Crypto investors panic during market bloodbath

[GradyPhilpott]

Originally Posted by m j b

I read this entire thread. My head hurts.

This got a lot more complicated that I thought it would, but quite interesting, if complex.

[77T]

Originally Posted by Mifune

as far as the 'why' this happened last week...

You described “how”…

The “why” may never be known but I do believe more investigation will be futile. I would suspect a state-sponsored organization obtained keys they shouldn’t have been able to get.

Each time someone submits a transaction to the ledger, the nodes check to make sure the transaction is valid—that whoever spent a bitcoin had a bitcoin to spend. I sense a form of “man in the middle” hole has been exploited.

Forensic NSA accounting may trace it - but it is a fundamental failure of the blockchain (because it relies on trusted ledgers) to lose track of the crypto.

A person (or persons) unknown swallowed a good chunk into two wallets.

“Blockchain analytics firm Elliptic estimates holders of UST and luna have lost a total of $42 billion over the past week. Analysis from the company shows that 52,189 bitcoins were moved to a single account at crypto exchange Gemini, while a further 28,205 bitcoins were transferred to Binance. Tom Robinson, chief scientist at Elliptic, said it was "not possible" to trace the movement of funds beyond these wallets.”


Sent from my iPhone using Tapatalk Pro

[Mifune]

Here is Do Kwan's LUNA/TERRA revival plan... Just released.

Terra Ecosystem Revival Plan 2

Terra is more than $UST.

While UST has been the central narrative of Terra’s growth story over the last year, the distribution of UST has led to the development of one of the strongest developer ecosystems in crypto.

The Terra ecosystem and its community are worth preserving.

Terra’s app ecosystem contains hundreds of developers working on everything from defi to fungible labor markets, state-of-the-art infrastructure and community experience
Terra Station has a large install base, with million+ users across the world
Although distressed, strong brand recognition and a name that almost everyone in the world will have heard about

$UST peg failure is Terra’s DAO hack moment - a chance to rise up anew from the ashes.


so it appears that the old chain will be 'FORKED' and new TERRA will be air dropped to most all 'classic' holders and the network will carry on with a new LUNA/TERRA token with a staking APR capped at 7%

[Mifune]

Originally Posted by 77T

You described “how”…

The “why” may never be known but I do believe more investigation will be futile. I would suspect a state-sponsored organization obtained keys they shouldn’t have been able to get.

Each time someone submits a transaction to the ledger, the nodes check to make sure the transaction is valid—that whoever spent a bitcoin had a bitcoin to spend. I sense a form of “man in the middle” hole has been exploited.

Forensic NSA accounting may trace it - but it is a fundamental failure of the blockchain (because it relies on trusted ledgers) to lose track of the crypto.

A person (or persons) unknown swallowed a good chunk into two wallets.

“Blockchain analytics firm Elliptic estimates holders of UST and luna have lost a total of $42 billion over the past week. Analysis from the company shows that 52,189 bitcoins were moved to a single account at crypto exchange Gemini, while a further 28,205 bitcoins were transferred to Binance. Tom Robinson, chief scientist at Elliptic, said it was "not possible" to trace the movement of funds beyond these wallets.”

that's actually not correct... the 'WHY' is known, which is WHY I posted it. since it was MY post, the WHY was directed at the 'market' and not the sell cascade or the initial depeg... which will be discovered at some point despite all the probable players announcement of innocence. you dont need forensic work because the network didn't fail... it NEVER WENT DOWN until they shut it down. it was sell pressure initiated by a massive sale that cause others to FUD into... a cascade. if people did not panic, the peg would have been regained.

[77T]

Ok
Why did it de-peg?

Not that it fell below par $1
But why?


Sent from my iPhone using Tapatalk Pro

[Mifune]

it initially de-pegged because of a massive sale of tokens from someone/some organization in an attempt to destabilize the token (this part is speculation because no one is sure yet if it was purposefully done)... several billion dollars worth. the initial de-peg was around 89 cents or something like that I believe... which can be rec covered... but not if everyone panics and sells their tokens in an attempt to conserve their liquidity. As Liquidity began to rotate out of TERRA back into LUNA it triggered a inflationary propagation of the TERRA token to stabilize the peg to the dollar and the LUNA token... this fed the inflation at an exponential rate as a regular function of the Algorithm thus diluting the asset with MEGA HYPER INFLATION. the chain accelerated the inflation and was producing tokens at the rate of 1-2 TRILLION tokens an hour towards the end before they shut down the system.


As with ANY ASSET, including apple, amazon or gold... if everyone sells, you asset is worthless.

there are cues as to whom it was, but that time will come... right now, the network needs to stabilize and get forked and in that way they can attempt to make things right for the holders and validators.

[huncho]

Originally Posted by 77T

Ok
Why did it de-peg?

Not that it fell below par $1
But why?


Sent from my iPhone using Tapatalk Pro

https://twitter.com/OnChainWizard/st...XiyxlUuwr1OZFw

[77T]

I agree - the sell side pressure stank.

