His "fortune" is mostly ownership of Binance which is now under the thumb of the US government. If—as widely theorized—Binance's secret ingredient is crime then it's not going to be worth what it once was.
I'm pretty sure that he also has personal BTC stash. Maybe not billions though.
After SBF, he’d be pretty stupid for not stashing his assets just in case.
Most likely multiple anonymous wallets of different cryptos. The real question is whether anyone else has access to them... if yes I expect there to be nothing left.
I think his wife is holding everything in Dubai.
There is Binance US and Binance the global version. I expect Binance US to be tailored to US laws and regulations, but are you implying the global version is also under tight US govt control?
May 2024: "The United States Department of Justice (DOJ) appointed Forensic Risk Alliance (FRA) to serve as the outside monitor over the crypto exchange Binance. Binance must undergo a monitorship of three years as part of its plea deal with the DOJ related to money laundering violations." https://www.theblock.co/post/293834/doj-taps-fra-over-sulliv...
Yes, global banks also fall under US control if they want to transact with anything in the US financial system. Less so if they don’t have American customers, but they still do have to follow American laws.
For example several very old Swiss banks have been shut down by US regulators because they were doing business in the US with US citizens and their secrecy was being used to break US law by Americans.
Let's just say they were very ambivalent about KYC. They had a lot of phantom liquidity as well, Binance pioneered the scam wick.
Binance far and away dominates non-United States volume of crypto trading. If you think that Coinbase, a publicly traded US company, has real volume and earns a fee for that, then it's not hard to understand why Binance has real revenues and value.
I don’t think anyone is disputing it’s volume and fees, I think what they are pointing out is that a nontrivial, maybe majority of that, is proceeds of crime, which makes the business somewhat less attractive.
Bitcoins are clearly negative sum game (resources used, GPUs burned, CO2 emitted, money changed hands). Wish we could do less of it.
I’m just curious - if you were to try making a decentralized currency as a fun project, what mechanism would you use instead?
I’m someone who doesn’t really use it, but was fascinated with it before “blockchain” became a buzzword.
edit: proof-of-work. I have been out of the loop for years :)
My next question is are there downsides to proof-of-stake, and why has bitcoin not moved towards it?
Bitcoin's advantage is mainly its name recognition and unchanging nature (== trust and protocol stability). You could never get the necessary support for any meaningful changes.
For people who want proof-of-stake there are plenty of coins doing that. Etherium is probably the best known most established option.
But no coin really solves the other big challenge of crypto-currency: barely anyone uses them as currency. Most of those that do do it for illegal purposes: ransomware payments, marketplaces for illegal goods and services (including the malware SaaS providers), illegal money movements etc. But for the vast majority of people it's more like digital gold than like digital cash: an investment vehicle that derives its value from its limited supply.
As an investment it doesn't actually create economic value (unlike investing in real companies), so you need to have a pretty positive view of the other use cases to judge the overall impact as positive
Bitcoin's advantage is that it's value has continued climbing, aside from some fairly big blips, irrespective of its design or utility. That's why people buy it and hold it. It's a magic piggy bank.
If a truly stable cryptocurrency was released that was actually suitable for everyday transactions at scale, the people who buy bitcoin would laugh at it for not offering a return on investment. It seems like such a currency will have to be adopted from the bottom up to succeed, not trickle from the top down.
Here's a question for you: What happens to the value of bitcoin when some other crypto-currency starts doing the things bitcoin has only promised? Does it crash, or does the magic bubble around a completely useless technology persist for as long as people are willing to believe in it?
About a decade ago Dogecoin made a big push to get online and offline business to accept it. Making a block every minute was quite beneficial for that, and the price used to be somewhat stable. Today nobody pays in Dogecoin. Lots of companies that used to except Bitcoin/Litecoin/Dogecoin stopped doing so because off lack out demand.
The issue isn't that crypto currencies can't be used as currency, it's more that they don't get used as currency outside niche use cases because they don't have a good USP. Most countries have decent enough currencies and payment systems
it's called monero
Whoever is using it as digital gold certainly sees economic value, e.g. preserving wealth to invest elsewhere.
