Of course not. HN Headcount Guy™ sincerely believes anything that isn’t engineering (and perhaps occasionally a single support person who also delivers the catered lunches and does the marketing “work”) doesn’t exist.
Coinbase is a double exception, they didn't just ask for regulatory approval for their lending product, they asked for permission to file the application.
Can't wait for the next round of crypto hype, excited to see mew use cases along with new scams.
businessofapps.com claims they only do 8M transactions per month, and have/had 4500 employees, so 8M transactions / 4.5K employees / 20 working days/month that's 88 transactions to post per day.
They don't need datacenters, quill pens and paper accounting could handle that 200 years ago with about 3 hours work per day.
Generally supermarket cashiers can do somewhat less than 30 transactions per hour, so I think its justified they should be able to do all the accounting manually in three hours.
I could open a "full service" gas station with dudes to fill the tank and wipe the windshield and upsell services. It varies by state, but nobody put full service gas stations out of business where I live. The market wiped them out; just can't run full service, doesn't mean the workers didn't sweat enough or the market wasn't competitive enough. People won't pay what it costs to run, so they don't run that anymore. Wash your own windshield and pump your own gas.
The other problem is its a form of sophistry to react to "the absolute numbers are awful" with a prayer to the efficient market hypothesis like "why hasn't a more successful competitor arisen". That deflects from the original question in a sophistry manner, not answers it. Sure, I'm a believer too, but can't answer a technical question with a prayer. The original question stands unanswered, why are the absolute numbers so utterly awful?
Note I'm a happy customer, it would be nice for them not to go out of business, but with those numbers...
I agree, but 1% of society holds more wealth than the bottom 50%. To a passing observer of crypto, they see that a few have extreme amounts of wealth, just like every other currency, and think everything seems normal.
They don't see the difference in mechanisms. Getting rich through pump and dump vs getting rich through making or doing something people find valuable.
I think we're past believing that our top .1% is bringing value that's worth billions of times more than the rest of the population.
They're all hoarding wealth and offloading risk on others, it's just that in comparison, the crypto-rich are not (yet?) a social class with an army of lobbyists on its payroll.
> I think we're past believing that our top .1% is bringing value that's worth billions of times more than the rest of the population.
Fortunately, we do not have to rely on our beliefs here, we have an objective measure, which we call "money".
If someone starts a company in their garage, and a decade later that company is worth few billions of dollars then that's the value this person brought to society - because people willingly paid them those billions of dollars for their product/service.
Of course the whole logic breaks down with purely speculative financial assets such as crypto.
Nobel prize winners are bad example, because their work is usually theoretical, hard to put to use. If someone writes a paper tomorrow proving that faster-than-light travel is possible then the only immediate value it brings is that you now have a nice lecture to read in bed. There are still thousands man-years of work required before an actual spaceship will be available for sale in your local dealership.
Alternatively, you could let people pay whatever they want for the product. That would also give you a very accurate and objective measure of how people value the product.
What? You don't think the two measures would converge? In either case, the one with more market power would use that to improve their side of the bargain? Who'd've thunk...
That would not tell you anything about how much someone values a product. Everyone will happily pay 0 for something they value at 10. It's a fantastic deal for them. Too discover the true value you have to raise the price until they refuse to pay it. Which is what a market is intended to do.
> If someone starts a company in their garage, and a decade later that company is worth few billions of dollars then that's the value this person brought to society - because people willingly paid them those billions of dollars for their product/service.
What was the value FTX or Theranos brought to society?
You'll note that when it goes wrong in each of those cases, we lock the perpetrators up in a box. And their company's value drops according to the new information.
Totally, because the _expected future value_ changes with the new information. If they had actually created something of value, that wouldn't change because of new information. But they hadn't, and yet their companies were worth billions.
"Provides value" is loosely connected to "expected future value", but it's certainly not the same thing.
I agree. Except creating something of value isn't the same as company value - company value should be derived from ability to make money at a certain rate while spending it at a certain rate. This does include what you say, but with some extra bits.
But back to your point: it is possible to simulate either or both of those things and have eager investors get in early, but that's why they (probably) get in for less money than if the company had done what it claimed. They took a risk, and taking a risk is one of the valuable contributions one can make to a company.
Average wealth of the top 0.1% in the US is ~$50m. Average wealth overall is ~$100k. So it’s not billions of times more, it’s ~thousands of times more.
Most high net worth individuals keep their wealth in stocks and shares. This is not what hoarding means.
You're missing the difference between ownership and money. People who make extremely useful companies own parts of them. They don't have that money in cash. The only thing they can do with that ownership is to sell it, which the market also seems a valuable thing. They have to constantly do valuable things to have money. They aren't like a government, which can lock you in a box for not paying them. Companies have to earn it.
Inheritance makes providing value worth doing past the point of one's own comfort. Many people's work becomes most valuable in their latter years, and so we would want them to keep working and pass on wealth, as opposed to either stopping working or just splashing their money out on nonsense.
The principle of being able to own things and work to one's own good, and the good of those whom one choosing to transfer it to, is the fundamental basis on which we now exist in the most advanced societies the world has ever seen, and the most rapidly advancing societies. It's not perfect, but every authoritarian attempt to make things better by centralising power in the name of fairness has gone terribly.
From the perspective of those born poor with little prospect of improving their station, I don’t see how it’s obvious that the people who inherited wealth are more deserving of the money than the people who got it by scamming.
The legitimacy of the social contract that respects private ownership depends on the prospect of a good life for those who work for it.
When people lose belief in that prospect, they have no reason to respect the rules of that social contract.
I don't think you can lump people unable to improve their lot into a homogenous group all unable to see what money is. Some will; some won't. And that doesn't make money something else than what it is.
I agree that as individual liberty is eroded, and it's easier to just become yet another BS cog in a giant BS machine, with no incentives to make anything better, then you can descend into something authoritarian that promises a better way, such as our previous attempts at socialism, but the way out isn't to reinforce (or repeat) incorrect assumptions about money. It's to campaign for more liberty and fairness.
And the solution is something where 0,000001% society hold 50% of the coins/"wealth"?
The reason bitcoin will never be the main currency is, that even in case case crypto will ever be technically/UX viable as a currency (is very, very, very far from it) nobody of the 99% that do not own bitcoin now will choose bitcoin as the main currency. They will choose some most likely government started crypto where they can exchange their current money 1:1 and not buy into some stupid old thing that gives them nothing.
So if crypto ever succeeds it is the death of bitcoin as the new system that converts from the old will win by a million miles
If anything the downturn will create even more nonsense, as people try to keep the money flowing in. If you think of crypto writ large as a sort of accidental self-organising distributed Ponzi scheme (which isn't unreasonable), then this is exactly what you'd expect; traditionally towards the end they get weirder and weirder, as people need money coming in by whatever means.
Precisely, it will just get weirder and more extreme until it explodes. These are all spasms of a dying organism. The addiction is so massive though that there will be some kind of backlash or a shift to something else. It's like when the authorities cracked down on money laundering through banks, for every one they killed four new ones sprang up.
It may be rational behavior though. If the insider view is that the equity is worthless it makes sense to explore every possible option, no matter how weird.
There's a fundamental floor of value where "in the bad old days" I once bought a specialty swiss army knife (a very custom gift; details utterly irrelevant) and I wanted the knife enough to pay middlemen about 20% overall to turn by USD into ... whatever the swiss were using at the time. It used to cost twice as much money to move money around the world than to move a small consumer good around the world. That's just how the world was. Weird to think it would have been half the cost to mail the swiss a gold coin than to transfer money all legally.
Clearly, I didn't think the middlemen provided 20% of value, but I was willing to cough up the cash to perform the overall transaction. If a cheaper money transfer option existed I'd never have used the middlemen, whom provided nothing of value to me for their 20% charge. Cheaper options do exist now...
There's a lot of hand waving, but if you trust paypal, which you probably should not, the cost of moving money internationally has dropped to about 5% and the cost of currency conversions has dropped to 4%. I would assume they double dip and converting USD in USA to swiss whatevers in Switzerland would cost about 9%. Then of course there are withdrawal fees and so forth stacked on top.
Anyway, lets say you can turn and burn bitcoin in "somewhat less than an hour" so simply divide total international daily transaction volume by twenty five or so and that seems a reasonable starting point for a store of value. If the price gets too high making it cost more to use BTC than paypal, then the BTC transaction volume would seem to drop until prices drop and people start using BTC again.
Obviously for various UI and enduser reasons I would not expect all international trade to flow over either BTC or paypal or the legacy banking system, but "enough" should be there to support the BTC price at some level.
I ordered equipment for a company from a European seller , and because I wasn't a VC backed technology startup, instead focused on physical goods- there was no army of people to help me set up an international bank for my company. So what I did was drop them some bitcoin. Just getting the wire approvals would've taken longer.
Yea this is what decriers don't explain. I may not view at as a strong currency for which it was intended but it's undeniable it has become a store for speculative value that isn't going away anytime soon.
There's a lot of trash in the crypto world but also some valid projects.
I don't know how you equate "speculative value" with "valid projects". Bitcoin has value because people are long on crypto. "Long" has an end date - just because it's 50 years instead of 10 years doesn't mean it's not coming.
If there's less crypto being issued than fiat, and demand were constant as a % of people's wealth (which I admit is a big if), then crypto is bound to go up.
There is no end date to government currency debasement.
This is to say that if demand outpaces supply, price is going to go up. However, this is true of any asset. So why mention specifically 'crypto', as if there was something magical about 'crypto' that means it's bound to go up?
My point is yes, it is true of any asset. You might as well own cans of beans. But the purpose is to stave off the effects of monetary expansion while staying liquid. Cryptocurrency is in a special niche in that parameter space.
While other assets are bound to provide long-term returns greater than inflation (for example, stocks and bonds [1]), cryptocurrency can not surpass inflation long-term, but it still does so while demand is growing. In addition, even after it reaches a stable demand (which I reckon will be in 5-10 years, with market saturation), it will be a means of diversification (like gold is currently).
I don't think I'm following you. You're using technical terms such as 'parameter space' in the wrong context. Maybe you want to sound clever, but you aren't making a lot of sense.
The supply of crypto isn't limited because people can just mint new chains. And of course, the more the number goes up on a chain the less attractive it is to actual users as opposed to holders.
> The supply of crypto isn't limited because people can just mint new chains.
It is silly to lump all crypto coins in a single bucket. BTC is very different than DOGE or SHIB. I guess your parent post was about BTC supply being limited.
Interesting you say that, because it's actually very similar to Doge (though of course, dissimilar to Shib, because shib is an ERC20 token on Ethereum)
I didn't say they were similar value, this is a strawman.
But if we're looking at art, and you show me the original Starry night, a print, and then a picture of the kool-aid man busting through a wall, and ask me which 2 are most similar, I'm going to pick the starry nights
> I didn't say they were similar value, this is a strawman.
You actually said that - "Interesting you say that, because it's actually very similar to Doge". Especially when the context was about the value of crypto in relation to supply and demand. Given that you are familiar with SHIB being an ERC20, I am fairly certain you are aware of DOGE's supply being nothing like BTC. And yet you conflate the two. Just for FUD?
Just like amongst stamp collectors, a certain group will simply never sell. They'd rather never get a cent for they collectibles than sell at a price lower than what they feel would be "appropriate". Trade activies in irrational markets like that lie somewhere on the spectrum between the extremes of rational trade and belief affirmation ritual.
There it is. Rings incredibly hollow when the same line was trotted out just a few months ago with zero impact or meaning behind the statement, given it clearly didn't change anything.
That way over hired. The company missed the nft wave. And their expenses went out of control. A good ceo would have recognized during the first round of layoffs a deeper cut was necessary to bring the company to profitability.
They literally had people with 1-2 years of experience conducting interviews last I remember. They were on an unhinged hiring spree before they ipo’d, so this was coming no matter what.
It’s indicative of a very inexperienced staff or one that is desperate for interviewers, presumably because they are binge hiring. There are places that go out of their way to get very junior people interviewing early on purpose but in those cases there is usually someone more senior also involved.
For most places though it means they were throwing whoever they could find at the interviews.
Why would you need someone with decades of experience to hire an intern or a new grad?
It's customary for a lot of companies to have an interviewer which is above or _at_ the level that you are recruiting. Therefore someone with a year or two of experience is perfectly able to hire an intern or someone that will be hired at the same level as them.
Looking at Amazon for example, "Hire and Develop the Best" is one of the leadership principles, and you CANNOT be promoted if you don't conduct interviews.
Inexperienced engineers simply don’t have the experience to make good hiring decisions. Having them being involved in the process is fine, but they should be shadowing someone more senior.
That little experience makes it hard to judge applicant quality well and means they probably aren’t answering questions accurately. It’s a dead tell of a company which has a shortage of experienced staff and is growing too quickly — very strongly reminiscent of the dotcom bubble where people had the same “number go up!” mentality & some would openly say they were just looking busy until the IPO.
It’s was an exaggeration, but the point still stands. Two years experience is “just graduated” into the workforce. The lifespan of a worker is 30+ years.
I think there’s also something important about that period where you’re moving from only doing what other people instruct you to do towards making decisions and supporting them over time.
It's certainly possible, more so in the early days, but it's relatively rare that you see a successful company continue to have people with only a year or two professional experience making hiring decisions. If those people have solid backgrounds that approach isn't necessarily disastrous but it'll be limited - e.g. a fresh CS major doing a startup will probably hire people who can create working code, but they're probably going to over-value certain academic characteristics over practical engineering and miss solid candidates or (worse) expose the company to liability. Inexperience can also just lead to things like hiring people who seem like they're someone you'd want to hang out with.
Note also that I would draw a distinction between 1-2 years of total experience and, say, someone transitioning from academia to industry. Someone who was, say, a successful grad student likely also accumulated a fair amount of other life experience that a 22 year old is unlikely to have.
