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Every time these stories pop up, I'm amazed at how much infrastructure has built up around crypto. Entire websites with reporters that do nothing but cover cry

Every time these stories pop up, I'm amazed at how much infrastructure has built up around crypto. Entire websites with reporters that do nothing but cover crypto stories. Layers upon layers of derivatives built on top of coins I've never heard of, which themselves are built upon structures on top of ETH or BTC. Hedge funds. Analysts. Exchanges. Fintech. So much money swirling around a Greater Fool scam. Wall Street is bad enough. This is insanity.

el-salvador 4y ago
I has never heard about 3AC before. It's hard to keep up with so many acronyms. Can anyone recommend a paper or post that explains how it is linked?
- cecilpl2 4y ago
  3AC = Three Arrows Capital, the hedge fund the article is about.
- anonymoushn 4y ago
  3AC is a hedge fund that actively traded shitcoins on centralized and decentralized exchanges and bought locked tokens from newish projects (like a VC).
jiggawatts 4y ago
Reminds me of the good old days when World of Warcraft got so big that there was a substantial grey market for the in-game gold. At first, it was simple enough, forums where you could pay someone $10 with PayPal or whatever, and then they would meet you in-game and give you 1,000 game gold coins. Within just a few years there were large-scale "gold mining" operations set up in China, wholesalers, retailers, "forex" markets, etc... Nearly the entire modern economic ecosystem was set up around a game. At some point, if WoW was treated as a country, its "currency" would have ranked above quite a few real countries in terms of forex trading. If I remember correctly, it was bigger than 70 real nations. Crypto is the same, except times a thousand.
- dpedu 4y ago
  This is still happening, in WoW and other games, and has morphed into some pretty wild things - such as people in impoverished countries playing the games as a source of income. https://www.polygon.com/features/2020/5/27/21265613/runescape-is-helping-venezuelans-survive https://www.polygon.com/features/2020/5/27/21265613/runescap...
- asdff 4y ago
  That was true for runescape too, but it seemed like its ended entirely when you were able to sell membership bonds for in game gp on the grand exchange. Now its like, why go with a scammer website where they will scrape your info when you can give jagex $8 and have 60 mill in game in a few moments? Brilliant way to get around the issue imo and it practically acts like a stimulus package for the players so they don't have to run flax like I did for hours 15 years ago.
  - livueta 4y ago
    The thrust of your comment is accurate, though > it seemed like its ended entirely not quite: relative volume actually increased as a function of growing game popularity around the time of the introduction of bonds (http://crystalmathlabs.com/tracker/players.php http://crystalmathlabs.com/tracker/players.php - amusingly enough, this is currently serving me a first-party ad for goldbuying) but that obviously represented a slice of a previously-undivided pie. It's like legal weed: black markets still exist for those willing to forgo security and convenience for a deal. IIRC, black-market gold was 40-60% of the face price of a bond for the period I was active as a reasonably high volume swapper/seller. That kind of discount isn't worth it if you're buying 10m or a single prerolled joint or whatever, but generally makes sense in any kind of volume / if you've got the connections to mitigate the risk. But the analogy continues: if the black market is relegated to a fairly small proportion of the total pool of individuals who buy (weed|gp), even if a lot of the volume transactions aren't captured, many of its harms are mitigated as you don't have unsophisticated consumers smoking rat poison / getting their mom's credit card stolen / etc.
- jonah-archive 4y ago
  One of my all-time favorite examples of an alternate communication channel is when, their URL banned from in-game chat, gold sellers spelled it out in corpses on a hillside: https://www.reddit.com/r/wow/comments/2y2vb3/back_in_wrath_gold_sellers_used_to_suicide_in/ https://www.reddit.com/r/wow/comments/2y2vb3/back_in_wrath_g...
