What astounds me about crypto is how divorced much of it seems to be from what was supposed to be its original purpose.
The whole "trustless" aspect is rooted in the fact that the algorithm is open-source and "secure" (to a large extent, unless some super world power decided it was worth it to devote phenomenal resources to compromise i…
What astounds me about crypto is how divorced much of it seems to be from what was supposed to be its original purpose.
The whole "trustless" aspect is rooted in the fact that the algorithm is open-source and "secure" (to a large extent, unless some super world power decided it was worth it to devote phenomenal resources to compromise it). The point is that there is no controlling authority; it's effectively a digital simulation of gold, i.e. a finite, external resource that can't be artificially created. That's why there's no getting back your money if you lose it — nobody has any special permissions to go muck with the blockchain.
Which is why it flabbergasts me that someone held $40 billion in an "in-house" cryptocurrency (or what are called "tokens"). Set aside the fact that even a secure cryptocurrency is nothing more than a tradable commodity with no inherent worth aside from what people are willing to pay for it. So far as I can tell, FTT (FTX's tokens) seems to be an opaque black box. If there's no open standard ensuring that the tokens can't be counterfeited, then ownership of tokens has to be managed entirely within FTX.
And if that's the case, it really is nothing special — just some private interest's "Monopoly money". They could create as much as they want, artificially manipulate the value as they see fit, regardless of whether they have the assets to back it up. You're relying entirely on trust of the FTX exchange as long as you possess only their tokens.
And so we get what we have here: questions about incestuous issuance of tokens and transfer of assets between FTX and Alameda Trading (FTX's associated trading firm). Typical shenanigans that result from poor or non-existent regulation.
If this guy doesn't get the nickname "Sam Banking-Fraud" people just aren't trying.
What astounds me about crypto is how divorced much of it seems to be from what was supposed to be its original purpose.
The whole "trustless" aspect is rooted in the fact that the algorithm is open-source and "secure" (to a large extent, unless some super world power decided it was worth it to devote phenomenal resources to compromise it). The point is that there is no controlling authority; it's effectively a digital simulation of gold, i.e. a finite, external resource that can't be artificially created. That's why there's no getting back your money if you lose it — nobody has any special permissions to go muck with the blockchain.
Which is why it flabbergasts me that someone held $40 billion in an "in-house" cryptocurrency (or what are called "tokens"). Set aside the fact that even a secure cryptocurrency is nothing more than a tradable commodity with no inherent worth aside from what people are willing to pay for it. So far as I can tell, FTT (FTX's tokens) seems to be an opaque black box. If there's no open standard ensuring that the tokens can't be counterfeited, then ownership of tokens has to be managed entirely within FTX.
And if that's the case, it really is nothing special — just some private interest's "Monopoly money". They could create as much as they want, artificially manipulate the value as they see fit, regardless of whether they have the assets to back it up. You're relying entirely on trust of the FTX exchange as long as you possess only their tokens.
And so we get what we have here: questions about incestuous issuance of tokens and transfer of assets between FTX and Alameda Trading (FTX's associated trading firm). Typical shenanigans that result from poor or non-existent regulation.
If this guy doesn't get the nickname "Sam Banking-Fraud" people just aren't trying.