The only consistent thing yet hear about the FAANG interview process is how universally bad it is, but also how you should just play along to get your $300k/yr salary.
There's nothing inherently wrong with having junior engineers conducting interviews. But if a junior engineer is on my interview panel, I'm going to politely decline and end the process. A junior is not going to have the experience to accurately evaluate someone with close to two decades of experience writing software. Same goes for kids with < 10 years of experience who call themselves "senior," which I find happens often at FAANG.
Last I was interviewed by a junior, I brought up a concept for which he had never heard of. Even after explaining it in great detail, he argued with me for half the interview trying to explain why such a system would never hold in practice. Needless to say, I did not get the position. Total waste of my time.
I am a former employee of BladeLogic, and the founder of Puppet used to work there. In 2008, BladeLogic's largest customer hired me (Bank of America.)
BofA outsourced my job, so I needed somewhere to work, and I reached out to Puppet.
I had an interview schedule with four Puppet employees. 75% of them didn't show up. The one person who DID show up had started the day before my interview.
You can find me on LinkedIn, all the history is there.
I spent most of the last two years working on an NFT anti-fraud solution[0].
My two prior startups were (essentially) in telecom and healthcare. Coming from these well established, highly regulated, somewhat legacy industries to "crypto"/NFTs/web3 was a very interesting experience, to say the least. Users/potential customers for our solution ranged from creators to marketplaces to collectors/investors. Several very general and broad observations:
1) The anonymous/pseudo anonymous nature of the space is bizarre. I would have multiple voice-only meetings with people using aliases and avatars for all communications. To this day I only know some people as "Mango Man" or whatever. Meeting people who could just burn down an entire identity and start fresh when things go sideways is an indicator of the nature of the space.
2) There is a general lack of "adults in the room". I would get on a call with the Founder/CEO of a marketplace or project that was valued (at least) in the > $100m range and hear and see things that were horrifying. My final breaking point was a call with the founder of a well known highly valued NFT marketplace who showed up (Tuesday morning, 10 AM) obviously high on some sort of stimulant. Within the first five minutes of the call they repeated their mantra of "I'm just trying to get made, paid, and laid" several times. They spent the remainder of the (very brief) call describing all kinds of things I'm pretty sure are illegal. On an introductory call.
3) The fraud and overall criminality is well beyond what is publicly known from FTX, Celsius, web3 is going great, etc. The most common reply regarding our solution was along the lines of "Why would we want this? We make our money on fraud". I was frequently reminded me of the scene in The Big Short when they talk to mortgage brokers and come away saying "Why are they confessing?" with the response being "They're not confessing, they're bragging".
4) Any semblance of professionalism and basic standards is generally non-existent. A HEAD OF LEGAL for a well known exchange (Superbowl commercial) would say and post things on LinkedIn that would get you terminated immediately in any other field. Daily.
5) The more technical startups/partners (infrastructure providers, etc) were generally the best to work with. However, the profiles of the founders and team were interesting - many of them had 1-2 years of junior experience at a FAANG (for better or worse).
6) VC in the space is even more wild than what has been reported in the media. I'll just leave this one at that.
7) Many people in the space seemed to just appear from nowhere. Like some of the technical founders with 1-2 years of junior experience and SBF who had a few years doing something at Jane Street I often times couldn't figure out where these people came from or why/how they were here. Of course this is common in tech (from Google to Facebook founders often "appear out of nowhere") but it was still extremely bizarre for SBF type characters to be dealing with hundreds of millions or billions of dollars of other people's money with either no reputation/background or a shady one.
8) In my 25 years of experience I've never dealt with a more generally unimpressive group of people. After nearly two years in the space, meeting hundreds of people, there are only a handful I want to maintain any sort of personal or professional relationship with.
With my background I knew I would experience some culture shock (for lack of a better term) entering a space that was still (after 14 years) the Wild West. What I experienced was (almost universally) so beyond the pale I finally ran away screaming. I spent more and more of my time and energy attempting to motivate myself and the team by focusing on our efforts to do good in the space but after all of this no amount of rationalizing could make up for the cesspool I was living ...
> The anonymous/pseudo anonymous nature of the space is bizarre. I would have multiple voice-only meetings with people using aliases and avatars for all communications. To this day I only know some people as "Mango Man" or whatever. Meeting people who could just burn down an entire identity and start fresh when things go sideways is an indicator of the nature of the space.
I can't blame them. It involves money and it's a new and risky and currently unregulated space. Things go sideways unexpectedly or the SEC changes their rules suddenly (see them possibly classifying a bunch of tokens as securities when they didn't before, with all the KYC and other regulations that requires) and you run the risk of having both users that went too deep into it (like exist for damn near everything, including Pokemon cards) trying to kill you and SEC trying to put you in jail.
I've done a little code assistance on a web3 project (mostly just helping a friend who's doing the actual coding, when they have questions) and I'm doing my best not to have my name associated with it, just in case, even though I think the project is trying to make positive changes and will be one of the 'good' ones eventually.
For the longest time I avoided any jobs involving money specifically because I didn't want to risk screwing something up and causing a lot of pain or lost money for people (reason why I avoided healthcare too). And yet now I've got professional experience working for a healthcare company and as a consultant for a major financial company, so I ended up down that path anyway.
The genesis story is early 2021 I was talking to my sister (who is a respected digital artist) and she asked me about "these NFT things". Being technical I was of course aware of them. She then followed up with "Yeah, my friends and I have tried them but all of our stuff just ends up stolen anyway". Needless to say I was intrigued.
My general thinking was - this stuff is here, people are buying into it for whatever reasons, and the more I look the more fraud and shady stuff there is. Broadly speaking I tend to have a "harm reduction" mindset - everything from safe injection sites to crypto. For some things it just seems like people can't help themselves so once the "cat is out of the bag" there's value and nobility in making inherently risky things at least somewhat safer. I know there are plenty of people here on HN and elsewhere with the mindset of "they're idiots, they deserve to lose everything" and/or a desire to just watch the entire thing burn. I (clearly) have a more measured and nuanced take.
That said, my experience ended up being less like "safe injection sites" and more like "this entire space IS the cartel and there are few (if any) people doing any good whatsoever". As I noted I can't recall anything positive or beneficial in my time dealing with it. The impact on my mental health and general feeling of spitting in the ocean finally drove me out.
> 1) The anonymous/pseudo anonymous nature of the space is bizarre. I would have multiple voice-only meetings with people using aliases and avatars for all communications. To this day I only know some people as "Mango Man" or whatever. Meeting people who could just burn down an entire identity and start fresh when things go sideways is an indicator of the nature of the space.
Most employees at Kraken don't know what the CTO looks like. He never turns the camera on during meetings and as far as I'm aware hasn't showed up to the in person events. He wrote most of the legacy backend.
This was mostly a curiosity though. None of the other points apply to him. He was professional.
> 6) VC in the space is even more wild than what has been reported in the media. I'll just leave this one at that.
I know a guy who went to a crypto hackathon (which is a chance for devs and start ups to show off for VCs.). He said a disturbing number of VCs, mostly creepy old guys who got rich off crypto, showed up with obvious asian/eastern European prostitutes or sugar babies.
> Most employees at Kraken don't know what the CTO looks like. He never turns the camera on during meetings and as far as I'm aware hasn't showed up to the in person events. He wrote most of the legacy backend.
> This was mostly a curiosity though. None of the other points apply to him. He was professional.
Call me "old school" but the CTO of a company valued at > $10B that manages who-knows-how-much in terms of customer assets shouldn't be able to do this. Frankly, it's ridiculous - can you imagine the CTO of Bank of America being an avatar/unknown? Seriously. Where is an adult to say "turn your camera on, show up to stuff, use your real name, or you're out"?!?!
Regarding the "sugar babies" and what-not - yes. Just another data point that demonstrates how ridiculously shady and so far beyond acceptable behavior, practice, and standards the space is.
I interviewed with them. It was quite peculiar. I asked them how they were going to manage the extreme planned growth rate and no one had an answer. That was in late May.
(They didn't offer me a position for a given reason that was also weird. Strange place.)
"Therefore, I've made the difficult decision to reduce our operating expense(1) by about 25% Q/Q, which includes letting go of about 950 people
(..)
(1) Comprising Sales and Marketing Expenses, Technology and Development + General & Administrative Expenses, including stock-based compensation and excluding restructuring expenses and Other operating expenses"
(..)
In futher news, highly recommend Ben Thompson's recent interview with Brian Armstrong.
A lot is being demonstrated with it being on your resume:
1) enjoying the technical challenges of crypto is to me like a guilty pleasure. So do I, but I don’t tell the world about it (outside of this HN comment).
2) such a high % of the people involved in crypto are doing something shady or illegal. Personally I would bet that only a slim slim slim monitory of US crypto holders pay their taxes accurately. For any top security clearance jobs in the US, you can’t have any major outstanding debts, because they could be used as leverage against you. In the same way, hiring a cryptobro looks like an unnecessary risk to me.
3) they probably can’t do the job I need them to do. For example, any front end change to our sales funnel requires a sign off from compliance. Can I trust a cryptobro to work in an environment with stricter rules & compliance requirements? Not really.
Sure, but then again I wouldn't work for a company whose CEO thinks "irl_chad" is a cool name, and talks about being seen in Kyiv in "designer and an iced out Rolex"
I'd probably have the same opinion if the resume I got was from someone who worked in the porn industry (developing websites/infrastructure etc) - yea, it is a lot of the same technologies I would be using in a non-porn company, but like it or not, it does give you a bit of insight into someones personality based on the types of jobs they choose to pursue.
To a degree yes it does, since they will almost certainly have to work in a team with other people.
Being involved in crypto related things is a huge red flag that the person is most likely deeply immoral, greedy and opportunistic, which are traits that will most likely make the person hard to work with for the other team members.
I think throwing them out entirely might be a bit extreme, but stamping them with a big fat red-flag and moving them to the bottom of the pile seems totally reasonable to me.
> Being involved in crypto related things is a huge red flag that the person is most likely deeply immoral, greedy and opportunistic ...
This is a huge assumption to make about someone's character when all you know is that they were employed in $CRYPTO_COMPANY_X FROM $START_DATE TO $END_DATE.
You are forever tarring someone you don't even know.
If you are involved in recruitment it might be worth taking a look at those guesses you are making.
Godwin's Law: Let me put it to you this way, would you immediately dismiss or red-flag someone who previously worked at IBM?
While I'm not neither into or working into crypto - this seems like a poor decisions. I'm sure the field has interesting technical challenges and one could join such a company for them.
There’s a lot of us that work in industries we have no affinity to. Lots of good devs in crypto, porn, society ruining media, society ruining social media, defense, war, and just out right saas scams.
Not that I particularly liked GP’s comment, but this I take issue with. You’ve always got a choice to not join a company, and you’ve got a choice to start your career deciding not to work in particular areas. I’ve always been clear with myself that I’d never work in defence for example.
Then you don’t live in the real world. I’m not turning down a job in an industry that’s just as silly as any other and provides me a livelihood that gets ever harder.
The same as I did with the realities of Afghanistan, or Iraq, or Syria, or any of the other wars that have happened since I’ve been professionally developing software. War is a reality, but it’s also something I can choose to not engage in. It’s down to you to pick the things you feel are important to you, and if that’s (for example) gambling instead of defence then you do you.
Discrimination based on life choices is called consequences. The Unabomber, while a genius mathematician, will never be offered a position in my company.
You're comparing someone having worked in crypto with a terrorist? If you have to go that far to make your argument make sense, maybe your argument is not all that solid.
I hate crypto as much as the next guy, but that's nonsense, sorry. You are filtering out possibly good people. There are still, even now in 2023, so much jobs that are crypto-related, and people still need something to eat.
If you are a Rust developer, you pretty much need to do blockchain stuff, as most of the Rust jobs are related to that. And so on.
It tracks with what I've seen in NYC. “Most” might be a slight exaggeration, but not by much.
(I'm hoping to put a tiny dent in that by growing our non-crypto Rust team over the next couple of years. And I won't hold anyone's former means of putting bread on the table against them ;))
Looking for Rust jobs on LinkedIn used to yield mostly postings in crypto. That may not be the case anymore with the downturn, my guess is that there are just fewer rust jobs now that the crypto ones are gone.
I think the reason is simply that crypto companies didn't have the clout or stability of big tech and also the sector has a poor reputation amongst engineers so they pick hip languages to compensate. Like "Yes I know, working in crypto is terrible but did you think about how you could write Rust everyday instead of Java??"
An awful lot of the well paid rust jobs (good comp, good bennies) are in the blockchain space.
I know a handful of rust developers who refuse to work on anything that touches a blockchain, and they regularly express frustration that the majority of rust jobs they see advertised are in that space.
What if they just wanted to earn good money or do not care in what area they work in? I hate crypto, because my motto is "all crypto is a scam, always", but given the chance to earn a lot of money with it, I wouldn't mind.
Are you one of those CEOs that needs sycophant applicants that pretend working at your company on your product is their biggest dream?
I have written boiler room scam callcenter software in direct violation of a law that doesn't allow for fanned out autodialing and autohangup to minimize agent downtime. So what?
So you'd be an immediate no hire because I wouldn't want to have someone with clear lack of ethics - literally stealing people's life savings - working for me.
Depending on what sort of crypto projects they worked on, you might be missing on amazing Golang devs experienced in building large, distributed systems. Remember: sometimes the programming language you love is used in a certain type of industry.
It works both ways - a CEO throwing out resumes with prejudice means the candidate doesn't have to suffer a prejudiced CEO, "big boy company" already says a lot about the culture you're trying to foster.
Well put. There’s the adage that says don’t judge people as you have literally no idea what they might be going through. In this case you have no idea why they did a stint in crypto. Now, if during an interview it’s clear that someone has a strong ideological connection to crypto (or anything really), and you want to foster more of a “make it work“ engineering culture, then by all means don’t offer the position. Excluding people based on whims like this will not set your company up for success.