Proof-of-work in its current form needs to die.
If it is based on proof-of-work it needs to be something useful.
If someone can prove proof-of-work won't work without wasted work then we need to make some sacrifices to make it workable. Because we cannot allow slow as molasses and/or extremely wasteful for all future.
If it is based on proof-of-stake there needs to be a fair distribution model.
I have some ideas for both, especially the first but I want to give them some more thought :-)
Why do we need a so-called decentralized currency anyway? I'd be less antagonistic if its major use case wasn't money laundering.
Just some examples:
https://en.wikipedia.org/wiki/Corralito
https://en.wikipedia.org/wiki/Argentine_currency_controls_(2...
https://www.statista.com/statistics/316750/inflation-rate-in...
https://hongkongfp.com/2023/12/15/hong-kong-govt-amends-nati...
https://www.ibanet.org/article/5584f623-6456-4287-8c34-1907b...
https://edition.cnn.com/2022/02/20/americas/canada-trucker-p...
How are these solved by cryptocurrencies?
In the case of Argentina, in most cases people have turned to the much safer USD.
Capital controls are becoming more and more erratic and authoritarian. A decentralized currency provides a relief valve.
More erratic and authoritarian compared to what time?
As recently as 1989, most of the world's currencies were tightly controlled and exchange rates were fixed. In many countries like the Soviet Union, you were not even allowed to bring local cash outside of the country at risk of high penalties. Sending an international wire transfer was a multi-day operation that probably involved telex messages and several phone calls.
Today you can send money instantly across the European continent in a single currency at essentially zero cost. The USA is also catching up and finally bringing their banks to the 21st century with Fedwire. Everybody has multiple credit cards and uses them for online shopping across the world. Any physical product you might imagine can be ordered from China with a one-click digital payment.
None of these improvements were thanks to Bitcoin or any other cryptocurrency.
> My next question is are there downsides to proof-of-stake, and why has bitcoin not moved towards it?
There are minor downsides in theory. Proof-of-stake is a bit less "democratic" and gives more voting share to those who have more money, vs. just are mining. In practice, proof-of-stake coins seem to be doing fine. The main one here is Ethereum.
The main reason Bitcoin hasn't is due to inertia and the interest for miners (who do proof-of-work) to use their democratic power to keep bitcoin invested in proof-of-work.
Proof-of-stake ruins it's security with a rich get richer endgame where the stakers concentrate until it's not distributed enough and one entity or group can collude and control the system and there's no way to exit that state.
Wasn't there a few times when one of the large cryptocurriencies were almost under control of large mining pools where their combined computation would have gone over half? That seems like another "who has more money".
> My next question is are there downsides to proof-of-stake, and why has bitcoin not moved towards it?
The main threat against any cryptocurrency is that a malicious actor will gain control of 51% of the voting power of the system, and use it in nefarious ways that ultimately break the cryptocurrency. Different Proof-of-X systems handle that problem in different ways.
It's generally considered that Proof-of-Work is easier to 51% attack, but also easier to recover from that Proof-of-Stake. The attack and recovery both use the same mechanism - add more hardware mining power to the system. There is no hard limit on this baked into the system, it's just a matter of how much mining power is available to purchase irl. And recovery can be accomplished without having to hard fork the network.
Proof-of-Stake on the other hand may be more difficult to 51% attack since it requires an attacker to obtain 51% of all the currency value in the system. But if this is accomplished, then it's difficult or impossible for the honest participants to rectify, since there's no more currency available to purchase. The attacker isn't going to sell them any of his 51%. So there's an inherent hard limit baked into the system, and the attacker now has 51% of it (including 51% of all newly created currency as well, since new currency is created by staking existing currency). The only fix is for the honest participants to hard-fork the network and create a new version of it that excludes the attacker. (There are other mitigations like slashing for malicious behavior designed to prevent attackers from gaining 51% in the first place).
There are other differences, but I believe those are the main ones, and one reason why Bitcoin hasn't moved to it.
I think that the best solution would be gold.
I would change the emission so as to deter speculation and instead make it fair across generations: fix the block reward. I would make it as simple as possible so as to better stand the test of time.
