Blockchain.com cuts 25% workforce amid crypto bear market

https://www.coindesk.com/business/2022/07/21/blockchaincom-cuts-25-workforce-amid-crypto-bear-market/

by hassanahmad • 4 years ago

99 176 4 years ago

medo-bear17• 4 years ago

a week ago the market was worth cca 800B. today the market is worth over 1T. for some perspective just how huge this is, ukraine's foreign debt is at 20B, or 10% of the weekly growth of the crypto market. some crash lol

leereeves• 4 years ago

The crash happened more than a week ago.

What was the crypto market worth three months ago?

medo-bear17• 4 years ago

https://www.livecoinwatch.com/crypto-market-cap

it was hardly a crash. crypto market is simply huge. there is no denying this

gingericha• 4 years ago

~$3T according to this article https://www.msn.com/en-us/money/markets/a-rally-in-bitcoin-a...

CapricornNoble• 4 years ago

Better yet, on 9 November 2021 (BTC's all-time high), the crypto market cap was closer to ~$2T:

https://coinmarketcap.com/historical/20211109/

Trading volume for Tether alone on that day was ~$93B, greater than the ENTIRE market's volume today ($89B).

IntelMiner• 4 years ago

How much was the US real estate bubble before it popped?

medo-bear17• 4 years ago

people are not going into debt to buy crypto

est31• 4 years ago

1.3 T according to: https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220...

NikolaNovak• 4 years ago

Such numbers always fascinate me, and showcase my ignorance (I freely admit it; I had a "Ask HN" recently about some "Economy 101" suggestions:) of both regular financial/economy, as well as crypto.

It's 1T worth of... what?

I can kinda sorta understand 1T of car factories and farms and food plants. I can understand the over-simplified-into-nothingness capital model of I give you $1000, you build a factory, you build cars, you create value, eventually you give me back $1100. Or something.

I can even intuitively understand (or fool myself) as to 1T of services - tourism, accounting, software, consulting. I can see its place in the world, the interconnectedness with industry and people and products and markets.

I cannot visualize/intuitively understand 1T of crypto. It feels so... insular, self-contained. 1T of... companies running datacentres running random calculations... for money, kind of? People giving each other more and more non-crypto money and making it very complex? It feels like this whirl-storm of activity, vortex that sucks stuff ("real world money") in, but I don't understand its connectivity to outside world, it's output, the balance of interfaces. My mental image is incomplete and clearly wrong.

(I suppose I should think of it more along the lines of, say, Gold market, but I don't understand that either :D )

peyton• 4 years ago

I deposit a dollar in a bank account somewhere and mint one DollarCoin. The crypto market cap is $1.

Repeat that several times and add lending.

bfaviero• 4 years ago

Do you know how large the derivatives market is?

onion2k• 4 years ago

1T of 'belief that someone will pay more than the last person'. That will continue oscillating between the highs and lows until either someone finds a genuinely good use for crypto, at which point the value rockets upwards and today's coin prices look comically small, or people stop believing and the whole thing collapses.

yieldcrv9• 4 years ago

The only mistake here is that you chose to apply a separate higher standard to crypto, as opposed to seeing how a lower standard fraught with disaster is used in traditional markets.

This is a conversation about “public float”, and so your comparison or explanation of whats hard to understand for you should be about float.

Any stocks, bond, commodity, currency, set of assets, all experience the same phenomenon: where none of the daily or weekly marketcap changes have anything to do with the equivalent amount of money changing hands.

BenoitEssiambre• 4 years ago

The casinos market might also be something to compare to.

ekianjo2• 4 years ago

how do you reason about cash reserves then?

kwertyoowiyop• 4 years ago

No…You’ve nailed it. Create a hundred million “tokens.” Buy one for $10. Now you have a billion-dollar market cap.

rufusroflpunch4• 4 years ago

There's multiple things to consider with the crypto space:

1) Bitcoin: It is attempting to establish hard money standard outside of state authority. It's slow going. Takes a long time to build and educate. Currently largely treated as a store of value, but there are efforts under way to make it usable as a method of payment (the Lightning network).