Crypto people and big company people are not distinct groups. You can find people that worked in large and small companies that never touched crypto, but also find people who worked in large crypto. Coinbase is a great example, as with their 6k+ peak employees count they definitely were are larger company.
A somewhat flawed filtering method, since engineers don't have to belive in the technology that they are working on.
But I totally understand your point of view as well.
> To me, seeing crypto on a resume means the engineer is a true believer in viability of crypto, and therefore not smart enough to do well in a big boy company.
I don't believe in crypto myself - but your statement sounds a bit egotistic. Should employees work at a crypto company (such as CoinBase) only if they truly believe in crypto and not for say, a good pay? The second statement about smartness too, doesn't seem like a good thing to say.
I'm deeply crypto-skeptic but that seems grossly unfair.
I've worked for a number of startups that, in retrospect, had terrible business models. Does that make me a "true believer" in their viability? Maybe, but then I learned better. Or maybe I joined because I needed a paycheck and they had a good offer. Either way, my performance as a developer had nothing to do with the viability of their business model.
Even if you make the argument that "crypto is a terrible idea as a technology, so anyone who engaged with it is stupid", well, again, in a long enough career you maybe make a wrong pick every now and again, especially early on in your career when it's harder to distinguish hype from reality. A good developer would learn from this and be a more valuable employee as a result.
Personally I am past the "crypto is a terrible idea as a technology" phase.
A very significant fraction of crypto companies are basically just running a scam. FTX was the third largest exchange and even they turned out to be fraudulent! At this point if you are involved in crypto, my assumption is that you are knowingly involving yourself in an attempt to scam people.
I have no problem with not being a "true believer" of the company you work for. I do have a problem with willingly working for criminal enterprises. It's not 2014 anymore, you can't close your eyes to the issues inherent to crypto.
That’s an interesting point. But I still wouldn’t include crypto on my resume - instead, leave a gap in the resume, and if the hiring manager asks, explain.
It reminds me of how I see a lot of applicants to LinkedIn job posts with people who list their work history all the way back, past their time in the industry. Eg McDonald’s cashier. You may think that has a positive effect (has experience talking to customers, can be trusted to handle petty cash, held a job even at minimum wage..) but in reality the first thought I have is “did bro really put McDonald’s on a backend dev resume lmfao”
Both these points are unfair to junior developers. Suppose your first job out of college was in crypto? Yeah a mistake, but it shouldn't blacken your entire career, especially if you learned some non-crypto skills in the process. And if it's your first job you need something else in your resume to show you have some non-tech skills and responsibilities. Nothing wrong with cashier in McDonalds, it shows you can work in a team, talk to customers, and deal with pressure.
I can only speak for my own company. I recently (6 months ago) hired a junior web developer. He’s now a senior, and the highest paid engineer in the company.
If you’re a junior developer, and you want to make good money at it, you no longer have hobbies or a life (don’t worry, you get them back when you get good). Instead, all your free time is now dedicated to hobby projects & studying. Of course, only a small % of junior developers want/are capable of that lifestyle (the 10x engineers), and if you’re not one, you’ll just have to suffer making only 80k a year + benefits as a regular junior.
Of the tech companies I or acquaintances have worked at, I've personally 'believed in the viability' of maybe 25%. If the tech / pay is good enough I could see myself work at them for sure since its a job. not all jobs require personal investment.
I now see that the username is IRL_CHAD. I feel stupid for falling for a obvious troll
> I’m an immigrant in Ukraine. I love this country very much. Speak the language, understand the culture, etc.
> After checking out your page, I’m absolutely appalled. I’ve forwarded this to a personal friend who works in the immigration department here.
> Ukraine isn’t your playground to pimp women to men who aren’t successful with them in their own countries.
> Btw you’ve probably seen me around Kyiv in bars/clubs/whatever. I’m the guy always wearing designer + an iced out rolex
Idk man, I think social media has people responding to comments in weird extremes and I just wish everyone could get away from that. Would you really say to someone's face IRL that you won't hire them because they worked in a specific industry? Takes a certain character to be that way...
Well when I lived in a Third World country with no access to international payment methods, Bitcoin was the only way I could pay for books and servers. So yeah, I am sorry my struggle to learn and better myself as an engineer was through something you deem stupid.
Thomas Edison interviewed candidates for research assistant positions, he offered them a bowl of soup. Why? He wanted to see whether they would add salt or pepper to the soup before they tasted it.
Those who did were automatically ruled out. Edison wanted people who didn't make assumptions, since assumptions tend to be innovation killers.
> Edison wanted people who didn't make assumptions, since assumptions tend to be innovation killers.
... this was the man who assumed DC power was superior to Tesla's AC power and made every effort he could to stand in the way of innovations that threatened his own bottom line.
Cool anecdote, but ultimately unrealistic. If I make a job posting on LinkedIn for a front end developer for example, I will get up to 500 (USA) applicants. Filters (such as absolutely no cryptobros) are a tool for finding the best applicant.
There is a definite case for distributed ledgers/databases and decentralization. It works. Its mass use case may not have been found yet, but that does not mean that it wont be found.
Dismissing crypto/blockchain is like dismissing user-generated content that lived in the forums on the fringes of the internet or in the comment sections of blogs. They were looked down and despised by the established mentality 20 years ago. In 10 years, user-generated content became the king.
...
Just like how others said - your behavior does not say 'big boy company'.
You’re getting pushback, but this resonated with me.
So, so, so much of the crypto “industry” is just running scams of various sophistication. Having years of your life dedicated to that industry is signaling something!
> To me, seeing crypto on a resume means the engineer is a true believer in viability of crypto, and therefore not smart enough to do well in a big boy company.
Even the skeptics here are laughing at such an absolutely nonsensical comment like this.
I guess engineers at Square, Twitter, Stripe, Mastercard, Visa, Checkout.com, Google, Meta, etc are not doing well for sure despite still having crypto products and partnerships. /s
As always, absolutist comments like this can be safely ignored and laughed at.
While 20% is a lot - how far back does this bring the headcount? A lot of these companies have what seem to be large reductions in staff but are more of a correction of insane hiring sprees.
I lost a little bit of money investing in crypto on Coinbase (I put about £500 in which shrank to £200 - over the course of past 2 years and for past year I mostly have just had money in sterling - the market looked terrible)
I finally decided yesterday to cash out of coinbase yesterday - they charged me £3 to withdraw my money!!
In the scheme of things I didn't lose that much money - not really. But personally I can't see myself getting back in when Bitcoin goes below 10,000 dollars (which I believe it will in 2023). I think Coinbase share price is heading to junk status. No wonder the employees were selling all their shares when it went public!
I bought some bitc on coinbase in 2015/2016? Around the time that it spiked to 30k and gained some money, but even back then I parted ways with Coinbase anyway, it seemed like a scam made just for them to earn money without risks, like even their quote of a BTC is higher price when you buy and much lower when you sell, and that for me was the breaking point
Your surprise over a £3 fee strikes me as a perfect illustration of crypto: profoundly naive, inexperienced investors getting a hard lesson in how unregulated markets work.
I hope, some years down the line, you take the broader life lesson that anyone promising you money for nothing does not have your best interests at heart.
You make it sound like a £3 transaction fee is evidence of some kind of scamminess or preying on naivety but most normal, regulated investment platforms, crypto or not, come with transaction fees, account fees, fund management fees and so on. Usually they are taking a lot more than £3 from you too. That's even before we get into the world of professional financial "advice" and the commissions they just happen to earn when you buy the one they recommend. Compared to all the ways the traditional investment world seeks to milk you, Coinbase's flat fee per trade looks admirably straightforward.
Mmmm that's a reasonable point - I didn't mind paying fees for the coins, but I do think its a little iffy about fees to withdraw...
On another note, one thing about Coinbase that struck me, was that on the app/website it doesn't actually show you how much money you put in / what the return on your investment is (I used a spreadsheet to track my own investment "success").
I suspect Coinbase does not do this deliberately - as many, many people who invest in Crypto lose money and it doesn't want to highlight this point too much.
£3 fee isn’t a withdrawal fee, it’s a transaction fee to sell your bitcoin for pounds. The actual withdrawal of pounds to you bank account is free.
Likewise, you could withdraw your bitcoin to your own wallet for free. The fee comes when you change from one type of currency to another.
I think the reason they don’t show return on investment is because Coinbase presents itself as an exchange, not an investment platform. The purpose is to facilitate the exchange of currency from one kind to another. They’re not positioning themselves as trying to help you build up retirement nest egg.
The surprise over the $3 fee indicates just how many tricks of the light are used to hide exactly how bad finance is, then make dishonest comparisons to crypto markets.
So I don't agree with your view here. The majority of my savings were in index funds which have done very well over the years. Dipping in to a high risk investment is I think perfectly reasonable. What would be insane is if I kept on investing - or continued to do so even now.
But in the spirit of good will I will take the merits of your comment :)
I had a similar experience to you a few weeks ago. First I paid transaction fees to change my coins into cash, and then Coinbase had the temerity to charge me again to transfer it out! They just had to squeeze a few more dollars out of me on the way out the door. It left a bad taste in my mouth for sure.
Just to clarify - if I were to buy crypto again, I would buy from Coinbase.
I am not positive about the future of crypto though. And I said before it's also telling that I had to use a spreadsheet to look at how much I put in, fees, money lost etc. On Coinbase. Again I suspect it's because a lot of people are losing money and the owners want that information hidden.
This is not true. There are State and Federal restrictions on mass layoffs, which generally require a few months of notice. Giving severance is understood to count as notice. In any case you'd get the money, and you probably wouldn't be useful anyways.
Coinbase is a weird company, because it's got such an obvious comparable: CME Group. CME Group has about 3500 employees, did 1.2bn in revenue last quarter with 680m net income. Then you have coinbase now trimmming to about the same number 3500, 590m revenue and a net income loss of 550m. That's right, as far as I can see, Coinbase loses $1 for every $1 of revenue.
Firstly, I don't see how Coinbase needs as many people as CME. They're meant to be a disruptive start up they should be lean. Secondly, how the hell do they get those unit economics to work? It should be a trivial job, right. People pay you to trade, so how are they losing so much money!? Well, I guess hiring 4,500 people... I think the idea at this point that Coinbase can get their cost structure down to reasonable numbers making them profitable at lower revenue levels is challenging. It's very hard to put that genie back in the bottle.
My best guess is that raising funding helps raise the valuation, especially as they approach IPO. So raise money for the sake of raising the valuation.
You don’t really need the money, but you got it. What are you going to do with it to appease the investors? Well you gotta act like you are doing something with it, especially something that shows growth.
Hire more. Hire more because we imagine more. Keep imagining until imagining doesn’t work anymore. Then fire, and say sorry. Hopefully you sold enough equity at the ridiculous ipo price.
This is no different to other tech companies and startups that have over hired during the low interest hype and have aggressively raised money. It is essentially the VC hype cycle and are meant to dump their holdings on retail once the stock is publicly listed.
We're all just see how tech startups and other companies are getting slaughtered over market conditions and NOW need to cut costs, spend less, hire less and turn a profit rather than continued losses.
The era of "Lose money for decades just like Amazon did and so can we" is over.
Amazon was founded in 1994 and turned their first profit in 2001. A better example would be Uber, which ran negative until they had less than one year of runway remaining and then were somehow allowed to scam pedestrians into keeping their unprofitable taxi business solvent.
Uber lost all of the money all of the original investors gave them, and sold that bag of dog shit to the public. Everyone who bought the IPO lost money.
I interviewed with them last year and while I didn't get the job, looking back now I'm kind of thankful it turned out how it did. From my limited perspective interviewing there, it seems like they started branching out into all things crypto.
One manager I interviewed with explained that they wanted to become the "Amazon of Crypto" where any service related to crypto such as wallets, NFT's, etc are all on Coinbase. It was clear back then to me that Coinbase wanted to dethrone both Metamask as the wallet of choice and OpenSea as the NFT marketplace of choice. You hire a ton of people for these projects but end up letting them all go when they realized those projects weren't going to pan out.
I agree with your sentiment and I think you would agree with this, just wanted to get it out there.
I've seen teams of 10-15 people that do absolutely nothing. Have 10 meetings about specs but space them out over a year, so that by the time the next meeting happens, everyone forgets the entire context of the project... so you have to cover everything again. By the end of year, its gone absolutely no where due to 2-3 layers of bureaucracy. Coinbase _can_ hire good talent... wonder if managing it is the/a problem.
> Coinbase _can_ hire good talent... wonder if managing it is the/a problem.
I've worked at a company where at an individual level people were quite talented, moreso than competitors who did better than them .... but getting anything done required Y different meetings with X different teams, satisfying N different gatekeepers who just want to push their own product on you, avoid stepping on the toes of persons X,Y,Z, etc etc.
Company multiplied in size a few times over the course of a few years and had just no idea how to handle it.
I've seen a large non-tech company (you probably know them) increase dev time by like 50% (plus increase defect rates) across several projects because someone inside had built an identity as "the [niche database] guy" and successfully sold [niche database] to the org (with the help of [niche database]'s marketing material) as the solution for all problems, when it was actually a pretty terrible fit for almost everything they were doing.
This dude cost them millions, for no benefit whatsoever, by causing morale-crushing slowdowns on every project. It was crazy. Wouldn't be surprised if he's running the tech-side of that whole place by now, either. They seemed to love the guy.
The more people you have, the longer things take. Everyone has an opinion and you need to spend time to get people to agree on things. This compounds with XFN teams and people coming up with make work or competing for top spot for the sake of performance reviews.
Probably better to have a small team quickly ship a v1 and get everyone involved after.
It's a classic problem with big companies and software development. Say you worked for a Fortune500 company and they wanted you to build a TODO list app. The core app can be built in a week, but it ends up taking 3 months and a team of 10 engineers, why is that?
