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> If your friend had "his identity tied up in crypto", then why wasn't he holding it himself? Some people love day trading crypto. They keep funds on exchanges

> If your friend had "his identity tied up in crypto", then why wasn't he holding it himself? Some people love day trading crypto. They keep funds on exchanges so they can trade immediately and not deal with constant back and forth transactions with their own wallet.

kypro 4y ago
Yes, this is exactly the point that needs to be made. A few weeks ago I think it was quite easy to argue that it was riskier not to have it on an exchange because when it's not on an exchange you can't convert it back into USD when significant market moving events take place. But more importantly a lot of these people chose to keep their crypto with FTX specifically because it was seen as the safest pair of hands. If investors like Paul Tudor Jones are "stupid" enough to fall for this "scam", then I think we should probably have a bit of compassion for the average Joe who's lost money here. My heart genuinely goes out to everyone impacted by this.
- stoplying1 4y ago
  Uhm, yeah, people made the wrong bet because they fell for another hyped up tech company. But let's put a fine point on it -- that specifically fell in with a rent-seeking company capitalizing on a decentralizaed space with a centralized platform and then surprise-pikachu'd when they did the same thing as every one before them. > because when it's not on an exchange you can't convert it back into USD when significant market moving events take place. Weew, well, idk, if y'all know this, and I'll take the karma hit, but the rest of us that know better than to day trade mostly roll their eyes at this ... crap. And if you WERE "day trading" and didn't manage to pull out, well, maybe day trading isn't in your cards. Go watch YT for a few hours and I'm sure youll be on to your next get rich scheme.
  - jbm 4y ago
    > Go watch YT for a few hours and I'm sure youll be on to your next get rich scheme. I laughed, hard. Bravo to you. To be charitable, some people may only be able to afford a normal lifestyle though a successful "get-rich quick" scheme. Think insane markets like Toronto and Vancouver that are flooded with laundered money; how are you going to make enough money for a home without making a YOLO-style bet on something you don't understand (but is portrayed to work for rich people)? I think far less people would be taken by these scams if their basic needs were more easily paid for. (Disclaimer: I own zero Crypto, have never owned any Crypto)
    - stoplying1 4y ago
      Oh, oh dear. Um, that was sarcasm. I clearly don't think people should be looking for get rich schemes, on yt or otherwise. It was aimed at the people that think day trading, lottery tickets, or otherwise longshots are a logical response to a hostile market. Its hard to think of any scam that isn't portrayed as "working out (for the (would be) rich)". Again, a good reason to be wary of such things. I'm totally in favor of helping struggling folks, taking care of basic needs, etc (though I'm not sure laundered money is the culprit I'd offer). But lord maybe some reasoning skills would also do some wonders. Also, Christ, it pains me how often I think "if only I could sleep with myself stealing money from fools". Because I do know you're right, that's the psychology of why get rich schemes work...
  - kypro 4y ago
    If you have your money invested in some safe government treasuries with a broker you think you can trust until one day you find out to the surprise of both you and the entire financial system that the broker you're keep your government treasuries with are using them as collateral to fund bunch of risky crap they weren't telling you about. Sure you've lost everything but I mean you could have brought the treasuries directly from the government and held them yourself, right? I highly doubt most people with crypto on FTX were day trading. My guess is most just held their crypto with FTX because like stocks and bonds it's generally easier to hold them with a broker. The same argument could be made about cash in the bank. Do you keep all your money in cash under your bed or do you trust your bank isn't going to do illegal crap with it? Oh wait, let me guess, I bet you're day trading your cash for food and shelter instead of keeping it locked in a safe buried 10 feet under ground? My point is in any normal market the government would have stepped in if this were to happen. Crypto investors deserve similar protections as investors in other asset classes. They also deserve our sympathy. These weren't the degenerate gamblers you're paining them as.
doorman2 4y ago
I'm not too involved with the crypto space, but why have a centralized exchange at all? Like why can't the exchange setup a transaction directly between me and the counterparty that we both sign?
- ricochet11 4y ago
  we have lots of decentralized exchanges: uniswap, paraswap, dydx, loopring, etc.... not sure why more people dont use them, perhaps fooled by the convenience/ marketing/ promotional lures of CEXs.
  - seaal 4y ago
    Fees are generally much lower when trading on a CEX, especially with small amounts.
    - doorman2 4y ago
      I guess that makes sense given that the CEX can simply update values in their own (non-blockchain) database. This highlights that blockchain tech isn't really ready for prime-time use, yet. If the cost / tx could be brought down significantly, then there would be no need for a CEX.
- EamonnMR 4y ago
  Because economies of scale win. Centralizers can consume all available oxygen first, it doesn't matter that they can then go belly up.

