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My impression is Coinbase is the thing that FTX was claiming to be, a well run exchange. Looking back, them purchasing the naming rights to Miami's stadium and

My impression is Coinbase is the thing that FTX was claiming to be, a well run exchange. Looking back, them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. It's very easy to see the celebrity endorsements, puff pieces and the companies name plastered over a stadium as endorsements of how solid the business is, after all, a bunch of kids living in the Bahama's couldn't just buy all this right?...right? While FTX tried to gain respectability through all that, seems that Coinbase is taking the tack of just focus on the fundamentals of the business and build trust that way (you know the old school way).

gruez 4y ago
>them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. This never made sense to me. To me celebrity endorsements and purchasing naming rights only mean that you have the money to pay for them. It might convey some legitimacy in the way of "they can pay for it", but I don't think of them as some sort of stamp of approval.
zamalek 4y ago
> Coinbase is taking the tack of just focus on the fundamentals of the business and build trust that way People who use Coinbase are called normies by the larger cryptocurrency community, as though relying on competency is a bad thing. It's this bizarre communal masochism. But then they complain when it all goes wrong? I don't get it.
- coding123 4y ago
  is normies some kind of insult
- wmf 4y ago
  Coinbase doesn't offer shorting or leverage that true degens need.
Tenoke 4y ago
FTX wasn't just like Coinbase, they were a better exchange than Coinbase with more products. They just ruined that by using the exchange's money to bail out Alameda's unrelated investments. As far as I can tell if they hadn't done that Alameda would've died and FTX would've just kept being a good exchange.
- jaywalk 4y ago
  They had to bail out Alameda because Alameda was propping up FTX. I have seen nothing that indicates FTX would have been fine standing alone, and plenty to indicate the opposite. It was a giant scam. All of it.
  - zeven7 4y ago
    Right, traders flocked to FTX because it was lucrative, and it was lucrative because Alameda was bleeding money as FTX's market maker.
  - Tenoke 4y ago
    I mean, I don't see how it could've been losing money. Even if it had less users surely the fees they take more than make-up for the costs the exchange itself has.
    - jandrese 4y ago
      They were paying out guaranteed 15% returns "with no risk" to investors. Basically a textbook Ponzi scheme pitch and yet again it worked. https://www.theblock.co/post/186187/alameda-promised-high-returns-with-no-risk-in-2018-pitch https://www.theblock.co/post/186187/alameda-promised-high-re...
      - Tenoke 4y ago
        Again, that's the Alameda arm, I'm talking about the exchange.
        4y ago
xdavidliu 4y ago
ironically, I first heard about FTX and SBF in a hackernews thread about Coinbase layoffs. https://news.ycombinator.com/item?id=31738029 https://news.ycombinator.com/item?id=31738029 Some gems: "Yeah. FTX people clearly know a lot more about market making and how exchanges work. Makes coinbase look like amateurs. ... I agree and am in general a big fan of FTX and the guys that work there. The CEO, Sam Bankman-Fried one of these HFT guys from Jane Street and his net worth shot up from 0 to $24 billion in just a few years. He kept things super lean and focused. But in the last few months it looks like he's hired a PR team and is all over the place: podcasts, obviously planted news stories, etc. He even hired a head of fashion and luxury partnerships and even has an ad out in Vogue ... This is the case for most market makers in whatever markets they're in. A crash usually produces a huge trading windfall, and then the subsequent "recession" leaves people with little money to invest/gamble with. FTX's traders are veterans of the industry, and they understand the need to be lean when order flow is light, and the need to make as much as possible when it's hot. Coinbase just watched the best two years of trading pass in front of their eyes, and failed to monetize it even to 10% of its potential. If they're lucky, they will get another opportunity to do things right in 5 years. But the trading graveyard is filled with people/companies like Coinbase who did really well for a year because they lucked into a good position, but who should have done 10x better. But then the real players see the opportunity, and run the Coinbases of the world off"
- zeven7 4y ago
  Thanks for linking that thread. Looking through the comments is a trip. As it turns out doing things the right way like Coinbase looks "boring" sometimes, while fraud might look more exciting.
- Goronmon 4y ago
  At least one person seemed to know what they were talking about. Unfortunately the comment was flagged, which is interesting. https://news.ycombinator.com/item?id=31738560 https://news.ycombinator.com/item?id=31738560 > Very different approach to Bryan Armstrong, who’s more of a Bitcoin “believer” The fact that you think this goes to show just how little you know about this ecosystem. And Bankman is the worst type of con-artist, he is going to use his billion(s) to influence US politics rather than build viable technological solutions. Armstrong has been the source of ire since the Segwit wars where he scammed and peddled Bcash on unsuspecting noobs using the 'legitimacy' of being the only YC backed and US sanctioned exchange. It's been a series of horrible UX after bad business strategy. Armstrong is what I expected when SV entered this space and played the typical VC game as seen with the buy-out of 21 Inc. I kind of respect him for hustling the SV crowds with such an absurd IPO valuation, but he is immensely foolish if he did not cash out then and there and anticipate buying back under this bear market to recapitalize and sell more of his worthless shares as they cratered in price. Again, HN is pathetically out of its depth when it comes to this Industry that it's hard to take most of you seriously on anything else.
mchaver 4y ago
> a bunch of kids I don't think we should refer to them as kids. It seems to absolve them of responsibility. Kids are given leniency when they do wrong. The FTX/Alameda people are adults that graduated from one of the highest ranked universities in the world. They are foolish, but not kids. Part of me wonders if there is media narrative that wants them to be referred to as kids because powerful people don't want them to be punished as harshly.
- jandrese 4y ago
  I think a lot of the "kids" narrative comes from the CEO that looks like jailbait. Most people weren't paying much attention to FTX before they exploded, and the first impression you get from looking at the "about us" pages is that they look like a bunch of teenagers, and this family of companies was worth billions out of nowhere. It is mind blowing that supposedly serious investors were tripping over themselves to dump money into this company. I'm not saying that young people can't create great companies. Many big companies are started by young founders, but when there are no adults in the room at all it starts looking suspect.
  - mchaver 4y ago
    I agree with what you say that their appearances and behavior do not seem to fit the role, but that is part of the narrative that plays into the interests of Sam Bankman and company that will help them get lighter sentences. Their image as kids playing League of Legends who were trying to make money to give it away benefits them a lot.