* Well we need to integrate it with our engagement platform, meetings required with engagement to determine scope and requirements.
* Well we need it to also integrate with our productivity API, another set of meeeting to determine scope of integration.
* We need deep reporting capabilities, please get with the reporting team to determine requirements.
* Also this app will need to integrate into EXISTING_TOOL_A and EXISTING_TOOL_B. App cannot be built in React and must be built in Angular with OLD_SOFTWARE_PKG_1 and OLD_SOFTWARE_PKG_2 in order for it to successfully integrate with these old apps.
* Hey we just signed a contract with CLOUD_PROVIDER_Y, we know you were using IN_HOUSE_PROVIDER_1 for your infra but now please modify the entire app to work with CLOUD_PROVIDER_Y.
* Oh and it also needs to be backwards compatible with IN_HOUSE_PROVIDER_1 because it needs to run in parallel while we onboard CLOUD_PROVIDER_Y
The requirements will expand too. The startup is probably not worried about ADA compliance, deep Unicode compatibility, localization (the reason why we need to be good at Unicode), complying with the backup policy, security team review, auditing requirements, immediate compliance with privacy laws in other jurisdictions (e.g., a US startup might ignore EU law right away but the Fortune500 might not want to), especially with regard to personally identifiable information, etc.
You list a lot of perfectly valid "external" things that a Fortune500 company might add, but there's also internal things that it may need immediately that a startup won't.
(The backup policy being a particularly trenchant one, in my opinion. It's not an every day thing, but we've certainly seen several stories over the years on HN of startups basically going "whoops, we accidentally the data, sorry we're shut down now because this is unrecoverable for us".)
Reminds me of when I worked at Altavista (the "original Google") for all of two months in late 1999. They had rolled up many companies and I was assigned to work in one of the recent acquisitions, and the manager and I met twice in that time. They asked me to get some insight into how the search operation worked. I played a lot of pool. Found out they hadn't successfully indexed the web for a while. Altavista was trying to be everything to everyone and was spending a ton on celebrity advertising (Pamela Anderson for example). I left.
I feel the same way about interviewing with OpenDoor. The hiring manager was so condescending and when I didn’t get an offer I was bummed, but their stock is down like 90% since then so… yeah. “Sorry about your RSUs bro”.
I don't agree. People were aware of all of the same problems in early 2021. Is it a surprise that the momentum behind the ecosystem eventually fled once people couldn't sell to the next bagholder as easily? No. Is it a surprise that it happened in 2022? Yes. Nothing about the industry fundamentally changed between 2020/2021 (massive explosion of interest) and 2022 (collapse). In Dec 2021 there wasn't a particularly good reason to predict that the industry would collapse in 2022 instead of any other year.
This is silly hyperbole. I was paying honest attention to crypto and I was continually surprised that it didn’t crash. Eventually I gave up and stopped guessing it was going to crash. Then it did :shrug:
Bitcoin has dropped about the same amount as Netflix, Meta and Tesla (~70-74%)
It has significantly outperformed VC darlings like Peloton (-93%) and WeWork (-90%).
You can't tell me that WeWork stock wasn't working on the greater fool theory any more than Bitcoin's price works on finding more bagholders. It's all a grift, some worse than others.
Peloton in particular was a beneficiary of the pandemic and lockdowns. With no ill will, I'm content to see their stock price drop if it is correlated with an improvement in the general state of the world.
It's absolutely not informative to compare their returns to various crypto.
Obviously hindsight, but the combination of 0% interest rates and the rise of retail investing post-March 2020 was fuel that had to run out eventually.
Predicting tops/bottoms is a fools errand, however. If you thought Bitcoin was overpriced at $15,000 and see it rise to almost $70,000, only to see if fall, but not past the point where you initially thought it was overpriced -- well, hopefully you at least didn't bet on it being overpriced at $15k.
I remember thinking how crazy Tesla's price seemed to me in June/July 2020. It then proceeded to go up more than 4x that price over the next 1.5 years before falling, but TSLA is still trading ~30% higher than those June/July 2020 prices.
Absolutely everyone was surprised by the pace of the tech meltdown. It's not everyday that "blue chip" companies like Netflix and Meta and Tesla drop 60-70% within months.
Meta crashed 73%. Tesla crashed 70%. Netflix crashed 72%.
Everyone knew it was always going to come down, but if I were to tell you in September 2021 that Meta was going to trade 70% down within a year, you wouldn't have believed me
> if I were to tell you in September 2021 that Meta was going to trade 70% down within a year, you wouldn't have believed me
I would have probably asked "who is Meta?" at which point you explain you are a time traveler, and Facebook was to change their name in the next few months, too. After my initial laughter, I suppose I'd believe your whole story, because you can't make this stuff up. Next thing you'll tell me, Zuckerberg has legally changed his name to "The Cooler Mark".
You know, I really like this comment because its pretty true. I think a lot of people will say they say the signs... and I initially wanted to say that too. It happened so "slow" though and its crazy to think about how "good" it was pre-covid. I mean, things generally were going up and IMO, life felt more "stable" so a tech crash 2-3 years out just wouldn't be on the radar.
I have always said (w/comments to back it up) the $600 checks were going to cause huge issues sooner than later. I don't think its that prophetic or controversial (its basic econ) but at the time it seemed if you even suggested the idea that printing so much money was a bad idea you were seen as "hating poor people" or some other flavor of "against the common man."
Still. I can't say I would have believed you. Otherwise, I would have shorted the whole tech sector.
If you were caught off-guard then you've been sitting in a massive bubble. There has been open distrust and hatred of cryptocurrencies since long before NFTs were a thing.
I would argue that NFTs did more to spread the word that cryptocurrencies are a farce than they did to create "value" for those behind them.
it's not a question of you getting caught off-guard but a massive exchange being trapped now (what do they do?) I kinda feel for them because they tried to build a legit-looking exchange business unlike the famous scams, but now they are stuck and these losses are mind-bending
I feel the same about HOOD. I own some of their stock but every time I see them announce a new crypto product, investment, team, feature etc I cringe. They have coupled themselves and the success of their non crypto products tightly to the success of crypto and I wonder if there will come a time when they try to cut out crypto or if it's too late to do so. I'm holding because I'm hoping they can swing it, but it's been tough to watch because I'm a crypto bear and always have been. I love what they've done with their equity marketplace and their new retirement product seems interesting - but so long as crypto is still around stinking up the place it's hard for me to be a consumer of theirs.
The Indian version of Robinhood - Zerodha - reported a profit of nearly $250M on revenues of $650M last year. It never raised venture funding and never sold any crypto.
I've seen hatred of crypto, constant insistence that it's 100% fraud, and claims that it's worthless and will collapse for many years now.
In 2019, no one was saying it would crash in 2022; they were saying it would crash in 2019 or just "it will crash eventually"
In 2020, they weren't saying it would crash in 2022, they were saying it would crash in 2020 or just "it will crash eventually"
In 2021, they weren't saying it would crash in 2022, they were saying it would crash in 2021 or just "it will crash eventually"
In 2022, they said it would crash in 2022 or just "it will crash eventually", and people who didn't realize it would actually happen in 2022 were in a bubble?
It turned out that 2022 was different, but the predictions weren't any different, which means they weren't actually meaningful predictions.
If it can prevent any buy-and-hold/long-term retail investors from putting their money into something vastly overvalued, I'd argue that "it will eventually crash" is an extremely meaningful prediction even without a precise time frame.
You are intentionally mixing up 2 types of prediction and belittling the one that's a more powerful driver than "it will crash on X date".
"it will crash eventually" is more important, it results in people staying away/getting out of this market, for good. It's much more powerful than oh it's gonna crash on this or that date.
> > I think everyone was completely caught off-guard by the ferocity and pace of the crypto drawdown.
> If you were caught off-guard then you've been sitting in a massive bubble.
OP is saying people were caught off-guard by the specifics of the crash. That doesn't require being in a bubble, because there weren't any specific correct predictions that were distinguishable from the specific incorrect predictions.
Non-specific predictions may be useful, but they don't prevent you from being surprised by the specifics.
They are very useful when the prediction resulted in not participating in this market at all.
For those who are in this market (as Coinbase is), they are useful in terms of planning and setting up a large reserve of rainy day funds - for less risky venture it may not be necessary, but for crypto it absolutely is. Unless plan B is to crash and burn which seems to be the MO for most crypto companies.
I mean, if it was easy to time when things would collapse, you could make a lot of money. But it is sometimes possible to point to something and say "that'll collapse, sooner or later, because it doesn't make any sense" where it isn't practical to predict the time of the collapse.
People started saying "yeah, there's a problem here" about the Irish property market in 2003 or so. Lots of people were saying "this will crash any day now". For years. Then between 2006 and 2010, prices halved, for broadly the reasons the doomsayers were saying (the global financial crisis was arguably a trigger, but doesn't explain the whole thing).
(Also, I would note that Bitcoin did crash in 2021, as well. And it's not like 2022 is likely to be the last crash, either).
People were calling crypto a scam. Which is not a prediction, just an observation. Trying to market time an irrational bubble like crypto is a fool's errand.
Timing the drawdown was difficult, but the whole thing was incredibly bubbly. If there's no fundamentals, only a desire to eventually sell out to a greater fool, the drop can be hard.
Plus there's also the "Lehman Brothers moment" provided by FTX. People are learning what "counterparty risk" is. If you're not daytrading, then suddenly it's worth considering moving your crypto off the exchange and assuming the custody risk yourself.
And it all makes a certain kind of sense, in a twisted way, when you realize that they owe it to the investors that they spend what they raised. Investors don't give money to pave a seemingly infinite runway, they give money because they want to see that money put to work. An army of employees enthusiastically throwing unrelated stuff at random walls would be one of the least bad possible outcomes, because an army of focused inefficiency is so much worse, so much more likely and so much harder to recover from. Occasionally someone seems to notice and try correcing course, by burning off excess funding through the emergency vent of a ridiculously lavish ad campaign. Remember that time when almost everyone made fun of those Peloton ad interiors?
Is there something in market-making technology (or otherwise) that sets them apart from any other modern exchange? Could they pivot into trading pork bellies (or tokens thereof)?
exchanges have been around for almost a century now, so coinbase actually has a huge disadvantage in that they have no institutional stickiness or users, exchanges are built on trust and I would not want my money being routed through them if I was a client.
old exchanges do have their own challenges [0]. I don't know if their dealing in crypto gave them any particular insights into how the broader set of technologies could enhance market-making. there is at least one major busted stock exchange blockchain project that suggests this is not trivial [1].
just scrapping the bottom of the barrel here :-), hoping that as this crypto-decade draws to a close, it was not a complete waste of time for all these people and a major distraction from more meaningful pursuits in digital technology. even if one does not participate, these pervasive hypes, whether crypto, AI don't leave anybody unaffected...
Just curious, which kind of exchanges do you mean that are 100 years young? The first stock exchange came to be >400 years ago and I guess there are currency or other exchanges that were there before.
(Sorry if I just seem to want to point out a mistake - your first sentence just sounds so specific that it just got me interested in what you mean.)
There is a wide variety in ages of prominent exchanges. NYSE is one of the older ones at around 250 years, LSE is not as old but roughly 220. Some Asian exchanges are younger, Hong Kong and the Indian ones are 100-150 years old. Chinese exchanges are younger still, so is the Japanese and NASDAQ was founded in the 1970s. I am also curious as to which specific one they meant, perhaps they meant the set that were all setup around 1890s as a hundred years old.
Of course, being electronic is a later thing, as far as I know the NASDAQ was one of the first.
should've qualified with modern exchanges, centralized companies that facilitate markets and liquidity. Older generations were more open marketplaces and in some cases literally just physical areas.
Yes- what Coinbase doesn't have is trust. They can pay all the marketing dollars they want but without any regulation or oversight they'll never have it from me.
Problem is that you'll have to support and maintain a brittle, over-engineered mess and then find creative ways to further over-engineer otherwise-simple solutions to create busywork for yourself and others.
Spend is loss. If they lost $1 for every $1 of revenue, they’d be breaking even. But they aren’t. They‘d have to double their revenue just to break even.
There was a lot of hype and an expectation (IMO wishful thinking) that NFTs would have a very broad penetration in the society, for example replace physical collectibles. If that did turn out to be true, most people would require a lot of handholding for taxes, complex global regulation, etc. which the Coinbase would provide, as well as collecting the exchange fees.
Under this premise it is reasonable to hire up to build this framework if the investors are willing to foot the bill during the discovery phase. I am not saying this is prudent, just that it is a consistent story that they sold.
This is not unique to crypto: biotech startups are raising billions a pop in a Series B (not a joke) promising to use generative AI to find miracle drugs.
But that is crazy. It is not that hard to understand the collectibles business is emotion based. You tickle the soul of the customers just the right way so they want to own a hoard of your crap. Then you create an artificial scarcity to profit from, and a thin veneer of "but-it-is-not-a-waste-of-money-because-i-can-sell-it-later" feeling to make your customers not instantly regret the transaction.
I understand that an NFT might do some of it, but to replace all the physical collectibles? Are rich businessman going to parade around wearing NFTs on their wrists? Crazy. :D
I am not arguing with this, just pointing a narrative I heard many times from otherwise sane people. While I had to work hard not to roll my eyes, the story must have enough converts to pull in some serious money.
Oh sure! I believe you 100%. I should have been clearer: I'm disagreeing with people you are describing, not with your description of people of such belief.
>Coinbase is a weird company, because it's got such an obvious comparable: CME Group. CME Group has about 3500 employees, [...] Firstly, I don't see how Coinbase needs as many people as CME.
Coinbase isn't a direct comparable to CME because CME only does the exchange function.
