3 ms·
All it takes is a business case: how will this business make money? Where will its cash flow come from? Where's the value-add? How easy is it to be out-competed
by mjburgess 4y ago
All it takes is a business case: how will this business make money? Where will its cash flow come from? Where's the value-add? How easy is it to be out-competed? Who are the existing market players? How do they make money? What are you offering customers that will attract them to your business? What is the horizon for profitability?
You know, absolutely fundamental questions that have never been asked or answered of crypto. Questions that were "presumed answered" by made-up market capitalisations, and the flood of teenagers and young-adults into the schemes.
"This time" is never different. The route to making a sustainable profit never changes.
- dan-robertson 4y agoI don’t know what you’re suggesting here really but in general running an exchange seems like a reasonable looking business – you match someone who wants to buy with someone who wants to sell and collect a tiny fee – and FTX appeared to be well run and profitable. The risks would mostly be getting hacked, massively (unintentionally) screwing up the accounting or being outcompeted. I don’t think one could have easily predicted this from first principles and if you’d told me a year or 5 months ago that one of the big N exchanges would blow up before 2023, I wouldn’t have guessed FTX.