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Google, amazon, yahoo and Microsoft all benefited greatly from the early 2000 tech crash in that they had a lot of cash and were able to hire alot of really goo

Google, amazon, yahoo and Microsoft all benefited greatly from the early 2000 tech crash in that they had a lot of cash and were able to hire alot of really good tech talent that was suddenly out of a job. Looks like FTX and Binance are about to leave their competition in the dust in this crypto winter. Coinbase seems to have thrown in the towel for now. I would have thought they would see this as an opportunity but their fiscal situation must be alot worse than they are letting on. Which is strange because I would have thought they were better capitalized that they are letting on. We're watching as closely as we can to see if they have alot of bad loans outstanding to failing firms. With Voyager about to go under, Celsius just hiring a firm to guide them through bankruptcy and several other minor firms already going under there will be no shortage of tech talent available to well run firms. When we come out of this downturn in a year or two FTX and Binance are going to be even larger giants than they are now. With no real government oversite over those firms to limit their growth, the next crypto crash could be because one of those two gets into trouble. Another dark horse candidate is Goldman Sachs, they are well capitalized. Look for them to start to buy up distressed crypto assets and go into the next bull market in(probably 2024) as a big crypto player for institutional clients, and possibly for retail under their Marcus brand.

thematrixturtle 4y ago
Binance is in all sorts of legal trouble and FTX has made investments in all sorts of sketchy things. Odds are quite high that either or both blow up before this is over.
dehrmann 4y ago
> yahoo and Microsoft Those two stagnated (at best) in the aughts. Google was taking Yahoo's lunch, and Microsoft had no web vision and was tied up in antitrust headaches.
- daniel-cussen 4y ago
  Yeah and Ballmer screaming every time Google poached someone.
- jsjohnst 4y ago
  > Google was taking Yahoo's lunch For nearly half the aughts they weren’t even really competitors in the same market. It wasn’t until the latter half of the decade that Yahoo! even tried to be a search company competing with Google and Yahoo! had a definitive lead ahead of Google in mail, finance, etc for virtually all of the decade.
radicaldreamer 4y ago
FTX and Binanace will win because they actually invested in infra and efficiency when building out their products during the good times. They'll reap outsized benefits during the downturn.
hrgiger 4y ago
I skipped binance interview in the past when there was no crisis, their assignment: Design and code a Content Management System (CMS) for Binance. The CMS would used to post articles for the public. The current Binance site supports up to 17 different languages. Each article would have some translations but not all articles have all of the 17 translations. Design and code a RESTful API for the CMS. The user of the CMS would need to input the different translations for the same article. Design a user interface to facilitate this. We would only be looking at the functionalities of the user interface, so do not spend too much time on the design aspects. Derive your own data model as deem fit. The preferred language for backend is Java and frontend is JavaScript though you are free to choose any other languages as well as frameworks. Submit the code as a GitHub repository and make sure that the GitHub repository is public. Remember to add a README file for instructions on how to run the application and explanations (if any).
- Animats 4y ago
  This was for a job interview? They wanted you to write an entire content management system for them? For free?
  - hrgiger 4y ago
    Yep , didnt even answer, I had similar interviews solving company problems but that one takes the lead, I still keep the email, hope someone from their team will read so they can re-calibrate their view
  - daniel-cussen 4y ago
    They get crazy entitled during bear markets. It happened to me with Square in 2011, they wanted like an app to prove my skills just to get an interview. Like a full-on mobile app just to prove how hard I wanted the job. Thing is, let it be known, every homework you do for a company lowers your salary by 3%. Unless you charge, then it doesn't, it's weird like picking up money off the street. Just bad signaling, it's against your interest.
- ralston3 4y ago
  Wow. They really weren't trying to hide the fact that (1) They were actively building a CMS in-house at the time, and (2) They thought they did such a good job building said CMS, that they'd check your work vs their own no doubt stunning/transformative in-house work. XD