gruez 4y ago

>them purchasing the naming rights to Miami's stadium and all the A list celebrities prompting it just added this fake layer of trust. This never made sense to me. To me celebrity endorsements and purchasing naming rights only mean that you have the money to pay for them. It might convey some legitimacy in the way of "they can pay for it", but I don't think of them as some sort of stamp of approval.

zamalek 4y ago

> Coinbase is taking the tack of just focus on the fundamentals of the business and build trust that way People who use Coinbase are called normies by the larger cryptocurrency community, as though relying on competency is a bad thing. It's this bizarre communal masochism. But then they complain when it all goes wrong? I don't get it.

coding123 4y ago
is normies some kind of insult
wmf 4y ago
Coinbase doesn't offer shorting or leverage that true degens need.

Tenoke 4y ago

FTX wasn't just like Coinbase, they were a better exchange than Coinbase with more products. They just ruined that by using the exchange's money to bail out Alameda's unrelated investments. As far as I can tell if they hadn't done that Alameda would've died and FTX would've just kept being a good exchange.

jaywalk 4y ago
They had to bail out Alameda because Alameda was propping up FTX. I have seen nothing that indicates FTX would have been fine standing alone, and plenty to indicate the opposite. It was a giant scam. All of it.
- zeven7 4y ago
  Right, traders flocked to FTX because it was lucrative, and it was lucrative because Alameda was bleeding money as FTX's market maker.
- Tenoke 4y ago
  I mean, I don't see how it could've been losing money. Even if it had less users surely the fees they take more than make-up for the costs the exchange itself has.
  - jandrese 4y ago
    They were paying out guaranteed 15% returns "with no risk" to investors. Basically a textbook Ponzi scheme pitch and yet again it worked. https://www.theblock.co/post/186187/alameda-promised-high-returns-with-no-risk-in-2018-pitch https://www.theblock.co/post/186187/alameda-promised-high-re...
    - Tenoke 4y ago
      Again, that's the Alameda arm, I'm talking about the exchange.
      - 4y ago