As we have seen in the opposite stonk meme equities, I think it will be interesting to learn (if it isn’t classified) who manipulated the thing.

I also agree that the network performed well under the pressure. At least we know it can take the pressure.

To protect owners, I wonder if a generally acceptable protection should be enabled if it ever reached 95% of real-time transaction capacity?

A "circuit breaker" of sorts.


Sent from my iPhone using Tapatalk Pro

[Star Ferry]

Originally Posted by 77T

Ok
Why did it de-peg?

Not that it fell below par $1
But why?


Sent from my iPhone using Tapatalk Pro

This is like the coroner who always blames “cardiac arrest” with no further reasoning

[Mifune]

can you say this was a programing error... maybe or certainly partly, but the trigger was the initial HUGE sale that took TERRA to the tipping point.

the idea of an algorithmic stable coin (specially one backed by Bitcoin) is a good one and very interesting, but it needs fail safe components built in so this cascade doesn't happen again.

[joeychitwood]

Can someone simply explain what it is that gives crypto value? What is it backed by? How does solving a math puzzle in a server farm generate value?

[flyboyyy]

Originally Posted by Mifune

Here is Do Kwan's LUNA/TERRA revival plan...

so it appears that the old chain will be 'FORKED' and new TERRA will be air dropped to most all 'classic' holders and the network will carry on with a new LUNA/TERRA token with a staking APR capped at 7%

Ahhh...brings back memories of ETH/ETHC DAO fork battle (though wholly different I know). The whole idea of "taking a snapshot" of a ledger at a moment in time is and reverting to said snapshot just erodes the entire reasoning for a distributed ledger (in my opinion). It appears the debate of distributed vs. decentralized is yet to be decided...

[Uggi]

Originally Posted by Star Ferry

This is like the coroner who always blames “cardiac arrest” with no further reasoning

Eh?

[Star Ferry]

Originally Posted by Uggi

Eh?

Because, as 77T was alluding to, if a currency suffers enough it may need to be de-pegged from a reference currency, and then the bigger question is why did it fall? Similarly, everybody’s heart stops when they die. So you can always blame cardiac arrest and never have to dig deeper

[Willyjo]

Originally Posted by 77T

Exactly, Brian…

It won’t stop people from speculating and that is where the shakeouts always occur. They just don’t learn from history: tulip bulbs, swamp land, CDS, etc.


Sent from my iPhone using Tapatalk Pro

Tulip bulbs indeed


Sent from my iPhone using Tapatalk

[77T]

Originally Posted by joeychitwood

Can someone simply explain what it is that gives crypto value? What is it backed by? How does solving a math puzzle in a server farm generate value?

I don’t know if this is an exact fit but here goes…

Those who use fiat currencies give it value via a philosophy termed “the full faith and credit of [insert country name here”]

That includes all kinds of money made legal tender by a government decree (or fiat). AKA paper money or coins that have face values far exceeding their commodity values.

A similar philosophy applies to crypto with some variables. In the beginning, BTC gained value due to faith in blockchain, no fiat-type manipulation, and faith in the record keeping being outside those governments.

In truth both are “faith-based” with a twist. Crypto pundits would say the dollar is based on faith in printing presses and ink. Dollar pundits would counter by saying BTC is based on vaporware.

Understanding that the truth is somewhere between those extremes.


Sent from my iPhone using Tapatalk Pro

[Moondoggy]

There will always be someone to buy the bagel from the deli.

[joeychitwood]

Originally Posted by 77T

I don’t know if this is an exact fit but here goes…

Those who use fiat currencies give it value via a philosophy termed “the full faith and credit of [insert country name here”]

That includes all kinds of money made legal tender by a government decree (or fiat). AKA paper money or coins that have face values far exceeding their commodity values.

A similar philosophy applies to crypto with some variables. In the beginning, BTC gained value due to faith in blockchain, no fiat-type manipulation, and faith in the record keeping being outside those governments.

In truth both are “faith-based” with a twist. Crypto pundits would say the dollar is based on faith in printing presses and ink. Dollar pundits would counter by saying BTC is based on vaporware.

Understanding that the truth is somewhere between those extremes.

Thanks, Paul. That’s a good explanation.

[superdog]

Interesting article.

https://www.yahoo.com/finance/m/8a0c...americans.html

[huncho]

Originally Posted by superdog

Interesting article.

https://www.yahoo.com/finance/m/8a0c...americans.html

Gensler is an idiot sadly. his excuse for continuously rejecting a spot bitcoin etf is that bitcoin is too volatile and risky. meanwhile look at what's going on in the "safe" stock market. tons of stocks down 50-80%, nasdaq hit -30%, naked shorting is allowed (gme put it on display, what came of it? nothing), majority of retail orders routed through dark pools (confirmed by him) thus having less impact on prices, and tons of insider trading that has been proven which is even sadder when pelosi is on the main stage of congress and blatantly insider trading. even members of the federal reserve were caught insider trading which i believe only ended in them retiring

he approved bitcoin futures etfs but no one invests in those because they're fundamentally not designed for investing, and it just allows wall street a bit of an easier exposure to btc. a spot etf would allow 401ks to start passively investing into bitcoin which obviously is a huge deal

this guy has his own agenda and doesn't care about protecting investors like us in the slightest unfortunately. he's doing nothing about the manipulation in our stock market which is the one the entire world watches and leads. it's unfortunate because everyone was optimistic when he became the commissioner due to him teaching blockchain at MIT, but even with that he's made some very questionable statements that would lead you to believe he has no background in the space

