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? This text thread is with Elon from Michael Grimes, the Morgan Stanley guy leading the Twitter buy out, and rounding up equity investors to invest in Twitter with Elon.Interesting thread, evidently the CEO of FTX tried to rope Elon into financing them in April. Elon replies saying it set off his "bs detector":
Elon wonders if SBF really has $3B liquid to invest in Twitter. SBF was wanting to invest in Elon’s twitter buy out, not Elon investing in FTX.
He had access to the funds — they just weren’t his it appears.Thanks for clarifying that. I am curious, though, why was Sam trying to arrange a call with Elon if he never had the money in the first place?
He had access to the funds — they just weren’t his it appears.
... Suggests SBF wants to invest up to 5B, but also wants to put Twitter on the blockchain ...
What would it even mean to "put Twitter on the blockchain"? Does that statement even mean anything at all?
In the most basic sense, a blockchain has the following characteristics:
1. It is a public record that is 100% transparent that anyone can examine.
2. It is an unalterable record that cannot be changed.
3. It is decentralized and distributed, thus no party can control it or manipulate it for nefarious purposes.
If tweets were carried on a blockchain instead of in centralized servers, this could theoretically:
1. Prevent tweets from being deleted or altered.
2. Ensure tweets are visible to everyone even if the country the person is in attempts to engage in censorship.
3. Prevent Twitter from having control or the possibility to manipulate tweets for their own purposes.
In theory, this causes tweets to be more open, and closer approach an idealism of free speech.
However, I would argue that these theoretical problems are not what ails Twitter right now. The problem with Twitter right now is the Chief Twit who just set $44 billion on fire.
Essentially, a blockchain is a solution in search of a problem as far as Twitter is concerned.
Matt Levine said:If you try to calculate the equity of a balance sheet with an entry for HIDDEN POORLY INTERNALLY LABELED ACCOUNT, Microsoft Clippy will appear before you in the flesh, bloodshot and staggering, with a knife in his little paper-clip hand, saying “just what do you think you’re doing Dave?” You cannot apply ordinary arithmetic to numbers in a cell labeled “HIDDEN POORLY INTERNALLY LABELED ACCOUNT.” The result of adding or subtracting those numbers with ordinary numbers is not a number; it is prison.
- The position of the US government is that it is all a scam.
- You have the freedom to lose your money if you want but don't expect any legal protections.
It is my view. I’d be fine with it being banned too but I fear that would lead to more anti-government sentiment. So I’m a libertarian with regards to crypto.The above is a very libertarian view. (I can't tell from the post if you are advocating it or not, so I'm just commenting on the concept, not on the poster.)
I agree that crypto is pretty much all a scam, even though a lot of the people in it are not trying to scam.
The problem with the government washing its hands of it, saying people are free to lose their money, and providing no legal protections, is the scammers: There are in all areas of life dishonest people who are very charismatic and very good at convincing unsuspecting and trusting people to give them money with promises of great things to come of it. From evangelists who promise salvation to their donors, to used car salesmen who put bananas in transmissions to make lemons sound good, to contractors who take your deposit and disappear, to the likes of Bernie Madoff, there are people who con innocent people out of their money.
Government has a responsibility to give what protection it can to its citizens. There need to be laws and enforcement of those laws. And this should apply to crypto as well. And since it's pretty much all a scam, it should be prohibited. Since that's probably impossible, people who take money for crypto, and don't return the money when asked for it, should go to prison.
It is my view. I’d be fine with it being banned too but I fear that would lead to more anti-government sentiment. So I’m a libertarian with regards to crypto.
My plan would be going forward. SBF should (and certainly will) be prosecuted.So you don't think that a con man who talks a retiree into giving him all her money to "invest" in crypto and then walks away with it should face criminal prosecution? Or how about SBF, who "loaned" himself his clients' money and then lost it on shady speculation: Should he face no criminal charges since it was all about crypto and people "should be free to lose their money"? Or when someone hacks a crypto exchange and steals all the crypto, should that just be ignored by law enforcement?
Crypto is such a scam: People are told that it's "safe" because it does not rely on trust or government, but when their account is hacked or a con man gets them to pay for something he never delivers, the "safety" turns out to have been a lie. As currency, it's the most unsafe currency in existence. As an "investment" it's nothing but gambling. As a "hedge" it's an illusion. But for con men and hackers and black marketeers, for drug lords and human slavers, it's the best thing since sliced bread. And of course for the founders and the people who got in early, it's a license to steal.
@daniel,
I disagree 100% that "crypto is a scam". No, it's not. Crypto is a currency, like any other. It's a private currency that's not government-backed. This makes it have some risks that a government-backed currency may mitigate.
I agree 100% that scammers are the problem, and the reason that these scammers are the problem is because a) cryptocurrency is new and people don't understand it, thus they're unable to protect themselves, and b) the government has taken a hands-off approach so that the industry is nearly completely unregulated.
While @Daniel in SD's view is libertarian, yours is a socialist view. You believe that the government should step in and regulate it just like they regulate stocks, investments, and the financial industry as a whole. That's counterproductive to the goal of cryptocurrency, which is having a global currency that no government can manipulate.
I think you're having difficulty separating the underlying mechanics of cryptocurrency with the machinations of the scammers who are using the obfuscation and lack of regulation to steal people's money, like Sam Bankman-Fried. So what he did was take the dollars people deposited in his exchange, illegally transferred them to an investment arm, made high-risk investments, and lost a large amount of the money. Meanwhile, the cryptocurrency token he created he pumped up in value by using the investment arm to buy tons of it, then when the value of the token started to collapse he hid the losses in the investment arm rather than have the losses show up in the exchange. This is very similar to the machinations that Enron committed in the early 2000's -- massive debt was hidden off-shore in shell companies so that the US Enron company could continue showing profit. The Madoff scheme was worse, in that it was a true Ponzi scheme that never even attempted to invest money -- the Madoffs just siphoned it all off for their own personal gain over the years.
But the FTX scam has nothing to do with the fact that the underlying marbles that were being shuttled around were crypto tokens instead of dollars. Enron committed fraud that amounted to $20B-$40B, and the Madoff fraud was over $60B. These are 10-50x higher dollar value than the bankruptcy of FTX. Scammers and fraudsters will steal money, regardless of the underlying mechanism because that's what they do. Dollars, crypto, diamonds, gold, or tulip bulbs doesn't matter.
My personal belief is that there needs to be some regulation akin to what brokerage houses have to do for investors that want to invest on margin or trade speculative investment vehicles like futures or options. They need to sign a statement, issued by the exchange, that cryptocurrency is a speculative investment, is not insured, and carries considerable risk. Investors need access to educational materials on cryptocurrency before they buy into it. But I don't think it's actually possible for the government to regulate crypto in the way they regulate fiat currency, as no monetary policy can be applied to crypto. The government can't control it's interest rate, can't control the quantity in circulation, and can't make a meaningful impact on it's stability unless the government were to buy billions of dollars of it.
Sorry this is so long, but your view that since there are so many scammers out there that the whole thing should be shut down is a simplistic, socialist view. Not that you could "shut it down" anyway -- the blockchains are decentralized and there's no company or country that you can go to in order to enforce a "shut down". That's the premise of cryptocurrency. I hold some BTC and ETH right now directly on the blockchain (not in an Exchange). While it's value is volatile and variable, there is not a single person, agency, law enforcement organization, government, army, criminal, or hacker on this planet that has any means to take it away from me. That's pretty special.