Coinbase combines several different types of financial institutions in the crypto space:
+ exchange : order matching engine of buy & sell -- analogous to NYSE/NASDAQ/CME
+ broker : custodian of customers' margin accounts -- like Schwab, Vanguard, Fidelity, etc
+ bank : digital wallet and loans with customers' crypto as collateral -- like JP Morgan, Bank of America
+ ecommerce payments : analogous to PayPal/VISA/MC
Even though CME deals with trading corn commodities, it is not a bank for people to use corn as collateral. Therefore a corn farmer can't go to the CME and get a loan and pay it back when he sells his crop harvest.
Regardless of all the various financial areas they're in, Coinbase got overstaffed (like many other tech companies overhired) and so they're making aggressive cuts.
On the other hand, the regulatory requirements on CME are FAR greater and the requirements on their exchange technology are drastically greater as well.
CME also has to build risk and margining technology since its customers are generally managing complex derivatives portfolios and CME has to understand what risk those portfolios have under all sorts of tail market events.
CME isn't just "corn commodities"; they're CME, CBOT, NYMEX and COMEX, and they're a clearinghouse, they operate an electronic trading system, they're a colo provider, and a minter of new derivative products like S&P futures and SOFR. I'm sure I'm missing a bunch of other things. They probably have much more code than Coinbase. It's not all code you'd want to work on, but, from passing experience, there is a lot of it.
Yes, I understand that and I wasn't dismissing CME as a simple platform. I used to work across the street from the CME and saw the traders walking around in their yellow jackets every day. The "corn" was only one example to tie it to a bank services scenario.
>, and a minter of new derivative products like S&P futures
It's not that it's dismissive (though the corn thing was a bit much) so much as that it's probably wrong. CME is mostly a tech company, and they do a lot of stuff.
>(though the corn thing was a bit much) so much as that it's probably wrong.
I was trying to convey that a farmer can't get a loan from the CME to finance his seeds/fertilizer/etc and use his corn crops as collateral. What is factually incorrect about that?
Coinbase and CME have obvious overlaps, but they also have massive financial functions where they don't. That's what the corn bank loan example was trying to highlight.
EDIT to reply: >The assertion is that Coinbase has more work to do and thus more need for headcount than CME. I dispute that.
Sorry for the misunderstanding! I never intended to convince people that Coinbase needs more employees than CME. I should have put a disclaimer in my original comment such as "Coinbase may only need 1/10th the number of CME employees but as fyi, Coinbase is not a direct comparable to CME..."
The "colo provider" role is just rent collection from HFT customers. It's 100% derived from their exchange business.
It's an interesting idea, but don't think you can segregate their exchange role from their authorship or standardization of financial instruments. Any exchange is either creating products to trade or licensing them. Any commodity exchange is naturally interested in setting contract standards related to delivery and quality.
They are an exchange, through and through. Everything else is a side project in support of that one role.
> >Coinbase is a weird company, because it's got such an obvious comparable: CME Group. CME Group has about 3500 employees, [...] Firstly, I don't see how Coinbase needs as many people as CME.
> Coinbase isn't a direct comparable to CME because CME only does the exchange function.
> Coinbase combines several different types of financial institutions in the crypto space:
> + exchange : order matching engine of buy & sell -- analogous to NYSE/NASDAQ/CME
> + broker : custodian of customers' margin accounts -- like Schwab, Vanguard, Fidelity, etc
> + bank : digital wallet and loans with customers' crypto as collateral -- like JP Morgan, Bank of America
> + ecommerce payments : analogous to PayPal/VISA/MC
> Even though CME deals with trading corn commodities, it is not a bank for people to use corn as collateral. Therefore a corn farmer can't go to the CME and get a loan and pay it back when he sells his crop harvest.
> Regardless of all the various financial areas they're in, Coinbase got overstaffed (like many other tech companies overhired) and so they're making aggressive cuts.
So maybe Coinbase should only keep profitable parts and cut/restructure/sell parts that aren't, instead of burning all their revenue in hope of capturing the market?
Do you mean CME as the Chicago Mercantile Exchange? That's an exchange that deals with 10s of thousands of securities and derivatives, coinbase only deals with a handful of coins. On the other hand coinbase is also broker, which operates not just in the US but in dozens of countries, with KYC on every customer, lots of different regulators, etc. Not that much comparable I would think.
The AML stuff is expensive even for the investment industry which unlike crypto, isn't perfectly catered to hackers, scammers and money launderers. I'm guessing AML and support is big a cost area for COIN. This is just speculation as i don't have time to read their public papers.
Take a look at the Coinbase Subreddit to see how many suckers are getting hacked, scammed, locked out for AML reasons on any given day and getting their lawyers to write legal threats to Coinbase. Responding to this all costs money and it's where the Binance model of avoiding AML responsibilities and hiring outside US is superior (until it isn't, when execs end up in a US prison).
Support/compliance officers do not need to be American even for American banks as far as I can tel. Based on a cursory glance at some identity verification companies I don’t think they’re paying more than $1 per selfie and document verification. Chainalysis is probably where things get expensive (probably high 7 figures a year) + I think the government just recently forced them to buy some new compliance tools as part of a settlement. But yes, the Binance model and allowing countries seen as risky does allow them to get substantially more volume.
Two issues here with the comparison. First Coinbase isn't just an exchange in the sense that the CME is an exchange. Coinbase is an exchange, a clearinghouse, a custodian, a broker dealer, a prime brokerage, and a user platform. When you want to trade on CME, you don't just go to CME dot com, open an account with them, and have them hold your money. There's layers of other service providers, with CME itself basically being a B2B platform that also offloads much of the banking and custody to other institutions.
Second, Coinbase has ambitions beyond just being an exchange and that's driven a lot of hires. It runs Coinbase Ventures, Coinbase Cloud, an NFT platform, develops tooling (e.g. Coinbase Wallet), and contributes to crypto protocols. A lot of the recent hiring was driven by these "other bets".
I've noticed Fidelity removes default graphs from dashboards or changes the time period during major market corrections. Articles urging people not to panic sell also start appearing. Here's what they emailed customers on March 5, 2020:
Historically, the economy and the stock market have bounced back and market gains made during economic expansions have far outpaced losses that occurred during recessions.
I try to keep my calm but it’s a stretch on these topics.
There is nothing ethically superior about any financial manipulation. @sama just raised a multi-billion round on OpenAI. “Open” “AI”. Loopt sold to Greenpoint with thumbs on the scales from both pg and Conway, which is why he’s in a position to do that.
Parsing the details about how wealthy people with the right parents extract wealth is an exercise in parsing minutia.
The chosen get richer. The militant guardians of freedom fight for Drepper’s ideology (he works for Goldman Sachs).
And I’m pretty comfortable with all this: it’s the same as it always was.
Most crypto is a fucking scam. But it’s the same amount of cynical and worse connected than YC.
I used to work at Coinbase. The thing is no one is actually using it for transactions of any type. The vast majority of users buy a token and let it sit until they can make a profit. The volume of transactions to other accounts was in the single percentage points.
One thing I don’t like about the protocol is that LN nodes must stay online or risk having the other parties of their channels steal their funds. I know there are watchtower services to help guard against this but needing to trust a 3rd party to make sure you don’t lose your money goes against trustlessness, a core principle of cryptocurrencies. This is the reason I abandoned the idea of running my own LN node. I didn’t want to risk losing money in the case of an extended outage of my node.
1. All payments have to be routed across channels of arbitrary size across an arbitrary network. It's a small travelling salesman problem that only gets worse as the network increases in size.
2. It requires a transaction to L1 to open/close a channel. If 1B+ people used it the Bitcoin network itself couldn't cope with that. At 7tps it can handle a max of 220M transactions per year.
3. You need enough liquidity in all channels to your destination to send a payment. This is fine for micro transactions but it can't handle $1k+ transactions well at all.
4. You have to re-balance channels or they stop working.
5. You need some sort of watchtower / guardian node to prevent the other person from being able to steal your funds.
ZK-Rollups completely obsolete the lightning network. If Bitcoin did a hard fork to make them possible every single person would migrate to them. Lightning is not a long term solution, it's mostly a meme to throw back at people who say Bitcoin doesn't scale.
It doesn't actually let you settle payments quicker. What it does is set up a "channel" between two participants which can quickly adjust its balance at any time (but only up to the value originally locked in it!), and then ultimately settle out if you want to close the channel.
You can't use it to make a payment to an unrelated person without opening a channel. So there's a "routing layer" where you find a channel in common, like trying to send a UUCP email. e.g. if you wanted to send to another coinbase user, you'd send over your channel to coinbase and they'd send it out again over their channel.
But then .. you could just both use a coinbase payment account?
Coinbase is technologically kind of a joke. Their matching engine is crap. They haven't even adopted bech32. They just do the bare minimum to keep things working for 99% of users, and for the unlucky 1% they follow the same customer support strategy as Google (aka automated emails but no actual humans). Unfortunately Coinbase is YC and they do a lot of marketing, so people who are just getting started tend to think they're a frontrunner.
Well that chart is plainly wrong or outdated. This is a random coinbase transaction from 2021 and it pays out to all kinds of addresses including P2WPKH/P2WSH.
Counterpoint. After cobbling together a bunch of Coinbase products, we successfully use Coinbase to receive and send payments for our online marketplace in much the same way you would use a PayPal type service. The user experience is great and technologically there is no match. We literally could not do what we do with any other service. If Coinbase focused on payments they could dethrone the kings of the international payment space in no time.
Your point is still valid. They have all this technology "sitting around" and they seem to be avoiding focus on the obvious growth areas in favor of trading. See below yao420's point.
LN can be used privately if you send to your own wallet, and Coinbase likes to track what people do after their coins leave Coinbase. Brian said they can't list privacy friendly coins like XMR due to regulations.
LN is also unreliable to this day and i frequently get routing issues about 15% of the time using the most popular custodial LN wallets and sending to popular LN payment gateways. I'm guessing it would be even worse if i was transacting with small shops or self-hosted LN users. This would be a massive customer support burden.
There's been a lot of longstanding potential extra vectors for abuse in the LN protocol and it is not ready for operation at the specific junction where it is most vulnerable to abuses, which is financial exchanges. Exchanges might choose to opt for reasonable security, which is a confirmed on-blockchain transaction.
LN is definitely good for something where there's an in-person exchange of goods so at least potential abuse would leave someone at a physical location with surveillance footage, or where there is a subscription service that can be turned off if the payment turns out to be fraudulent. LN has a higher likelihood of assurance of funds delivery in a timely manner than a credit card -- but that there are entities developed that will insure traditional credit transactions.
I think any company exploring ways to improve the financial system should be given plenty of space to do so, but I think the fundamental issue facing Coinbase, and all other crypto-based firms is: when will we see mainstream adoption of crypto as something other than asset speculation?
Or, is speculation the only use-case for crypto? Sure we've had example use-cases for crypto as a value store and exchange medium, but outside the bleeding-edge of technology, and away from the VC fever dream (let alone con-artist central), where does crypto fit into society?
There are major incumbent forces all the way up to government that are keen to control the rise of this technology so it's clearly not an easy task, but for the likes of Coinbase to survive I think we need to see real value in using the things you actually trade on their exchange. Unfortunately right now it seems that Coinbase is a company predicated on the assumption that “crypto is going to become the main way to exchange value at some point in the future”.
Companies powered by hype and VC speculation invariably collapse as markets move on, so if I were investing in them I'd be really keen to have them allocate the majority of their resources at pushing crypto adoption into non-investment-based use-cases, which is to say, banks having large crypto teams is much less important than average people actively using crypto for goods and services (if that's to be the dominant use-case for crypto.)
With most technologies, I find the heuristic of "how will this technology help improve your average suburban consumer's life, or those serving them" helpful. Internet? Great. Smartphones? Yep. Electric Vehicles? Kind of.
Crypto has never had a real answer to that question. The opportunities of crypto are things like you owning your money instead of the bank, fast transaction speeds and anonymity - nobody but a tiny percentage of people give a crap about any of this. Certainly not enough to supplant the most prevalent piece of infrastructure in modern society, the fiat.
As far as I can see, the business model of cryptocurrency exchanges revolves around the speculation use-case, since they profit from matching buyers and sellers of cryptocurrencies. If cryptocurrencies worked as advertised (i.e. as a peer-to-peer payments system), I don't think there would be much use for exchanges.
Hopefully this pivot allows them to realize promoting altcoins like Doge will not take them very far, and go deeper on the Lightning Network integration to enable their customers to move funds and use apps made on L2/Nostr
I agree with this analysis. So much of what I see in crypto is demand generation which just makes “churn” worse when folks realize they’ve invested in the wrong assets due to misleading communication.
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[ 2.0 ms ] story [ 348 ms ] threadOperating costs reduced by 25%, but it's actually roughly a 20% reduction in workforce (950 employees out of ~4700)
Like a team of 5 software engineers, and a customer support team of 10, and 1 boss ought to cover it...
Can't wait for the next round of crypto hype, excited to see mew use cases along with new scams.
https://www.businessofapps.com/data/coinbase-statistics/
They don't need datacenters, quill pens and paper accounting could handle that 200 years ago with about 3 hours work per day.
Generally supermarket cashiers can do somewhat less than 30 transactions per hour, so I think its justified they should be able to do all the accounting manually in three hours.
The numbers do look a bit odd.
The other problem is its a form of sophistry to react to "the absolute numbers are awful" with a prayer to the efficient market hypothesis like "why hasn't a more successful competitor arisen". That deflects from the original question in a sophistry manner, not answers it. Sure, I'm a believer too, but can't answer a technical question with a prayer. The original question stands unanswered, why are the absolute numbers so utterly awful?
Note I'm a happy customer, it would be nice for them not to go out of business, but with those numbers...
But now I see #1 story on Coindesk "Shiba Inu-Themed BONK Tokens Are Yielding Nearly 1,000%"
So I guess we are not there yet
They're all hoarding wealth and offloading risk on others, it's just that in comparison, the crypto-rich are not (yet?) a social class with an army of lobbyists on its payroll.