ditonal 4y ago
Coinbase way, way overhired and way overpaid for a weak senior leadership team. I’m not a fan personally of Brian Armstrong or Sam Bankman but the difference in leadership skill is night and day. Armstrong was in the right place at the right time following the Mt Gox collapse but he’s clearly in way over his head now, but he got his money so I doubt cares.
- reiichiroh 4y ago
  His actual name is Bankman?
  - bigcat12345678 4y ago
    Bankman refers to SBF the leader of ftx
  - solveit 4y ago
    Bankman-Fried, but yes, Bankman is actually his (and his father's) legal name. Talk about nominative determinism.
Ekaros 4y ago
Do they need to hire lot of people? Or should they try to run it as lean profitable business? The big players are in multiple things, but I'm not entirely sure that really makes sense for everyone. Will be actually see end of growing head counts for sake of growing them soon?
- glenngillen 4y ago
  Founder of FTX has publicly said he thinks most tech companies have way too many staff (by a couple of order of magnitude I think he said?). FTX has something like 30 people, and that’s how he likes it.
  - daniel-cussen 4y ago
    That was also what Paul Graham did, had very few employees compared to competitors.
ceeplusplus 4y ago
Coinbase is probably exposed about as much to retail as Robinhood is, and judging by Robinhood's monthly trading volumes [1] which are down anywhere from 60-95% depending on your reference point, Coinbase revenues have probably dropped off a cliff. [1] https://s28.q4cdn.com/948876185/files/doc_downloads/2022/06/May-2022-Metrics.pdf https://s28.q4cdn.com/948876185/files/doc_downloads/2022/06/...
- fooobar124 4y ago
  Retail trading in crypto is down ~90-95% at the moment. Source: know several of the largest market makers on the big retail exchanges.
nikanj 4y ago
Possibly they were stupid enough to get high on their own supply, and kept operating capital in cryptos instead of USD. I would be terrified too, if my business lost over 50% of it’s cash reserves. Or rather they still have the BTC, but it’s worth one third of peak
- Animats 4y ago
  Possibly they were stupid enough to get high on their own supply, and kept operating capital in cryptos instead of USD. This is a classic mistake of banks. When allowed to do so, they think they can improve their returns by running trading desks. That's why we in the US used to have Glass-Stegall, which kept banks and brokerages separate. Because, before and after Glass-Stegall, banks got into trouble that way. Nobody runs a pure crypto exchange that doesn't trade for their own account. Crypto exchanges are depository institutions, asset custodians, brokers, lenders, market makers, and exchanges. All those customer assets, just waiting to be exploited.
Animats 4y ago
Unclear. The whole crypto boom may have been an artifact of low interest rates. The junk bond part ("staking", etc.) definitely was. As I point out occasionally, most retail financial scams appeared in the 17th through 19th centuries, as newspapers made it possible to reach large numbers of suckers. There's not much innovation. Most of crypto is the same old scams, repackaged. Look up "bucket shop", "blind pool", "tulip mania", "Mississippi bubble", "Florida real estate scam", and "high yield investment program". Those alone cover most of crypto. There have been overhyped tech booms many times in history, but most actually did something, such as build canals or railroads or electric utilities or networks. The crypto community has accomplished very little in the real world.
- idiotsecant 4y ago
  These booms have happened before, complete with distributed finance boom and bust cycle, exploitative rugpull projects, and community mania. They just get a little bit bigger each time.
  - this_user 4y ago
    They can only get bigger if you can reach a new population of suckers with each new cycle. But crypto is probably at the point where anyone who can operate a computer, has heard of it. Plus, with how many regular people have lost a lot of money, and are still losing more, a major regulatory crackdown is just a matter of time now. And that will cripple most of the crypto ecosystem.
    - fny 4y ago
      But there's going to be a new Ponzi, there always is. It's just a matter of finding what the grifters latch onto next.
- bogomipz 4y ago
  >"The junk bond part ("staking", etc.) definitely was." Might you or someone else explain what staking is? Is this an overloaded term in crypto? I know that there is proof of stake that is used for consensus but I'm guessing this is not the same thing? Is staking a Defi offering?
jjtheblunt 4y ago
> Look for them to start to buy up distressed crypto assets What makes you think they're interested at all?
