative idea .... and gold-holding facilities kept getting smoked where piles of the customers can't even get their own gold back out ... and all the due-diligence by people who're putting up tens of millions of dollars couldn't even tell ahead of time that they actually had way less solvency than they thought ... then 'scam' might be the right word.
Do you use a service or a piece of software that allows you to control the coins you hold? Can you transfer them without needing that piece of software?

 

[amadeus]

I wouldn’t recommend gold as an investment, but it does have the two advantages over crypto in that it’s (a.) not a pyramid scheme and (b.) can’t just oops disappear.

 

[RobAnybody]

I just don't think "scam" is the right word. Gold is also a good analogy. Gold has no intrinsic value. Meaning, as in, if I have a big gold bar & walk into a grocery store, I won't be able to buy anything. I have to go elsewhere to convert it into actual currency that I can use to buy things. Gold is also a speculative asset.

Then you are a mark.

I'm no more a mark for having bought a few Etherium coins as a speculative asset which has lost me about $900 since I bought them than I am an ingenious investor for buying New Mutants #98 (first appearance of Deadpool) in 9.8 graded condition for $300, while it goes for about $1,650 on ebay now. I viewed them both as speculative assets - one did well, the other did not. fwiw, if my Etherium ever went up like my New Mutants 98, I'd sell it immediately, while I have my "1st Deapool" on prominent display & do not want to sell it. My point is, I went into both with eyes wide open about what these things are - gambles. I never cared about the "blockchain" or how it'd "revolutionize how X is done" - don't care, never cared.

So all that was left as a "function" for crypto was to buy it in the belief that down the line some other sucker would pay you more for it than you paid.

And it doesn't stand comparison with beanie babies because I loved those as a kid. Good luck getting a child to love some virtual coins.

"buy it in the belief that down the line some other sucker would pay you more for it than you paid" - exactly - that's a speculative asset. That's how I always viewed it. As I mentioned, I never cared about the "blockchain"- I couldn't tell you what X even is in my above sentence. I viewed it, from the beginning, as something to speculate on, in hopes I could sell it for more later.

Also, I will have you know that my Transformers are so much better than your Beanie Babies!! (just kidding, of course) To this day, the only gun I have ever owned is a Walther P38 that transforms into Megatron.

 

[Kaitzilla]

The only good thing about crypto is you can flee your country with it easier than fleeing weighed down by gold bars that might not make it through the x-ray machine.

 

[Lexicus]

I just don't think "scam" is the right word. Gold is also a good analogy. Gold has no intrinsic value. Meaning, as in, if I have a big gold bar & walk into a grocery store, I won't be able to buy anything. I have to go elsewhere to convert it into actual currency that I can use to buy things. Gold is also a speculative asset.

Gold is a very conductive, ductile, corrosion-resistant metal that has many uses in industry and electronics.