Fortunately, we do not have to rely on our beliefs here, we have an objective measure, which we call "money".
If someone starts a company in their garage, and a decade later that company is worth few billions of dollars then that's the value this person brought to society - because people willingly paid them those billions of dollars for their product/service.
Of course the whole logic breaks down with purely speculative financial assets such as crypto.
What? You don't think the two measures would converge? In either case, the one with more market power would use that to improve their side of the bargain? Who'd've thunk...
What was the value FTX or Theranos brought to society?
"Provides value" is loosely connected to "expected future value", but it's certainly not the same thing.
But back to your point: it is possible to simulate either or both of those things and have eager investors get in early, but that's why they (probably) get in for less money than if the company had done what it claimed. They took a risk, and taking a risk is one of the valuable contributions one can make to a company.
Most high net worth individuals keep their wealth in stocks and shares. This is not what hoarding means.
The comparison to crypto scams is absurd.
Inheritance makes providing value worth doing past the point of one's own comfort. Many people's work becomes most valuable in their latter years, and so we would want them to keep working and pass on wealth, as opposed to either stopping working or just splashing their money out on nonsense.
The principle of being able to own things and work to one's own good, and the good of those whom one choosing to transfer it to, is the fundamental basis on which we now exist in the most advanced societies the world has ever seen, and the most rapidly advancing societies. It's not perfect, but every authoritarian attempt to make things better by centralising power in the name of fairness has gone terribly.
Pump and dump schemes are just nothing like that.
The legitimacy of the social contract that respects private ownership depends on the prospect of a good life for those who work for it.
When people lose belief in that prospect, they have no reason to respect the rules of that social contract.
I agree that as individual liberty is eroded, and it's easier to just become yet another BS cog in a giant BS machine, with no incentives to make anything better, then you can descend into something authoritarian that promises a better way, such as our previous attempts at socialism, but the way out isn't to reinforce (or repeat) incorrect assumptions about money. It's to campaign for more liberty and fairness.
The reason bitcoin will never be the main currency is, that even in case case crypto will ever be technically/UX viable as a currency (is very, very, very far from it) nobody of the 99% that do not own bitcoin now will choose bitcoin as the main currency. They will choose some most likely government started crypto where they can exchange their current money 1:1 and not buy into some stupid old thing that gives them nothing.
So if crypto ever succeeds it is the death of bitcoin as the new system that converts from the old will win by a million miles
Clearly, I didn't think the middlemen provided 20% of value, but I was willing to cough up the cash to perform the overall transaction. If a cheaper money transfer option existed I'd never have used the middlemen, whom provided nothing of value to me for their 20% charge. Cheaper options do exist now...
There's a lot of hand waving, but if you trust paypal, which you probably should not, the cost of moving money internationally has dropped to about 5% and the cost of currency conversions has dropped to 4%. I would assume they double dip and converting USD in USA to swiss whatevers in Switzerland would cost about 9%. Then of course there are withdrawal fees and so forth stacked on top.
Anyway, lets say you can turn and burn bitcoin in "somewhat less than an hour" so simply divide total international daily transaction volume by twenty five or so and that seems a reasonable starting point for a store of value. If the price gets too high making it cost more to use BTC than paypal, then the BTC transaction volume would seem to drop until prices drop and people start using BTC again.
Obviously for various UI and enduser reasons I would not expect all international trade to flow over either BTC or paypal or the legacy banking system, but "enough" should be there to support the BTC price at some level.
I ordered equipment for a company from a European seller , and because I wasn't a VC backed technology startup, instead focused on physical goods- there was no army of people to help me set up an international bank for my company. So what I did was drop them some bitcoin. Just getting the wire approvals would've taken longer.
There's a lot of trash in the crypto world but also some valid projects.
There is no end date to government currency debasement.
While other assets are bound to provide long-term returns greater than inflation (for example, stocks and bonds [1]), cryptocurrency can not surpass inflation long-term, but it still does so while demand is growing. In addition, even after it reaches a stable demand (which I reckon will be in 5-10 years, with market saturation), it will be a means of diversification (like gold is currently).
[1] - https://totalrealreturns.com/
It is silly to lump all crypto coins in a single bucket. BTC is very different than DOGE or SHIB. I guess your parent post was about BTC supply being limited.
But if we're looking at art, and you show me the original Starry night, a print, and then a picture of the kool-aid man busting through a wall, and ask me which 2 are most similar, I'm going to pick the starry nights
You actually said that - "Interesting you say that, because it's actually very similar to Doge". Especially when the context was about the value of crypto in relation to supply and demand. Given that you are familiar with SHIB being an ERC20, I am fairly certain you are aware of DOGE's supply being nothing like BTC. And yet you conflate the two. Just for FUD?
There are too many tokens with Elon Musk and Shiba Inu, and they are all interchangeable.
There it is. Rings incredibly hollow when the same line was trotted out just a few months ago with zero impact or meaning behind the statement, given it clearly didn't change anything.
Also, Coinbase sells unregistered securities.
"As the accountability rests with me, I will be taking a 25% cut on my $60 million bonus this year"
I doubt he’s getting anything close to that in 2023.
More than likely, any career CEO who would be brought in to replace him would likely continue staffing cuts, not reverse them.
(Other than the layoffs which are happening across the board at nearly all big tech)
What's the problem with that?
For most places though it means they were throwing whoever they could find at the interviews.
It's customary for a lot of companies to have an interviewer which is above or _at_ the level that you are recruiting. Therefore someone with a year or two of experience is perfectly able to hire an intern or someone that will be hired at the same level as them.
Looking at Amazon for example, "Hire and Develop the Best" is one of the leadership principles, and you CANNOT be promoted if you don't conduct interviews.
Not, “just graduated web dev boot camp and have a fleeting interest in web3” junior.
Note also that I would draw a distinction between 1-2 years of total experience and, say, someone transitioning from academia to industry. Someone who was, say, a successful grad student likely also accumulated a fair amount of other life experience that a 22 year old is unlikely to have.
Last I was interviewed by a junior, I brought up a concept for which he had never heard of. Even after explaining it in great detail, he argued with me for half the interview trying to explain why such a system would never hold in practice. Needless to say, I did not get the position. Total waste of my time.
I interviewed at a place where 75% of the interviewers didn't show up.
The only dude who did, had started the day before...
I am a former employee of BladeLogic, and the founder of Puppet used to work there. In 2008, BladeLogic's largest customer hired me (Bank of America.)
BofA outsourced my job, so I needed somewhere to work, and I reached out to Puppet.
I had an interview schedule with four Puppet employees. 75% of them didn't show up. The one person who DID show up had started the day before my interview.
You can find me on LinkedIn, all the history is there.
My two prior startups were (essentially) in telecom and healthcare. Coming from these well established, highly regulated, somewhat legacy industries to "crypto"/NFTs/web3 was a very interesting experience, to say the least. Users/potential customers for our solution ranged from creators to marketplaces to collectors/investors. Several very general and broad observations:
1) The anonymous/pseudo anonymous nature of the space is bizarre. I would have multiple voice-only meetings with people using aliases and avatars for all communications. To this day I only know some people as "Mango Man" or whatever. Meeting people who could just burn down an entire identity and start fresh when things go sideways is an indicator of the nature of the space.
2) There is a general lack of "adults in the room". I would get on a call with the Founder/CEO of a marketplace or project that was valued (at least) in the > $100m range and hear and see things that were horrifying. My final breaking point was a call with the founder of a well known highly valued NFT marketplace who showed up (Tuesday morning, 10 AM) obviously high on some sort of stimulant. Within the first five minutes of the call they repeated their mantra of "I'm just trying to get made, paid, and laid" several times. They spent the remainder of the (very brief) call describing all kinds of things I'm pretty sure are illegal. On an introductory call.
3) The fraud and overall criminality is well beyond what is publicly known from FTX, Celsius, web3 is going great, etc. The most common reply regarding our solution was along the lines of "Why would we want this? We make our money on fraud". I was frequently reminded me of the scene in The Big Short when they talk to mortgage brokers and come away saying "Why are they confessing?" with the response being "They're not confessing, they're bragging".
4) Any semblance of professionalism and basic standards is generally non-existent. A HEAD OF LEGAL for a well known exchange (Superbowl commercial) would say and post things on LinkedIn that would get you terminated immediately in any other field. Daily.
5) The more technical startups/partners (infrastructure providers, etc) were generally the best to work with. However, the profiles of the founders and team were interesting - many of them had 1-2 years of junior experience at a FAANG (for better or worse).
6) VC in the space is even more wild than what has been reported in the media. I'll just leave this one at that.
7) Many people in the space seemed to just appear from nowhere. Like some of the technical founders with 1-2 years of junior experience and SBF who had a few years doing something at Jane Street I often times couldn't figure out where these people came from or why/how they were here. Of course this is common in tech (from Google to Facebook founders often "appear out of nowhere") but it was still extremely bizarre for SBF type characters to be dealing with hundreds of millions or billions of dollars of other people's money with either no reputation/background or a shady one.
8) In my 25 years of experience I've never dealt with a more generally unimpressive group of people. After nearly two years in the space, meeting hundreds of people, there are only a handful I want to maintain any sort of personal or professional relationship with.
With my background I knew I would experience some culture shock (for lack of a better term) entering a space that was still (after 14 years) the Wild West. What I experienced was (almost universally) so beyond the pale I finally ran away screaming. I spent more and more of my time and energy attempting to motivate myself and the team by focusing on our efforts to do good in the space but after all of this no amount of rationalizing could make up for the cesspool I was living ...
I can't blame them. It involves money and it's a new and risky and currently unregulated space. Things go sideways unexpectedly or the SEC changes their rules suddenly (see them possibly classifying a bunch of tokens as securities when they didn't before, with all the KYC and other regulations that requires) and you run the risk of having both users that went too deep into it (like exist for damn near everything, including Pokemon cards) trying to kill you and SEC trying to put you in jail.
I've done a little code assistance on a web3 project (mostly just helping a friend who's doing the actual coding, when they have questions) and I'm doing my best not to have my name associated with it, just in case, even though I think the project is trying to make positive changes and will be one of the 'good' ones eventually.
For the longest time I avoided any jobs involving money specifically because I didn't want to risk screwing something up and causing a lot of pain or lost money for people (reason why I avoided healthcare too). And yet now I've got professional experience working for a healthcare company and as a consultant for a major financial company, so I ended up down that path anyway.
The genesis story is early 2021 I was talking to my sister (who is a respected digital artist) and she asked me about "these NFT things". Being technical I was of course aware of them. She then followed up with "Yeah, my friends and I have tried them but all of our stuff just ends up stolen anyway". Needless to say I was intrigued.
My general thinking was - this stuff is here, people are buying into it for whatever reasons, and the more I look the more fraud and shady stuff there is. Broadly speaking I tend to have a "harm reduction" mindset - everything from safe injection sites to crypto. For some things it just seems like people can't help themselves so once the "cat is out of the bag" there's value and nobility in making inherently risky things at least somewhat safer. I know there are plenty of people here on HN and elsewhere with the mindset of "they're idiots, they deserve to lose everything" and/or a desire to just watch the entire thing burn. I (clearly) have a more measured and nuanced take.
That said, my experience ended up being less like "safe injection sites" and more like "this entire space IS the cartel and there are few (if any) people doing any good whatsoever". As I noted I can't recall anything positive or beneficial in my time dealing with it. The impact on my mental health and general feeling of spitting in the ocean finally drove me out.
Most employees at Kraken don't know what the CTO looks like. He never turns the camera on during meetings and as far as I'm aware hasn't showed up to the in person events. He wrote most of the legacy backend.
This was mostly a curiosity though. None of the other points apply to him. He was professional.
> 6) VC in the space is even more wild than what has been reported in the media. I'll just leave this one at that.
I know a guy who went to a crypto hackathon (which is a chance for devs and start ups to show off for VCs.). He said a disturbing number of VCs, mostly creepy old guys who got rich off crypto, showed up with obvious asian/eastern European prostitutes or sugar babies.
> This was mostly a curiosity though. None of the other points apply to him. He was professional.
Call me "old school" but the CTO of a company valued at > $10B that manages who-knows-how-much in terms of customer assets shouldn't be able to do this. Frankly, it's ridiculous - can you imagine the CTO of Bank of America being an avatar/unknown? Seriously. Where is an adult to say "turn your camera on, show up to stuff, use your real name, or you're out"?!?!
Regarding the "sugar babies" and what-not - yes. Just another data point that demonstrates how ridiculously shady and so far beyond acceptable behavior, practice, and standards the space is.
(They didn't offer me a position for a given reason that was also weird. Strange place.)
"Therefore, I've made the difficult decision to reduce our operating expense(1) by about 25% Q/Q, which includes letting go of about 950 people
(..)
(1) Comprising Sales and Marketing Expenses, Technology and Development + General & Administrative Expenses, including stock-based compensation and excluding restructuring expenses and Other operating expenses"
(..)
In futher news, highly recommend Ben Thompson's recent interview with Brian Armstrong.
1) enjoying the technical challenges of crypto is to me like a guilty pleasure. So do I, but I don’t tell the world about it (outside of this HN comment).
2) such a high % of the people involved in crypto are doing something shady or illegal. Personally I would bet that only a slim slim slim monitory of US crypto holders pay their taxes accurately. For any top security clearance jobs in the US, you can’t have any major outstanding debts, because they could be used as leverage against you. In the same way, hiring a cryptobro looks like an unnecessary risk to me.
3) they probably can’t do the job I need them to do. For example, any front end change to our sales funnel requires a sign off from compliance. Can I trust a cryptobro to work in an environment with stricter rules & compliance requirements? Not really.
And they're not running a ponzi casino, pump-n-dump sh*tcoin platform, or bullshit Web3 scam.