- jjtheblunt 4y ago
  Interesting timing : https://www.morningstar.com/news/dow-jones/202206247121/goldman-sachs-looks-to-raise-2-billion-to-buy-celsius-networks-assets-coindesk-says https://www.morningstar.com/news/dow-jones/202206247121/gold... perhaps they'd be interested in leveraging the funds of others to flip assets, for example?
- cmckn 4y ago
  https://fortune.com/2022/06/24/goldman-sachs-celsius-assets-crypto/ https://fortune.com/2022/06/24/goldman-sachs-celsius-assets-...
- ntoskrnl 4y ago
  Why wouldn't they be interested in $billions of assets priced at pennies on the dollar?
  - jjtheblunt 4y ago
    What if they decide their intrinsic value is 0.
    - ntoskrnl 4y ago
      It's unlikely Goldman would spend billions to acquire something with no value. https://news.ycombinator.com/item?id=31870422 https://news.ycombinator.com/item?id=31870422
    - codehalo 4y ago
      Goldman Sachs is not Hacker News.
jacquesm 4y ago
> When we come out of this downturn in a year or two That's a pretty big assumption right there.
puranjay 4y ago
Coinbase is being very poorly led. They haven't innovated at all and they're confused as to who their target customers are. The brief mainstream retail rush has thrown them off. The target customers for crypto are other investors, degens, and gamblers. Most of the money in crypto is house money, i.e. money that was made from existing crypto investments. Just see the transaction volume on OpenSea (decentralized ETH house money) vs CoinBase's NFT marketplace. Retail neither cares nor has the money for shitty jpegs. FTX understands the target market. Which is why it has focused so aggressively on futures. You can short/long practically everything on FTX with leverage. That's the investor/degen/gambler class - the bulk of money in crypto. Binance doesn't do anything extremely well, but whatever it does, it simply works. Withdrawals work, support is clumsy but works, perps work, spot trading works, even their awful chain, as full of scams as it might be, works.
MrMan 4y ago
This is such a terrible comment. Think about the landscape of exchanges globally. TSE, SiMex,Globex, ICE, NYSE, LIFFE LME, Eurex, etc etc etc. If FTX is an exchange, then they make more money when volume is up and less money when it is down. Just like all exchanges. If the holding company Alameda that owns FTX is a market maker, they make more money when volume is up, spreads are wide. They may or may not do well during herding events like crashes, but market makers don't like directional vol. If any of these players are arbitrageurs, where do their arbs come from? Why do they persist? I think most of the edge comes from retail flow. This is a trading business. What makes you think that any exchange has an edge that is unique in a downturn that makes it like Amazon or Microsoft? Neither of those companies run a trading exchange. Why the romantic anthropomorpgic narrative surrounding trading exchanges? Historically it's a good but not amazing business. There is secular growth, but it tends to be highly constrained and it's a very competitive environment. Does FTX have better infrastructure or risk management than ICE or CME? Or just better press at the moment.
- daniel-cussen 4y ago
  Solid analysis.
- avrionov 4y ago
  You seems to know a lot about the exchanges. D you think coinmarketcap numbers are real [1]? The parent comment was about FTX and Binance compared to the other crypto exchanges not to the exchanges in general. FTX claims to be way more efficient than Coinbase - having only 25 engineers compared to thousands for coinbase. This could be secret of the surviving exchanges - efficiency. [1] https://coinmarketcap.com/rankings/exchanges/ https://coinmarketcap.com/rankings/exchanges/
  - ordinaryradical 4y ago
    Coin market cap volume numbers are known to be easy to manipulate, but exchanges like FTX and Coinbase do not likely engage in these kinds of manipulations as they don’t seek to legitimize themselves through nonexistent volume anymore. But the lesser known exchanges that appear on there are likely pumping their numbers. I have heard Coingecko’s ranking eliminates some of the volume pumping tricks but have little to back up that claim: https://www.coingecko.com/en/exchanges https://www.coingecko.com/en/exchanges
simonebrunozzi 4y ago
You assume there should be another crypto Spring. I suggest you to consider that maybe this winter is going to last forever.
solarkraft 4y ago
That scenario assumes that crypto currencies as a whole will still be interesting by then. I have doubts about real use cases being found and regulators are clamping down on it too. People should now also have realized that it's not a hedge against the market or inflation at all.