[Uggi]

Originally Posted by huncho

Gensler is an idiot sadly. his excuse for continuously rejecting a spot bitcoin etf is that bitcoin is too volatile and risky. meanwhile look at what's going on in the "safe" stock market. tons of stocks down 50-80%, nasdaq hit -30%, naked shorting is allowed (gme put it on display, what came of it? nothing), majority of retail orders routed through dark pools (confirmed by him) thus having less impact on prices, and tons of insider trading that has been proven which is even sadder when pelosi is on the main stage of congress and blatantly insider trading. even members of the federal reserve were caught insider trading which i believe only ended in them retiring

he approved bitcoin futures etfs but no one invests in those because they're fundamentally not designed for investing, and it just allows wall street a bit of an easier exposure to btc. a spot etf would allow 401ks to start passively investing into bitcoin which obviously is a huge deal

this guy has his own agenda and doesn't care about protecting investors like us in the slightest unfortunately. he's doing nothing about the manipulation in our stock market which is the one the entire world watches and leads. it's unfortunate because everyone was optimistic when he became the commissioner due to him teaching blockchain at MIT, but even with that he's made some very questionable statements that would lead you to believe he has no background in the space

Appreciate the post huncho. I didn’t know about some of this. Shocking stuff really and an even greater argument/endorsement for some form of decentralised financial system beyond the tentacles of government corruption.

[Andad]

Originally Posted by Mifune

Look at this 'LONG' chart...



It's massive and has NEVER been as high or as parabolic.

I see a few long jumping off points

[BNA/LION]

No Crypto | No Problem | Kinda Inerested at these price to take a Small Position

[austinp]

When if ever do you think crypto will be traded on more traditional platforms like Schwab?


Sent from my iPhone using Tapatalk

[huncho]

Originally Posted by austinp

When if ever do you think crypto will be traded on more traditional platforms like Schwab?


Sent from my iPhone using Tapatalk

first step would be to allow a btc etf and eth etf. could be close, but so far the sec has been denying everyone's applications over and over again, even ones from fidelity. this would at least allow direct exposure without actually buying and holding the asset

as far as trading crypto as a whole on brokerages? i don't think we're anywhere close to that. there's a lot of code required behind the scenes for trading coins across different chains, for example converting the dollars you deposit to a stable coin on ethereum then to the corresponding stablecoin on a different chain (if necessary) and then to whatever coins you're purchasing. coinbase and other crypto exchanges already have this down but it's not something easily accomplished and not sure most brokerages wanna go there yet. they also have to deal with the headache of custody of the tokens

[Moondoggy]

Who changed the language to Mandarin in this thread?

[Star Ferry]

I think what gets lost is that it's an asset class but also an industry. And it's not a cottage industry anymore. So you have people who lost money. Some lost a little, some lost a lot. some can afford their losses, and some can't.

but then there's this entire industry of asset managers, wallets, consultants, experts, advisors, etc. who were highly vulnerable to the price of these coins. it's like being a real estate agent in a housing crash -- even if you don't own any real estate, it hurts.

[ColtFletcher]

Originally Posted by enjoythemusic

Water. Sells for more than a gallon of gasoline too.

Agreed.
I've always said this. 8- 16oz Dasani bottles (one gallon) sell for $ 20.00 @ $ 2.50 a bottle and no one says a word. And we thought milk was pricey.

Don't forget, in 2008, during the "Great Recession" a barrel of crude was $250-30 and mean gas pump prices never hit over $ 4.00. Now we have crude CLIMBING UP to $110 this week and gas prices are the highest in history with all fifty states over $ 4.00 for the first time.

I guess all of us sheep are willing to take it deeper.

[SDGT3]

Originally Posted by ColtFletcher

Don't forget, in 2008, during the "Great Recession" a barrel of crude was $250-30 and mean gas pump prices never hit over $ 4.00. Now we have crude CLIMBING UP to $110 this week and gas prices are the highest in history with all fifty states over $ 4.00 for the first time.

I guess all of us sheep are willing to take it deeper.

The highest a barrel of oil has ever been is $148.93 not $250 but yes, gas prices were not even close to what they are now. The refining capacity has shrunk in the past 14 years and taxes have gone up in most states. There's also no appetite with this current administration to drill more (see headlines last week).

[ColtFletcher]

Originally Posted by SDGT3

The highest a barrel of oil has ever been is $148.93 not $250 but yes, gas prices were not even close to what they are now. The refining capacity has shrunk in the past 14 years and taxes have gone up in most states. There's also no appetite with this current administration to drill more (see headlines last week).

Thank you. typo! Crude was just over 160 and dropped lock a rock, from my recollection.