Being involved in crypto related things is a huge red flag that the person is most likely deeply immoral, greedy and opportunistic, which are traits that will most likely make the person hard to work with for the other team members.
I think throwing them out entirely might be a bit extreme, but stamping them with a big fat red-flag and moving them to the bottom of the pile seems totally reasonable to me.
This is a huge assumption to make about someone's character when all you know is that they were employed in $CRYPTO_COMPANY_X FROM $START_DATE TO $END_DATE.
You are forever tarring someone you don't even know.
If you are involved in recruitment it might be worth taking a look at those guesses you are making.
Godwin's Law: Let me put it to you this way, would you immediately dismiss or red-flag someone who previously worked at IBM?
Some companies will make a good impression, some companies will make a neutral impression, and some companies will make a bad impression.
And with the current situation, I doubt that crypto companies on your CV will be in the first category.
What do you mean you people?
Please don’t argue in bad faith.
Would you hire an FTX dev who didn't know about the things which happened behind closed curtains?
Especially when crypto paid very well
For every person who made money on crypto there was someone that lost as well.
If you are a Rust developer, you pretty much need to do blockchain stuff, as most of the Rust jobs are related to that. And so on.
I'm not a Rust developer, but I must admit I'm kinda surprised by this statement. Let me do my own research.
(I'm hoping to put a tiny dent in that by growing our non-crypto Rust team over the next couple of years. And I won't hold anyone's former means of putting bread on the table against them ;))
https://www.stephendiehl.com/posts/crypto.html
Looking for Rust jobs on LinkedIn used to yield mostly postings in crypto. That may not be the case anymore with the downturn, my guess is that there are just fewer rust jobs now that the crypto ones are gone.
I think the reason is simply that crypto companies didn't have the clout or stability of big tech and also the sector has a poor reputation amongst engineers so they pick hip languages to compensate. Like "Yes I know, working in crypto is terrible but did you think about how you could write Rust everyday instead of Java??"
I know a handful of rust developers who refuse to work on anything that touches a blockchain, and they regularly express frustration that the majority of rust jobs they see advertised are in that space.
Are you one of those CEOs that needs sycophant applicants that pretend working at your company on your product is their biggest dream?
There’s more to the job than just technical skill.
I loath crypto, but I still did it for a couple years while they paid me in USD while I traveled to Asia extensively.
And sure, you’re a “big boy company”…that sounds so satirical.
I don't believe in crypto myself - but your statement sounds a bit egotistic. Should employees work at a crypto company (such as CoinBase) only if they truly believe in crypto and not for say, a good pay? The second statement about smartness too, doesn't seem like a good thing to say.
I've worked for a number of startups that, in retrospect, had terrible business models. Does that make me a "true believer" in their viability? Maybe, but then I learned better. Or maybe I joined because I needed a paycheck and they had a good offer. Either way, my performance as a developer had nothing to do with the viability of their business model.
Even if you make the argument that "crypto is a terrible idea as a technology, so anyone who engaged with it is stupid", well, again, in a long enough career you maybe make a wrong pick every now and again, especially early on in your career when it's harder to distinguish hype from reality. A good developer would learn from this and be a more valuable employee as a result.
A very significant fraction of crypto companies are basically just running a scam. FTX was the third largest exchange and even they turned out to be fraudulent! At this point if you are involved in crypto, my assumption is that you are knowingly involving yourself in an attempt to scam people.
I have no problem with not being a "true believer" of the company you work for. I do have a problem with willingly working for criminal enterprises. It's not 2014 anymore, you can't close your eyes to the issues inherent to crypto.
It reminds me of how I see a lot of applicants to LinkedIn job posts with people who list their work history all the way back, past their time in the industry. Eg McDonald’s cashier. You may think that has a positive effect (has experience talking to customers, can be trusted to handle petty cash, held a job even at minimum wage..) but in reality the first thought I have is “did bro really put McDonald’s on a backend dev resume lmfao”
If you’re a junior developer, and you want to make good money at it, you no longer have hobbies or a life (don’t worry, you get them back when you get good). Instead, all your free time is now dedicated to hobby projects & studying. Of course, only a small % of junior developers want/are capable of that lifestyle (the 10x engineers), and if you’re not one, you’ll just have to suffer making only 80k a year + benefits as a regular junior.
You could do us all a service by telling us the name of your company so we (especially junior developers) could give it a very wide berth.
Of the tech companies I or acquaintances have worked at, I've personally 'believed in the viability' of maybe 25%. If the tech / pay is good enough I could see myself work at them for sure since its a job. not all jobs require personal investment.
I now see that the username is IRL_CHAD. I feel stupid for falling for a obvious troll
Oh well
> After checking out your page, I’m absolutely appalled. I’ve forwarded this to a personal friend who works in the immigration department here.
> Ukraine isn’t your playground to pimp women to men who aren’t successful with them in their own countries.
> Btw you’ve probably seen me around Kyiv in bars/clubs/whatever. I’m the guy always wearing designer + an iced out rolex
Idk man, I think social media has people responding to comments in weird extremes and I just wish everyone could get away from that. Would you really say to someone's face IRL that you won't hire them because they worked in a specific industry? Takes a certain character to be that way...
I don’t really go to clubs anymore, and I don’t enjoy my flashy stuff anymore either.
Otherwise I stand by those comments. They were made to a guy running a sex tourism business.
You should put that in your job listings to allow people to avoid even sending a resume to you
The comp and bennies tend to be extremely good, and the technical challenges are fascinating enough to make the work engaging.
Those who did were automatically ruled out. Edison wanted people who didn't make assumptions, since assumptions tend to be innovation killers.
... this was the man who assumed DC power was superior to Tesla's AC power and made every effort he could to stand in the way of innovations that threatened his own bottom line.
What an asshole.
Dismissing crypto/blockchain is like dismissing user-generated content that lived in the forums on the fringes of the internet or in the comment sections of blogs. They were looked down and despised by the established mentality 20 years ago. In 10 years, user-generated content became the king.
...
Just like how others said - your behavior does not say 'big boy company'.
So, so, so much of the crypto “industry” is just running scams of various sophistication. Having years of your life dedicated to that industry is signaling something!
So if I previously worked on windows apps it means I believe that Microsoft is a fantastic company and Windows is the future of computing? :)
Even the skeptics here are laughing at such an absolutely nonsensical comment like this.
I guess engineers at Square, Twitter, Stripe, Mastercard, Visa, Checkout.com, Google, Meta, etc are not doing well for sure despite still having crypto products and partnerships. /s
As always, absolutist comments like this can be safely ignored and laughed at.
Coincidence? I think not.
https://www.coindesk.com/markets/2023/01/09/jefferies-initia...
I hope, some years down the line, you take the broader life lesson that anyone promising you money for nothing does not have your best interests at heart.
On another note, one thing about Coinbase that struck me, was that on the app/website it doesn't actually show you how much money you put in / what the return on your investment is (I used a spreadsheet to track my own investment "success").
I suspect Coinbase does not do this deliberately - as many, many people who invest in Crypto lose money and it doesn't want to highlight this point too much.
Likewise, you could withdraw your bitcoin to your own wallet for free. The fee comes when you change from one type of currency to another.
I think the reason they don’t show return on investment is because Coinbase presents itself as an exchange, not an investment platform. The purpose is to facilitate the exchange of currency from one kind to another. They’re not positioning themselves as trying to help you build up retirement nest egg.
I am not positive about the future of crypto though. And I said before it's also telling that I had to use a spreadsheet to look at how much I put in, fees, money lost etc. On Coinbase. Again I suspect it's because a lot of people are losing money and the owners want that information hidden.
we just do things differnetly here
upper crust of socialm mediaz
read that again
you're not an individual to corporations, just an expendable
can only imagine the joy shareholders get out of "cutting expenses", they get richer and you peasants lose jobs
expenses are on income statements
carry on
You think executives should let a company go bust, rather than shedding staff when times aren't good?
Firstly, I don't see how Coinbase needs as many people as CME. They're meant to be a disruptive start up they should be lean. Secondly, how the hell do they get those unit economics to work? It should be a trivial job, right. People pay you to trade, so how are they losing so much money!? Well, I guess hiring 4,500 people... I think the idea at this point that Coinbase can get their cost structure down to reasonable numbers making them profitable at lower revenue levels is challenging. It's very hard to put that genie back in the bottle.
You don’t really need the money, but you got it. What are you going to do with it to appease the investors? Well you gotta act like you are doing something with it, especially something that shows growth.
Hire more. Hire more because we imagine more. Keep imagining until imagining doesn’t work anymore. Then fire, and say sorry. Hopefully you sold enough equity at the ridiculous ipo price.
Sorry, but not sorry.
We're all just see how tech startups and other companies are getting slaughtered over market conditions and NOW need to cut costs, spend less, hire less and turn a profit rather than continued losses.
The era of "Lose money for decades just like Amazon did and so can we" is over.
Well, in a sense that's exactly what low interest rates were supposed to accomplish: get people in the economy to spend.
One manager I interviewed with explained that they wanted to become the "Amazon of Crypto" where any service related to crypto such as wallets, NFT's, etc are all on Coinbase. It was clear back then to me that Coinbase wanted to dethrone both Metamask as the wallet of choice and OpenSea as the NFT marketplace of choice. You hire a ton of people for these projects but end up letting them all go when they realized those projects weren't going to pan out.
Which is weird, because they're not especially difficult projects. OpenSea was built by like five people.
I've seen teams of 10-15 people that do absolutely nothing. Have 10 meetings about specs but space them out over a year, so that by the time the next meeting happens, everyone forgets the entire context of the project... so you have to cover everything again. By the end of year, its gone absolutely no where due to 2-3 layers of bureaucracy. Coinbase _can_ hire good talent... wonder if managing it is the/a problem.
I've worked at a company where at an individual level people were quite talented, moreso than competitors who did better than them .... but getting anything done required Y different meetings with X different teams, satisfying N different gatekeepers who just want to push their own product on you, avoid stepping on the toes of persons X,Y,Z, etc etc.
Company multiplied in size a few times over the course of a few years and had just no idea how to handle it.
This dude cost them millions, for no benefit whatsoever, by causing morale-crushing slowdowns on every project. It was crazy. Wouldn't be surprised if he's running the tech-side of that whole place by now, either. They seemed to love the guy.
Probably better to have a small team quickly ship a v1 and get everyone involved after.
* Well we need to integrate it with our engagement platform, meetings required with engagement to determine scope and requirements.
* Well we need it to also integrate with our productivity API, another set of meeeting to determine scope of integration.
* We need deep reporting capabilities, please get with the reporting team to determine requirements.
* Also this app will need to integrate into EXISTING_TOOL_A and EXISTING_TOOL_B. App cannot be built in React and must be built in Angular with OLD_SOFTWARE_PKG_1 and OLD_SOFTWARE_PKG_2 in order for it to successfully integrate with these old apps.
* Hey we just signed a contract with CLOUD_PROVIDER_Y, we know you were using IN_HOUSE_PROVIDER_1 for your infra but now please modify the entire app to work with CLOUD_PROVIDER_Y.
* Oh and it also needs to be backwards compatible with IN_HOUSE_PROVIDER_1 because it needs to run in parallel while we onboard CLOUD_PROVIDER_Y
You list a lot of perfectly valid "external" things that a Fortune500 company might add, but there's also internal things that it may need immediately that a startup won't.
(The backup policy being a particularly trenchant one, in my opinion. It's not an every day thing, but we've certainly seen several stories over the years on HN of startups basically going "whoops, we accidentally the data, sorry we're shut down now because this is unrecoverable for us".)
I think CMGI rolled up the remnants of Altavista.
https://twitter.com/danluu/status/1117859464793583616
Do you have any insight into why that happened?
Volumes have atrophied completely. It's not a cooling of retail interest vis-a-vis the stock market, but complete apathy and/or hatred.
See the volume data for OpenSea as an example.
It has significantly outperformed VC darlings like Peloton (-93%) and WeWork (-90%).
You can't tell me that WeWork stock wasn't working on the greater fool theory any more than Bitcoin's price works on finding more bagholders. It's all a grift, some worse than others.
It's absolutely not informative to compare their returns to various crypto.
That doesn’t change the fact that crypto is zero/negative sum.
Predicting tops/bottoms is a fools errand, however. If you thought Bitcoin was overpriced at $15,000 and see it rise to almost $70,000, only to see if fall, but not past the point where you initially thought it was overpriced -- well, hopefully you at least didn't bet on it being overpriced at $15k.
I remember thinking how crazy Tesla's price seemed to me in June/July 2020. It then proceeded to go up more than 4x that price over the next 1.5 years before falling, but TSLA is still trading ~30% higher than those June/July 2020 prices.
Meta crashed 73%. Tesla crashed 70%. Netflix crashed 72%.
Everyone knew it was always going to come down, but if I were to tell you in September 2021 that Meta was going to trade 70% down within a year, you wouldn't have believed me
I would have probably asked "who is Meta?" at which point you explain you are a time traveler, and Facebook was to change their name in the next few months, too. After my initial laughter, I suppose I'd believe your whole story, because you can't make this stuff up. Next thing you'll tell me, Zuckerberg has legally changed his name to "The Cooler Mark".
I have always said (w/comments to back it up) the $600 checks were going to cause huge issues sooner than later. I don't think its that prophetic or controversial (its basic econ) but at the time it seemed if you even suggested the idea that printing so much money was a bad idea you were seen as "hating poor people" or some other flavor of "against the common man."
Still. I can't say I would have believed you. Otherwise, I would have shorted the whole tech sector.
Then out of the blue, for no real reason, it went up again, hitting another new high.
Point is: markets are completely irrational and predicting what they're going to do or not going to do is a futile exercise.
Maybe not down 70%, but certainly down a lot due to iOS privacy changes, which are being taken up by other platforms and browsers as well.