thematrixturtle 4y ago

Binance is in all sorts of legal trouble and FTX has made investments in all sorts of sketchy things. Odds are quite high that either or both blow up before this is over.

dehrmann 4y ago

> yahoo and Microsoft Those two stagnated (at best) in the aughts. Google was taking Yahoo's lunch, and Microsoft had no web vision and was tied up in antitrust headaches.

daniel-cussen 4y ago
Yeah and Ballmer screaming every time Google poached someone.
jsjohnst 4y ago
> Google was taking Yahoo's lunch For nearly half the aughts they weren’t even really competitors in the same market. It wasn’t until the latter half of the decade that Yahoo! even tried to be a search company competing with Google and Yahoo! had a definitive lead ahead of Google in mail, finance, etc for virtually all of the decade.

radicaldreamer 4y ago

FTX and Binanace will win because they actually invested in infra and efficiency when building out their products during the good times. They'll reap outsized benefits during the downturn.

hrgiger 4y ago

I skipped binance interview in the past when there was no crisis, their assignment: Design and code a Content Management System (CMS) for Binance. The CMS would used to post articles for the public. The current Binance site supports up to 17 different languages. Each article would have some translations but not all articles have all of the 17 translations. Design and code a RESTful API for the CMS. The user of the CMS would need to input the different translations for the same article. Design a user interface to facilitate this. We would only be looking at the functionalities of the user interface, so do not spend too much time on the design aspects. Derive your own data model as deem fit. The preferred language for backend is Java and frontend is JavaScript though you are free to choose any other languages as well as frameworks. Submit the code as a GitHub repository and make sure that the GitHub repository is public. Remember to add a README file for instructions on how to run the application and explanations (if any).

Animats 4y ago
This was for a job interview? They wanted you to write an entire content management system for them? For free?
- hrgiger 4y ago
  Yep , didnt even answer, I had similar interviews solving company problems but that one takes the lead, I still keep the email, hope someone from their team will read so they can re-calibrate their view
- daniel-cussen 4y ago
  They get crazy entitled during bear markets. It happened to me with Square in 2011, they wanted like an app to prove my skills just to get an interview. Like a full-on mobile app just to prove how hard I wanted the job. Thing is, let it be known, every homework you do for a company lowers your salary by 3%. Unless you charge, then it doesn't, it's weird like picking up money off the street. Just bad signaling, it's against your interest.
ralston3 4y ago
Wow. They really weren't trying to hide the fact that (1) They were actively building a CMS in-house at the time, and (2) They thought they did such a good job building said CMS, that they'd check your work vs their own no doubt stunning/transformative in-house work. XD

ditonal 4y ago

Coinbase way, way overhired and way overpaid for a weak senior leadership team. I’m not a fan personally of Brian Armstrong or Sam Bankman but the difference in leadership skill is night and day. Armstrong was in the right place at the right time following the Mt Gox collapse but he’s clearly in way over his head now, but he got his money so I doubt cares.

reiichiroh 4y ago
His actual name is Bankman?
- bigcat12345678 4y ago
  Bankman refers to SBF the leader of ftx
- solveit 4y ago
  Bankman-Fried, but yes, Bankman is actually his (and his father's) legal name. Talk about nominative determinism.