Proof of stake is superior. The downside others are saying has been proven false time after time but bitcoiners continue to spread the misinformation because Bitcoin relies on people not understanding it's downside.
I've also been fascinated by bitcoin but never made the leap.
The problem I always come back to is that it isn't a currency, a store of value, private, and I disagree with bitcoin's approach to decentralization. (A long list, I know. Every couple years I get the itch then rediscover all my complaints).
Attempting to create a decentralized currency based on anything other than a supply-constrained natural resource is simply a losing game as far as I see it. The currency will be based only on promises, belief, and trust. A decentralized network is more akin to a Mexican standoff, trust and belief aren't what keep everyone from pulling the trigger.
but most national currencies have long since abandoned of the idea of being backed by physical resources, and have shifted towards promises, belief, and trust. are you saying that de-centralization introduces unique aspects that make physical backing a necessity?
Exactly. State currencies have their issues, but they do at least accept that a currency built only on faith and trust must be centralized.
I am proposing that making a currency decentralized creates certain limitations. Without a central authority its extremely unlikely that a monetary system built on faith will last long. For bitcoin the claim is that the network is what you must have faith in, not a central authority. I don't find that compelling personally, mainly because I haven't found the protocol to be so bulletproof that I only need to trust it and can believe that the network will hold regardless of how many bad actors may attempt to corrupt it (not saying that is happening today, only that it is inevitable with time).
bluntly put you can pay taxes only in that currency and governments have power to enforce it, meanwhile btc has only as much power as currencies you can exchange it to. If you couldn't exchange btc to fiat, it would lose value rapidly.
Binance was not really about Bitcoin, it was more like a shitcoin casino and a money laundering machine.
At least the broader crypto ecosystem mostly moved over to proof-of-stake, even if Bitcoin will probably always be proof-of-work, so at least most of their Ponzi schemes aren't boiling the oceans in the process anymore. Small victories.
Bitcoin can't always be proof-of-work. Given the capped supply, the mining rewards will eventually diminish to the point that the network is no longer secure. It will have to transition to proof-of-stake or some other mechanism long before that happens.
It intends to rely on fees, i.e. to have a constant backlog of high fee paying transactions. We'll see how that plays out within a few decades as the block subsidy becomes insignificant.
Transaction volume goes up and down. Just look at ETH gas prices - varying between 1 and 1000 month-to-month. BTC holders aren't going to be OK with a temporary lull in transactions leading to a double-spend attack etc.
I agree it seems wildly optimistic.
We are still waiting for AI (Deep Learning) to do the same and move to efficient alternatives without incinerating the environment and consuming the oceans to cool their GPUs whilst training and doing inference on their AI models.
So many years, yet no practical efficient solutions currently in production to reduce the emissions AI is producing. Much more urgent than crypto since that already has largely moved to proof-of-stake.
Seems like a privileged point of view if you live somewhere with a mostly stable currency (ie not rapidly inflating currency) and easy access to banking
According to the same logic, life is also a negative sum game.
All currencies are negative sum when you only consider minting and transaction costs.
So where’s the productive output?
This is correct, All currencies have transaction costs, but compete on having lower transaction cost than the alternative. The theoretical maximum is zero transaction cost for a transaction. It cant go positive. Components of transaction cost are triangulation, transfer, and trust. Currencies attempt to lower the cost of the transfer and trust components.
Any positive value a currency claims to have as method for settling transactions is just a differential with another method.
There is a cost to going to an ATM and carrying USD cash, but it is lower than carrying around 100lbs of cabbages to barter with.
Don't forget externalities. E.g. you can get a fee-free bank account with fee-free cash withdrawals, courtesy of the bank being able to loan out that money under fractional-reserve restrictions. In that sense transactions can pay for themselves. Presumably nobody would print money if it wasn't being put to use. Hence, novel currencies can enable novel business models and potentially do more than just lower transaction costs in a zero-sum way. (Admittedly the value of such business models at present, e.g. crypto scams, is somewhat debatable)
Im not sure I follow what you are saying.