xdavidliu 4y ago

ironically, I first heard about FTX and SBF in a hackernews thread about Coinbase layoffs. https://news.ycombinator.com/item?id=31738029 https://news.ycombinator.com/item?id=31738029 Some gems: "Yeah. FTX people clearly know a lot more about market making and how exchanges work. Makes coinbase look like amateurs. ... I agree and am in general a big fan of FTX and the guys that work there. The CEO, Sam Bankman-Fried one of these HFT guys from Jane Street and his net worth shot up from 0 to $24 billion in just a few years. He kept things super lean and focused. But in the last few months it looks like he's hired a PR team and is all over the place: podcasts, obviously planted news stories, etc. He even hired a head of fashion and luxury partnerships and even has an ad out in Vogue ... This is the case for most market makers in whatever markets they're in. A crash usually produces a huge trading windfall, and then the subsequent "recession" leaves people with little money to invest/gamble with. FTX's traders are veterans of the industry, and they understand the need to be lean when order flow is light, and the need to make as much as possible when it's hot. Coinbase just watched the best two years of trading pass in front of their eyes, and failed to monetize it even to 10% of its potential. If they're lucky, they will get another opportunity to do things right in 5 years. But the trading graveyard is filled with people/companies like Coinbase who did really well for a year because they lucked into a good position, but who should have done 10x better. But then the real players see the opportunity, and run the Coinbases of the world off"

zeven7 4y ago
Thanks for linking that thread. Looking through the comments is a trip. As it turns out doing things the right way like Coinbase looks "boring" sometimes, while fraud might look more exciting.
Goronmon 4y ago
At least one person seemed to know what they were talking about. Unfortunately the comment was flagged, which is interesting. https://news.ycombinator.com/item?id=31738560 https://news.ycombinator.com/item?id=31738560 > Very different approach to Bryan Armstrong, who’s more of a Bitcoin “believer” The fact that you think this goes to show just how little you know about this ecosystem. And Bankman is the worst type of con-artist, he is going to use his billion(s) to influence US politics rather than build viable technological solutions. Armstrong has been the source of ire since the Segwit wars where he scammed and peddled Bcash on unsuspecting noobs using the 'legitimacy' of being the only YC backed and US sanctioned exchange. It's been a series of horrible UX after bad business strategy. Armstrong is what I expected when SV entered this space and played the typical VC game as seen with the buy-out of 21 Inc. I kind of respect him for hustling the SV crowds with such an absurd IPO valuation, but he is immensely foolish if he did not cash out then and there and anticipate buying back under this bear market to recapitalize and sell more of his worthless shares as they cratered in price. Again, HN is pathetically out of its depth when it comes to this Industry that it's hard to take most of you seriously on anything else.

mchaver 4y ago

> a bunch of kids I don't think we should refer to them as kids. It seems to absolve them of responsibility. Kids are given leniency when they do wrong. The FTX/Alameda people are adults that graduated from one of the highest ranked universities in the world. They are foolish, but not kids. Part of me wonders if there is media narrative that wants them to be referred to as kids because powerful people don't want them to be punished as harshly.

jandrese 4y ago
I think a lot of the "kids" narrative comes from the CEO that looks like jailbait. Most people weren't paying much attention to FTX before they exploded, and the first impression you get from looking at the "about us" pages is that they look like a bunch of teenagers, and this family of companies was worth billions out of nowhere. It is mind blowing that supposedly serious investors were tripping over themselves to dump money into this company. I'm not saying that young people can't create great companies. Many big companies are started by young founders, but when there are no adults in the room at all it starts looking suspect.
- mchaver 4y ago
  I agree with what you say that their appearances and behavior do not seem to fit the role, but that is part of the narrative that plays into the interests of Sam Bankman and company that will help them get lighter sentences. Their image as kids playing League of Legends who were trying to make money to give it away benefits them a lot.