Ekaros 4y ago

Do they need to hire lot of people? Or should they try to run it as lean profitable business? The big players are in multiple things, but I'm not entirely sure that really makes sense for everyone. Will be actually see end of growing head counts for sake of growing them soon?

glenngillen 4y ago
Founder of FTX has publicly said he thinks most tech companies have way too many staff (by a couple of order of magnitude I think he said?). FTX has something like 30 people, and that’s how he likes it.
- daniel-cussen 4y ago
  That was also what Paul Graham did, had very few employees compared to competitors.

ceeplusplus 4y ago

Coinbase is probably exposed about as much to retail as Robinhood is, and judging by Robinhood's monthly trading volumes [1] which are down anywhere from 60-95% depending on your reference point, Coinbase revenues have probably dropped off a cliff. [1] https://s28.q4cdn.com/948876185/files/doc_downloads/2022/06/May-2022-Metrics.pdf https://s28.q4cdn.com/948876185/files/doc_downloads/2022/06/...

fooobar124 4y ago
Retail trading in crypto is down ~90-95% at the moment. Source: know several of the largest market makers on the big retail exchanges.

nikanj 4y ago

Possibly they were stupid enough to get high on their own supply, and kept operating capital in cryptos instead of USD. I would be terrified too, if my business lost over 50% of it’s cash reserves. Or rather they still have the BTC, but it’s worth one third of peak

Animats 4y ago
Possibly they were stupid enough to get high on their own supply, and kept operating capital in cryptos instead of USD. This is a classic mistake of banks. When allowed to do so, they think they can improve their returns by running trading desks. That's why we in the US used to have Glass-Stegall, which kept banks and brokerages separate. Because, before and after Glass-Stegall, banks got into trouble that way. Nobody runs a pure crypto exchange that doesn't trade for their own account. Crypto exchanges are depository institutions, asset custodians, brokers, lenders, market makers, and exchanges. All those customer assets, just waiting to be exploited.

Animats 4y ago

Unclear. The whole crypto boom may have been an artifact of low interest rates. The junk bond part ("staking", etc.) definitely was. As I point out occasionally, most retail financial scams appeared in the 17th through 19th centuries, as newspapers made it possible to reach large numbers of suckers. There's not much innovation. Most of crypto is the same old scams, repackaged. Look up "bucket shop", "blind pool", "tulip mania", "Mississippi bubble", "Florida real estate scam", and "high yield investment program". Those alone cover most of crypto. There have been overhyped tech booms many times in history, but most actually did something, such as build canals or railroads or electric utilities or networks. The crypto community has accomplished very little in the real world.

idiotsecant 4y ago
These booms have happened before, complete with distributed finance boom and bust cycle, exploitative rugpull projects, and community mania. They just get a little bit bigger each time.
- this_user 4y ago
  They can only get bigger if you can reach a new population of suckers with each new cycle. But crypto is probably at the point where anyone who can operate a computer, has heard of it. Plus, with how many regular people have lost a lot of money, and are still losing more, a major regulatory crackdown is just a matter of time now. And that will cripple most of the crypto ecosystem.
  - fny 4y ago
    But there's going to be a new Ponzi, there always is. It's just a matter of finding what the grifters latch onto next.
bogomipz 4y ago
>"The junk bond part ("staking", etc.) definitely was." Might you or someone else explain what staking is? Is this an overloaded term in crypto? I know that there is proof of stake that is used for consensus but I'm guessing this is not the same thing? Is staking a Defi offering?

jjtheblunt 4y ago

> Look for them to start to buy up distressed crypto assets What makes you think they're interested at all?