What externalities are you talking about?
What does do you mean by a transaction to paying for itself?
What does it mean to lower transaction costs in a zero-sum way? This seems like a contradiction
> What externalities are you talking about?
Economic activity. Switching from free banking [1] to a centralised currency made trade easier in America which increased the amount of trade. It's why monetary unions work [2].
Bitcoin, similarly, has enabled certain modes of trade that previously didn't exist.
[1] https://en.wikipedia.org/wiki/Free_banking
[2] https://ciaotest.cc.columbia.edu/olj/cato/v24n1-2/cato_v24n1...
I think that is more of consequence resulting from lower transaction costs, rather than an economic externality. That said, I understand the definitions of externality is changing in popular usage.
> that is more of consequence resulting from lower transaction costs, rather than an economic externality
An externality is "an indirect cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity" [1]. If Visa reduced its fees, the merchant's additional profit is an externality.
> understand the definitions of externality is changing in popular usage
Third-party economic consequences have always been the definition [2].
As I see it, I think the distinction between consequences and externalities is that externalities are applied to cost and pricing, but not concepts.
Wikipedia doesn't go too deep into when externality analysis is appropriate or useful, but hints at this in the following sentence to the one you quoted.
>Externalities can be considered as unpriced components that are involved in either consumer or producer market transactions
Something like the advent of centralized currency isnt a priced good or action, so it doesnt make sense to say it has a positive externality (e.g the transaction price of "centralized currency adoption" is not a priced object).
This is why it is more appropriate to say something like the advent of centralized currency has consequences instead.
Regarding the Visa example, the merchant isn't a uninvolved 3rd party, so the profit is not an externality. Value on the table during an economic exchange is not an externality. Similarly, the value created or lost for each interacting party is not an externality.
One more thoughts on common externality misconception.
The general connotation is that externalities describe pricing failure and market failure (e.g. pollution). The usefulness externality analysis breaks down quickly when you move from realized external costs or benefits to opportunity costs or benefits.
If a $1 pill saves a worker's life, is the value they make for others over the rest of their life an externality. Technically yes. If you sell them a pill again a year later, the same is true.
This illustrates how externalities can be duplicative and should not be confused with pricing errors.
At least they don't take people's jobs away or threaten / replace them. Unlike AI, which also burns GPUs, emits CO2 and the money is all evaporated into inference and training costs with little to no efficient alternatives to reduce it and also wasting tons of water.
Cryptocurrencies at least have alternative efficient methods of consensus, such as proof-of-stake making it possible to reduce the said resources as much as 95%.
AI (Deep Learning) still does not have practical efficient and viable greener alternatives to neither inference or training in production.
If you think crypto is a zero sum game, try fiat!
> GPUs burned
Bitcoin doesn't use GPUs, just ASICs. You may be thinking of Ethereum or others.
Ethereum doesn't use GPUs. You may be thinking of others.
Journalist: "What are you going to do next??"
CZ: "I'm buying Disney World!"
Well played.
Tbh it will be curious to see next steps.
Hope he has something in place for the kidnap risk. Also hope his lawyers credibly claim they will demand continual proof-of-life to engage, otherwise kidnapping might not be the end to it.
CZ was at Lompoch I take it at a Low?
Far more likely he was at the (a?) satellite camp at Lompoc. Minimum security satellite camps share a small percentage of their facilities with a nearby low or medium:
R&D (that's Receiving & Discharge to you), warehouse, mail center.
FYI, Lompoc is pronounced Lom-poke to the townies. Not sure how the inmates pronounce it.
Meanwhile, SBF is settling right into prison gang life:
https://www.reddit.com/r/wallstreetbets/comments/1av88z5/fir...
No tats visible in the pic, tho.
It was being reported that he is now sharing a space with Sean “Diddy” Combs.
There’s a joke in there about which of the two screwed more people…
He's leveled up to expert level polycule
That was from February. Can't seem to find anything more recent.
He’s probably being considered by Trump for a cabinet position
Crime pays?
"He got his bag"
60 billion is a beautiful payday. That's now clean (hopeully), he can now start something else.