A big chunk of the negative sentiment however can be attributed to those ridiculous metaverse demos that they've spunked $15b of cash on.
In real terms, Bitcoin and Ethereum didn't perform any worse than most major tech stocks, and outperformed many pandemic tech stocks (Zoom, Peloton).
I would argue that NFTs did more to spread the word that cryptocurrencies are a farce than they did to create "value" for those behind them.
Bootstrapped businesses have the best execution.
In 2019, no one was saying it would crash in 2022; they were saying it would crash in 2019 or just "it will crash eventually"
In 2020, they weren't saying it would crash in 2022, they were saying it would crash in 2020 or just "it will crash eventually"
In 2021, they weren't saying it would crash in 2022, they were saying it would crash in 2021 or just "it will crash eventually"
In 2022, they said it would crash in 2022 or just "it will crash eventually", and people who didn't realize it would actually happen in 2022 were in a bubble?
It turned out that 2022 was different, but the predictions weren't any different, which means they weren't actually meaningful predictions.
Didn't collapse the next month.
Didn't collapse the next month.
Finally collapses the one after. Was it still a POS garbage house? Probably.
"it will crash eventually" is more important, it results in people staying away/getting out of this market, for good. It's much more powerful than oh it's gonna crash on this or that date.
> > I think everyone was completely caught off-guard by the ferocity and pace of the crypto drawdown.
> If you were caught off-guard then you've been sitting in a massive bubble.
OP is saying people were caught off-guard by the specifics of the crash. That doesn't require being in a bubble, because there weren't any specific correct predictions that were distinguishable from the specific incorrect predictions.
Non-specific predictions may be useful, but they don't prevent you from being surprised by the specifics.
You know who didn't drink the koolaid? Cumberland/DRW and Jump.
For those who are in this market (as Coinbase is), they are useful in terms of planning and setting up a large reserve of rainy day funds - for less risky venture it may not be necessary, but for crypto it absolutely is. Unless plan B is to crash and burn which seems to be the MO for most crypto companies.
People started saying "yeah, there's a problem here" about the Irish property market in 2003 or so. Lots of people were saying "this will crash any day now". For years. Then between 2006 and 2010, prices halved, for broadly the reasons the doomsayers were saying (the global financial crisis was arguably a trigger, but doesn't explain the whole thing).
(Also, I would note that Bitcoin did crash in 2021, as well. And it's not like 2022 is likely to be the last crash, either).
HN has predicted 10 of the last two crypto crashes.
Plus there's also the "Lehman Brothers moment" provided by FTX. People are learning what "counterparty risk" is. If you're not daytrading, then suddenly it's worth considering moving your crypto off the exchange and assuming the custody risk yourself.
You have to believe. Especially if you claim to be a leader.
When has this ever been a thing? They raised tons of money in huge valuations and used it to hire a boatload of people. Tale as old as time.
Agree with the rest of your post though, it’s unclear what their endgame was/is to get into the black.
they have IPOed and insiders continue to exit as fast as possible
just scrapping the bottom of the barrel here :-), hoping that as this crypto-decade draws to a close, it was not a complete waste of time for all these people and a major distraction from more meaningful pursuits in digital technology. even if one does not participate, these pervasive hypes, whether crypto, AI don't leave anybody unaffected...
[0] https://www.theguardian.com/business/2022/jun/06/london-meta...
[1] https://www.ibtimes.com/australian-stock-exchanges-blockchai...
(Sorry if I just seem to want to point out a mistake - your first sentence just sounds so specific that it just got me interested in what you mean.)
Of course, being electronic is a later thing, as far as I know the NASDAQ was one of the first.
What we should all be asking ourselves is “am I on payroll at my current job to act as ballast?”
Huh, I would call that ~$2 lost for every $1 of revenue.
So yes, they lose $2 for every $1 earned.
Incorrect from a definition perspective:
spend = expenditure
loss = revenue - expenditure, where expenditure > revenue
If I spent $10 to make & market a fancy x-mas box, but only sold it for $5, I didn't lose $10. I lost $5 ($5 - $10 = -$5).
To get to a net income loss of $550 mil from a revenue of $590 mil:
Net income = Revenue - expenditure
-550 mil = 590 mil - expenditure
expenditure = 590 mil + 550 mil = 1.14 bil
The initial ratio from jsnell is correct: They spent $2 to bring in $1. They lost $1 to expenses to bring in $1.
Under this premise it is reasonable to hire up to build this framework if the investors are willing to foot the bill during the discovery phase. I am not saying this is prudent, just that it is a consistent story that they sold.
This is not unique to crypto: biotech startups are raising billions a pop in a Series B (not a joke) promising to use generative AI to find miracle drugs.
But that is crazy. It is not that hard to understand the collectibles business is emotion based. You tickle the soul of the customers just the right way so they want to own a hoard of your crap. Then you create an artificial scarcity to profit from, and a thin veneer of "but-it-is-not-a-waste-of-money-because-i-can-sell-it-later" feeling to make your customers not instantly regret the transaction.
I understand that an NFT might do some of it, but to replace all the physical collectibles? Are rich businessman going to parade around wearing NFTs on their wrists? Crazy. :D
I know several people (some of whom could even be considered businessmen) who do exactly that.
Coinbase isn't a direct comparable to CME because CME only does the exchange function.
Coinbase combines several different types of financial institutions in the crypto space:
+ exchange : order matching engine of buy & sell -- analogous to NYSE/NASDAQ/CME
+ broker : custodian of customers' margin accounts -- like Schwab, Vanguard, Fidelity, etc
+ bank : digital wallet and loans with customers' crypto as collateral -- like JP Morgan, Bank of America
+ ecommerce payments : analogous to PayPal/VISA/MC
Even though CME deals with trading corn commodities, it is not a bank for people to use corn as collateral. Therefore a corn farmer can't go to the CME and get a loan and pay it back when he sells his crop harvest.
Regardless of all the various financial areas they're in, Coinbase got overstaffed (like many other tech companies overhired) and so they're making aggressive cuts.
CME also has to build risk and margining technology since its customers are generally managing complex derivatives portfolios and CME has to understand what risk those portfolios have under all sorts of tail market events.
Yes, I understand that and I wasn't dismissing CME as a simple platform. I used to work across the street from the CME and saw the traders walking around in their yellow jackets every day. The "corn" was only one example to tie it to a bank services scenario.
>, and a minter of new derivative products like S&P futures
I think Coinbase recently offered something similar: https://www.google.com/search?q=Coinbase+launches+Derivative...
Somehow, the wordsmithing in my comment got misconstrued as being dismissive of CME as being too simple and praising Coinbase as being complex.
I was trying to convey that a farmer can't get a loan from the CME to finance his seeds/fertilizer/etc and use his corn crops as collateral. What is factually incorrect about that?
Coinbase and CME have obvious overlaps, but they also have massive financial functions where they don't. That's what the corn bank loan example was trying to highlight.
EDIT to reply: >The assertion is that Coinbase has more work to do and thus more need for headcount than CME. I dispute that.
Sorry for the misunderstanding! I never intended to convince people that Coinbase needs more employees than CME. I should have put a disclaimer in my original comment such as "Coinbase may only need 1/10th the number of CME employees but as fyi, Coinbase is not a direct comparable to CME..."
It's an interesting idea, but don't think you can segregate their exchange role from their authorship or standardization of financial instruments. Any exchange is either creating products to trade or licensing them. Any commodity exchange is naturally interested in setting contract standards related to delivery and quality.
They are an exchange, through and through. Everything else is a side project in support of that one role.
> Coinbase isn't a direct comparable to CME because CME only does the exchange function.
> Coinbase combines several different types of financial institutions in the crypto space:
> + exchange : order matching engine of buy & sell -- analogous to NYSE/NASDAQ/CME
> + broker : custodian of customers' margin accounts -- like Schwab, Vanguard, Fidelity, etc
> + bank : digital wallet and loans with customers' crypto as collateral -- like JP Morgan, Bank of America
> + ecommerce payments : analogous to PayPal/VISA/MC
> Even though CME deals with trading corn commodities, it is not a bank for people to use corn as collateral. Therefore a corn farmer can't go to the CME and get a loan and pay it back when he sells his crop harvest.
> Regardless of all the various financial areas they're in, Coinbase got overstaffed (like many other tech companies overhired) and so they're making aggressive cuts.
So maybe Coinbase should only keep profitable parts and cut/restructure/sell parts that aren't, instead of burning all their revenue in hope of capturing the market?
Take a look at the Coinbase Subreddit to see how many suckers are getting hacked, scammed, locked out for AML reasons on any given day and getting their lawyers to write legal threats to Coinbase. Responding to this all costs money and it's where the Binance model of avoiding AML responsibilities and hiring outside US is superior (until it isn't, when execs end up in a US prison).
Second, Coinbase has ambitions beyond just being an exchange and that's driven a lot of hires. It runs Coinbase Ventures, Coinbase Cloud, an NFT platform, develops tooling (e.g. Coinbase Wallet), and contributes to crypto protocols. A lot of the recent hiring was driven by these "other bets".
For one, they do much more than CME.
a company like Coinbase needs hundreds if not thousands of support staff like a retail bank would that scales with the total active customer base.
the total number of employees doesn’t tell you how many are in a support function.
I guess all companies are making cuts before new fiscal year? Survive this month and maybe you're ok for time being?
I haven’t been able to find a view that shows a downward trend since…
Trend should be -2X
Going to the 1D view it looks like it may be fixed, but the other views are showing bad numbers.
I've noticed Fidelity removes default graphs from dashboards or changes the time period during major market corrections. Articles urging people not to panic sell also start appearing. Here's what they emailed customers on March 5, 2020:
Historically, the economy and the stock market have bounced back and market gains made during economic expansions have far outpaced losses that occurred during recessions.
Considering what people do and the track record of buy-and-hold, this is a responsible move.
On the web app I see options for viewing performance over reasonable periods like 1d, 5d, 1w, 1y, all
There is nothing ethically superior about any financial manipulation. @sama just raised a multi-billion round on OpenAI. “Open” “AI”. Loopt sold to Greenpoint with thumbs on the scales from both pg and Conway, which is why he’s in a position to do that.
Parsing the details about how wealthy people with the right parents extract wealth is an exercise in parsing minutia.
The chosen get richer. The militant guardians of freedom fight for Drepper’s ideology (he works for Goldman Sachs).
And I’m pretty comfortable with all this: it’s the same as it always was.
Most crypto is a fucking scam. But it’s the same amount of cynical and worse connected than YC.
If the Coinbase app supported it, that would allow all of the Coinbase users to do real decentralized micropayments.
Any theories, why they don't do that?
"Oh, you also have a lightning app? Cool, I'll send you the money this way."
2. It requires a transaction to L1 to open/close a channel. If 1B+ people used it the Bitcoin network itself couldn't cope with that. At 7tps it can handle a max of 220M transactions per year.
3. You need enough liquidity in all channels to your destination to send a payment. This is fine for micro transactions but it can't handle $1k+ transactions well at all.
4. You have to re-balance channels or they stop working.
5. You need some sort of watchtower / guardian node to prevent the other person from being able to steal your funds.
ZK-Rollups completely obsolete the lightning network. If Bitcoin did a hard fork to make them possible every single person would migrate to them. Lightning is not a long term solution, it's mostly a meme to throw back at people who say Bitcoin doesn't scale.
You can't use it to make a payment to an unrelated person without opening a channel. So there's a "routing layer" where you find a channel in common, like trying to send a UUCP email. e.g. if you wanted to send to another coinbase user, you'd send over your channel to coinbase and they'd send it out again over their channel.
But then .. you could just both use a coinbase payment account?
If you want an exchange that keeps up with the ecosystem you should use someone else. Kraken qualifies: https://blog.kraken.com/post/13502/kraken-now-supports-insta...
What? They’ve been supporting segwit addresses for years
You only get the transaction size discount with “native” segwit transactions that are BECH32.
https://www.ledger.com/academy/difference-between-segwit-and...
https://en.bitcoin.it/wiki/Bech32_adoption#Exchanges
https://blockstream.info/tx/62c16aeb80944ed8e6d4c896dbd88661...
LN is also unreliable to this day and i frequently get routing issues about 15% of the time using the most popular custodial LN wallets and sending to popular LN payment gateways. I'm guessing it would be even worse if i was transacting with small shops or self-hosted LN users. This would be a massive customer support burden.
I know he’s said this but it’s 100% bullshit since Kraken is able to list XMR just fine.
LN is definitely good for something where there's an in-person exchange of goods so at least potential abuse would leave someone at a physical location with surveillance footage, or where there is a subscription service that can be turned off if the payment turns out to be fraudulent. LN has a higher likelihood of assurance of funds delivery in a timely manner than a credit card -- but that there are entities developed that will insure traditional credit transactions.
Or, is speculation the only use-case for crypto? Sure we've had example use-cases for crypto as a value store and exchange medium, but outside the bleeding-edge of technology, and away from the VC fever dream (let alone con-artist central), where does crypto fit into society?
There are major incumbent forces all the way up to government that are keen to control the rise of this technology so it's clearly not an easy task, but for the likes of Coinbase to survive I think we need to see real value in using the things you actually trade on their exchange. Unfortunately right now it seems that Coinbase is a company predicated on the assumption that “crypto is going to become the main way to exchange value at some point in the future”.
Companies powered by hype and VC speculation invariably collapse as markets move on, so if I were investing in them I'd be really keen to have them allocate the majority of their resources at pushing crypto adoption into non-investment-based use-cases, which is to say, banks having large crypto teams is much less important than average people actively using crypto for goods and services (if that's to be the dominant use-case for crypto.)
Crypto has never had a real answer to that question. The opportunities of crypto are things like you owning your money instead of the bank, fast transaction speeds and anonymity - nobody but a tiny percentage of people give a crap about any of this. Certainly not enough to supplant the most prevalent piece of infrastructure in modern society, the fiat.