earnesti 4y ago
No, this is great. Great, great fun. Life is too short to keep playing boring traditional finance, better play with crypto where things are always interesting.
- elwell 4y ago
  I get the sentiment. Except... when you play a game of e.g. Monopoly it doesn't contribute to global economic collapse that affects real people that weren't even playing.
deleted 4y ago
[deleted]
ptmcc 4y ago
The Wall Street guys have piled in running schemes that they are unable to do in the normal banking world because it is regulated & insured. Most of the regulations have come from centuries of banking history, which the crypto world seems to be speed-running through right now, learning the hard way. There is plenty to criticize about the banking world, but crypto is indefensible at this point.
- gfodor 4y ago
  Crypto is speed running it because it is trying to get to the terminal state of finance, but regulated through software and cryptography instead of centralized governments that have a monopoly on violence. Time will tell if this is possible. Too many people seem certain it is, or isn’t. I think DeFi is insanely cool, if it manages to work.
wollsmoth 4y ago
it is amazing, but not surprising. So many major VC funds built around Crypto. Really interesting if it all crashes.
- clpm4j 4y ago
  I'd love to see some analysis (probably impossible at this point) of VCs on Twitter who added "crypto/web3" into their bios over the course of late 2021 through early 2022, and how many of them have deleted any reference to it since then.
  - wollsmoth 4y ago
    Oh, I imagine most of them are still defiantly bullish. The bottom hasn't completely dropped out yet. If the worst happens over the next few years though, it'd be interesting to see how quickly they drop off. This is an exciting time for that field.
deckard1 4y ago
the day they announced Crypto.com bought the naming rights to the Staples Center it really brought me back to the year 2000 dot-com bubble. It's even a dot-com! But this time... it's with crypto. It's the over-the-top silliness of it. Super Bowl Ads. Macy's Thanksgiving Day parade floats. Hundred million dollar naming rights deals. Writing Matt Damon a blank check (I hope he got one because, why else would you do this Matt?? Why Matt, why??)
- SantalBlush 4y ago
  The saddest part to me was watching Larry David feature in a crypto commercial.
- yieldcrv 4y ago
  Just as absurd as an office supply company named after an office supply doing the same thing The next generation will have fond memories at that stadium and won’t think about the name either
FabHK 4y ago
Yes. Funny thing is, in the real world, the trading and analysis has some purpose (steering share prices towards their "true" value, thus solving the capital allocation problem; aggregating time preferences & determining rates, thus solving the investment decision problem; allowing people with certain exposures to hedge themselves; etc.) But in crypto land, it's a pure cargo cult - a facade of finance and analysis, with nothing behind it.
wpietri 4y ago
You're right, but I think this also means that we should take another look at the similar encrustations around real economies. Part of the reason the cryptocurrency thing took off so thoroughly is that a lot of financialization was already in extremely tenuous contact with reality. It was easy enough to sever the link entirely and focus on pure dreams of digital gold. We need look no further than the 2008 financial crash for evidence of that; The Economist was reporting for years that there was clearly a lot of risk being shuffled around such that nobody was quite sure where it was. We all found out, but not until after a lot of the shufflers made their money and got out.
datadata 4y ago
What would invalidate your belief that it is all just a greater fool scam?
Jorge1o1 4y ago
Hundreds of developers, modelers, artists, and the like spent months working on NFT games, “digital land” and other projects that are sure to either get canceled or be commercial failures. Ironic how similar the crypto and traditional world is.