jjtheblunt 4y ago
Interesting timing : https://www.morningstar.com/news/dow-jones/202206247121/goldman-sachs-looks-to-raise-2-billion-to-buy-celsius-networks-assets-coindesk-says https://www.morningstar.com/news/dow-jones/202206247121/gold... perhaps they'd be interested in leveraging the funds of others to flip assets, for example?
cmckn 4y ago
https://fortune.com/2022/06/24/goldman-sachs-celsius-assets-crypto/ https://fortune.com/2022/06/24/goldman-sachs-celsius-assets-...
ntoskrnl 4y ago
Why wouldn't they be interested in $billions of assets priced at pennies on the dollar?
- jjtheblunt 4y ago
  What if they decide their intrinsic value is 0.
  - ntoskrnl 4y ago
    It's unlikely Goldman would spend billions to acquire something with no value. https://news.ycombinator.com/item?id=31870422 https://news.ycombinator.com/item?id=31870422
  - codehalo 4y ago
    Goldman Sachs is not Hacker News.

jacquesm 4y ago

> When we come out of this downturn in a year or two That's a pretty big assumption right there.

puranjay 4y ago

Coinbase is being very poorly led. They haven't innovated at all and they're confused as to who their target customers are. The brief mainstream retail rush has thrown them off. The target customers for crypto are other investors, degens, and gamblers. Most of the money in crypto is house money, i.e. money that was made from existing crypto investments. Just see the transaction volume on OpenSea (decentralized ETH house money) vs CoinBase's NFT marketplace. Retail neither cares nor has the money for shitty jpegs. FTX understands the target market. Which is why it has focused so aggressively on futures. You can short/long practically everything on FTX with leverage. That's the investor/degen/gambler class - the bulk of money in crypto. Binance doesn't do anything extremely well, but whatever it does, it simply works. Withdrawals work, support is clumsy but works, perps work, spot trading works, even their awful chain, as full of scams as it might be, works.

MrMan 4y ago

This is such a terrible comment. Think about the landscape of exchanges globally. TSE, SiMex,Globex, ICE, NYSE, LIFFE LME, Eurex, etc etc etc. If FTX is an exchange, then they make more money when volume is up and less money when it is down. Just like all exchanges. If the holding company Alameda that owns FTX is a market maker, they make more money when volume is up, spreads are wide. They may or may not do well during herding events like crashes, but market makers don't like directional vol. If any of these players are arbitrageurs, where do their arbs come from? Why do they persist? I think most of the edge comes from retail flow. This is a trading business. What makes you think that any exchange has an edge that is unique in a downturn that makes it like Amazon or Microsoft? Neither of those companies run a trading exchange. Why the romantic anthropomorpgic narrative surrounding trading exchanges? Historically it's a good but not amazing business. There is secular growth, but it tends to be highly constrained and it's a very competitive environment. Does FTX have better infrastructure or risk management than ICE or CME? Or just better press at the moment.

daniel-cussen 4y ago
Solid analysis.
avrionov 4y ago
You seems to know a lot about the exchanges. D you think coinmarketcap numbers are real [1]? The parent comment was about FTX and Binance compared to the other crypto exchanges not to the exchanges in general. FTX claims to be way more efficient than Coinbase - having only 25 engineers compared to thousands for coinbase. This could be secret of the surviving exchanges - efficiency. [1] https://coinmarketcap.com/rankings/exchanges/ https://coinmarketcap.com/rankings/exchanges/
- ordinaryradical 4y ago
  Coin market cap volume numbers are known to be easy to manipulate, but exchanges like FTX and Coinbase do not likely engage in these kinds of manipulations as they don’t seek to legitimize themselves through nonexistent volume anymore. But the lesser known exchanges that appear on there are likely pumping their numbers. I have heard Coingecko’s ranking eliminates some of the volume pumping tricks but have little to back up that claim: https://www.coingecko.com/en/exchanges https://www.coingecko.com/en/exchanges

simonebrunozzi 4y ago

You assume there should be another crypto Spring. I suggest you to consider that maybe this winter is going to last forever.

solarkraft 4y ago

That scenario assumes that crypto currencies as a whole will still be interesting by then. I have doubts about real use cases being found and regulators are clamping down on it too. People should now also have realized that it's not a hedge against the market or inflation at all.