kypro 4y ago

Yes, this is exactly the point that needs to be made. A few weeks ago I think it was quite easy to argue that it was riskier not to have it on an exchange because when it's not on an exchange you can't convert it back into USD when significant market moving events take place. But more importantly a lot of these people chose to keep their crypto with FTX specifically because it was seen as the safest pair of hands. If investors like Paul Tudor Jones are "stupid" enough to fall for this "scam", then I think we should probably have a bit of compassion for the average Joe who's lost money here. My heart genuinely goes out to everyone impacted by this.

stoplying1 4y ago
Uhm, yeah, people made the wrong bet because they fell for another hyped up tech company. But let's put a fine point on it -- that specifically fell in with a rent-seeking company capitalizing on a decentralizaed space with a centralized platform and then surprise-pikachu'd when they did the same thing as every one before them. > because when it's not on an exchange you can't convert it back into USD when significant market moving events take place. Weew, well, idk, if y'all know this, and I'll take the karma hit, but the rest of us that know better than to day trade mostly roll their eyes at this ... crap. And if you WERE "day trading" and didn't manage to pull out, well, maybe day trading isn't in your cards. Go watch YT for a few hours and I'm sure youll be on to your next get rich scheme.
- jbm 4y ago
  > Go watch YT for a few hours and I'm sure youll be on to your next get rich scheme. I laughed, hard. Bravo to you. To be charitable, some people may only be able to afford a normal lifestyle though a successful "get-rich quick" scheme. Think insane markets like Toronto and Vancouver that are flooded with laundered money; how are you going to make enough money for a home without making a YOLO-style bet on something you don't understand (but is portrayed to work for rich people)? I think far less people would be taken by these scams if their basic needs were more easily paid for. (Disclaimer: I own zero Crypto, have never owned any Crypto)
  - stoplying1 4y ago
    Oh, oh dear. Um, that was sarcasm. I clearly don't think people should be looking for get rich schemes, on yt or otherwise. It was aimed at the people that think day trading, lottery tickets, or otherwise longshots are a logical response to a hostile market. Its hard to think of any scam that isn't portrayed as "working out (for the (would be) rich)". Again, a good reason to be wary of such things. I'm totally in favor of helping struggling folks, taking care of basic needs, etc (though I'm not sure laundered money is the culprit I'd offer). But lord maybe some reasoning skills would also do some wonders. Also, Christ, it pains me how often I think "if only I could sleep with myself stealing money from fools". Because I do know you're right, that's the psychology of why get rich schemes work...
- kypro 4y ago
  If you have your money invested in some safe government treasuries with a broker you think you can trust until one day you find out to the surprise of both you and the entire financial system that the broker you're keep your government treasuries with are using them as collateral to fund bunch of risky crap they weren't telling you about. Sure you've lost everything but I mean you could have brought the treasuries directly from the government and held them yourself, right? I highly doubt most people with crypto on FTX were day trading. My guess is most just held their crypto with FTX because like stocks and bonds it's generally easier to hold them with a broker. The same argument could be made about cash in the bank. Do you keep all your money in cash under your bed or do you trust your bank isn't going to do illegal crap with it? Oh wait, let me guess, I bet you're day trading your cash for food and shelter instead of keeping it locked in a safe buried 10 feet under ground? My point is in any normal market the government would have stepped in if this were to happen. Crypto investors deserve similar protections as investors in other asset classes. They also deserve our sympathy. These weren't the degenerate gamblers you're paining them as.

doorman2 4y ago

I'm not too involved with the crypto space, but why have a centralized exchange at all? Like why can't the exchange setup a transaction directly between me and the counterparty that we both sign?

ricochet11 4y ago
we have lots of decentralized exchanges: uniswap, paraswap, dydx, loopring, etc.... not sure why more people dont use them, perhaps fooled by the convenience/ marketing/ promotional lures of CEXs.
- seaal 4y ago
  Fees are generally much lower when trading on a CEX, especially with small amounts.
  - doorman2 4y ago
    I guess that makes sense given that the CEX can simply update values in their own (non-blockchain) database. This highlights that blockchain tech isn't really ready for prime-time use, yet. If the cost / tx could be brought down significantly, then there would be no need for a CEX.
EamonnMR 4y ago
Because economies of scale win. Centralizers can consume all available oxygen first, it doesn't matter that they can then go belly up.