el-salvador 4y ago

I has never heard about 3AC before. It's hard to keep up with so many acronyms. Can anyone recommend a paper or post that explains how it is linked?

cecilpl2 4y ago
3AC = Three Arrows Capital, the hedge fund the article is about.
anonymoushn 4y ago
3AC is a hedge fund that actively traded shitcoins on centralized and decentralized exchanges and bought locked tokens from newish projects (like a VC).

jiggawatts 4y ago

Reminds me of the good old days when World of Warcraft got so big that there was a substantial grey market for the in-game gold. At first, it was simple enough, forums where you could pay someone $10 with PayPal or whatever, and then they would meet you in-game and give you 1,000 game gold coins. Within just a few years there were large-scale "gold mining" operations set up in China, wholesalers, retailers, "forex" markets, etc... Nearly the entire modern economic ecosystem was set up around a game. At some point, if WoW was treated as a country, its "currency" would have ranked above quite a few real countries in terms of forex trading. If I remember correctly, it was bigger than 70 real nations. Crypto is the same, except times a thousand.

dpedu 4y ago
This is still happening, in WoW and other games, and has morphed into some pretty wild things - such as people in impoverished countries playing the games as a source of income. https://www.polygon.com/features/2020/5/27/21265613/runescape-is-helping-venezuelans-survive https://www.polygon.com/features/2020/5/27/21265613/runescap...
asdff 4y ago
That was true for runescape too, but it seemed like its ended entirely when you were able to sell membership bonds for in game gp on the grand exchange. Now its like, why go with a scammer website where they will scrape your info when you can give jagex $8 and have 60 mill in game in a few moments? Brilliant way to get around the issue imo and it practically acts like a stimulus package for the players so they don't have to run flax like I did for hours 15 years ago.
- livueta 4y ago
  The thrust of your comment is accurate, though > it seemed like its ended entirely not quite: relative volume actually increased as a function of growing game popularity around the time of the introduction of bonds (http://crystalmathlabs.com/tracker/players.php http://crystalmathlabs.com/tracker/players.php - amusingly enough, this is currently serving me a first-party ad for goldbuying) but that obviously represented a slice of a previously-undivided pie. It's like legal weed: black markets still exist for those willing to forgo security and convenience for a deal. IIRC, black-market gold was 40-60% of the face price of a bond for the period I was active as a reasonably high volume swapper/seller. That kind of discount isn't worth it if you're buying 10m or a single prerolled joint or whatever, but generally makes sense in any kind of volume / if you've got the connections to mitigate the risk. But the analogy continues: if the black market is relegated to a fairly small proportion of the total pool of individuals who buy (weed|gp), even if a lot of the volume transactions aren't captured, many of its harms are mitigated as you don't have unsophisticated consumers smoking rat poison / getting their mom's credit card stolen / etc.
jonah-archive 4y ago
One of my all-time favorite examples of an alternate communication channel is when, their URL banned from in-game chat, gold sellers spelled it out in corpses on a hillside: https://www.reddit.com/r/wow/comments/2y2vb3/back_in_wrath_gold_sellers_used_to_suicide_in/ https://www.reddit.com/r/wow/comments/2y2vb3/back_in_wrath_g...

earnesti 4y ago

No, this is great. Great, great fun. Life is too short to keep playing boring traditional finance, better play with crypto where things are always interesting.

elwell 4y ago
I get the sentiment. Except... when you play a game of e.g. Monopoly it doesn't contribute to global economic collapse that affects real people that weren't even playing.

deleted 4y ago

[deleted]

ptmcc 4y ago

The Wall Street guys have piled in running schemes that they are unable to do in the normal banking world because it is regulated & insured. Most of the regulations have come from centuries of banking history, which the crypto world seems to be speed-running through right now, learning the hard way. There is plenty to criticize about the banking world, but crypto is indefensible at this point.

gfodor 4y ago
Crypto is speed running it because it is trying to get to the terminal state of finance, but regulated through software and cryptography instead of centralized governments that have a monopoly on violence. Time will tell if this is possible. Too many people seem certain it is, or isn’t. I think DeFi is insanely cool, if it manages to work.

wollsmoth 4y ago

it is amazing, but not surprising. So many major VC funds built around Crypto. Really interesting if it all crashes.

clpm4j 4y ago
I'd love to see some analysis (probably impossible at this point) of VCs on Twitter who added "crypto/web3" into their bios over the course of late 2021 through early 2022, and how many of them have deleted any reference to it since then.
- wollsmoth 4y ago
  Oh, I imagine most of them are still defiantly bullish. The bottom hasn't completely dropped out yet. If the worst happens over the next few years though, it'd be interesting to see how quickly they drop off. This is an exciting time for that field.

deckard1 4y ago

the day they announced Crypto.com bought the naming rights to the Staples Center it really brought me back to the year 2000 dot-com bubble. It's even a dot-com! But this time... it's with crypto. It's the over-the-top silliness of it. Super Bowl Ads. Macy's Thanksgiving Day parade floats. Hundred million dollar naming rights deals. Writing Matt Damon a blank check (I hope he got one because, why else would you do this Matt?? Why Matt, why??)

SantalBlush 4y ago
The saddest part to me was watching Larry David feature in a crypto commercial.
yieldcrv 4y ago
Just as absurd as an office supply company named after an office supply doing the same thing The next generation will have fond memories at that stadium and won’t think about the name either

FabHK 4y ago

Yes. Funny thing is, in the real world, the trading and analysis has some purpose (steering share prices towards their "true" value, thus solving the capital allocation problem; aggregating time preferences & determining rates, thus solving the investment decision problem; allowing people with certain exposures to hedge themselves; etc.) But in crypto land, it's a pure cargo cult - a facade of finance and analysis, with nothing behind it.

wpietri 4y ago

You're right, but I think this also means that we should take another look at the similar encrustations around real economies. Part of the reason the cryptocurrency thing took off so thoroughly is that a lot of financialization was already in extremely tenuous contact with reality. It was easy enough to sever the link entirely and focus on pure dreams of digital gold. We need look no further than the 2008 financial crash for evidence of that; The Economist was reporting for years that there was clearly a lot of risk being shuffled around such that nobody was quite sure where it was. We all found out, but not until after a lot of the shufflers made their money and got out.

datadata 4y ago

What would invalidate your belief that it is all just a greater fool scam?

Jorge1o1 4y ago

Hundreds of developers, modelers, artists, and the like spent months working on NFT games, “digital land” and other projects that are sure to either get canceled or be commercial failures. Ironic how similar the crypto and traditional world is.