2) Tether and fully backed stablecoins: These provide dollar liquidity to the crypto ecosystem. More importantly, they are a very important store of wealth for the developing world, where they want dollars but laws and capital controls prevent stunt that.

3) Shitcoin casinos: The space for degenerate gamblers.

anjc• 4 years ago

It's 1T worth of... what?

US dollars

Ekaros3• 4 years ago

In general I always felt bit weirded out by whole crypto "market cap". So there is X million tokens and they are worth this number... But how much money has there actually ever been invested into it?

Not that stock market and "wealth" loss there makes much sense to me either. Or that they own what ever, power plants, ships, factories. And they sell whatever they make. Ir I get point that company makes this much money and is expected to make it going forward. Still, if the number they are traded for drops something is lost? It wasn't there in first place.

yieldcrv9• 4 years ago

The exchange recently revealed it was dealing with a $270 million shortfall from lending to beleaguered hedge fund Three Arrows Capital.

oh okay so they could have just not done that and they would be immune to the market conditions

The reduction brings the firm’s staffing back to January 2022 levels

what

simmerup2• 4 years ago

Stories like this make me wonder why I keep getting job advertisements from crypto companies for absolute insane amounts of money.

LilBytes• 4 years ago

I wondered the same, still getting them now and I'm increasingly happy I've said no.

I wasn't on the market to begin with but even if I was, Crypto has been too grey for me to gamble on. Now? It's straight up red.

yieldcrv9• 4 years ago

Their headcounts usually aren't large and they make insane amounts of money

Whats the mystery there?

They pay in cash, and tokens with short vesting periods of a few months which are sellable for cash, saving you 4-8 years of your life working at FANGs or being paid in illiquid lottery tickets at non-crypto startups

Some also pay in traditional equity (the illiquid lottery tickets), but wont pretend like thats the good deal like all web 2.0 startups try to gaslight their employees into thinking

Its pretty competitive. Remove the “crypto” peculiarity and you just have revenue generating tech startups with a product they can give you that’s sellable for cash on ebay, who might also offer you some ownership in the company also sellable at a higher price since there are a bunch of people looking to buy shares of revenue generating tech startups.

SideburnsOfDoom• 4 years ago

for absolute insane amounts of money.

What kind of currency do they typically pay in?

bluelightning2k6• 4 years ago

The main proposition of crypto (aside from speculation because "graph goes up") is that you don't need a centralized exchange.

Then all these centralized exchanges popped up to make it easier.

Whenever I see these types of announcement I have two reactions:

a) I cheer, because the sooner the pyramid collapses the less the damage.

b) I'm sad because these are real people losing real jobs

cowtools7• 4 years ago

real jobs?

Also, I don't think that the main proposition of cryptocurrency is that you don't need a centralized exchange. If you want to exchange fiat for cryptocurrency via the credit card or bank transfer, you need a trusted peer who can accept those forms of payment- whether that's a business or an individual. The centralization and insecurity of exchanges is due to their weakest link- the centralization and insecurity of the fiat system.

bluelightning2k6• 4 years ago

Yeah I agree. That was kind of my point also -- the "decentralized" block-chain is pretty reliant on centralized exchanges.

Real jobs is an interesting one. To the individuals yes they are real. To the economy there is no value creation and therefore the work done by these companies is just ultimately burning investor dollars & the planet in a lose:lose situation (as with everything crypto related).

chrisseaton• 4 years ago

real jobs?

If someone’s paying you then it’s a real job.

SilasX• 4 years ago

The main purpose of cash (aside from drug empires) is that you don’t need a centralized service to make transactions.

Then all those banks and wire services popped up for cases where physical cash doesn’t work.

lolinder• 4 years ago

I'm as much of a crypto skeptic as the next guy, and there are plenty of decentralization failures in crypto, but you can't have "all these centralized exchanges". The fact that there are so many suggests something worked.

I don't think the promise of Bitcoin was ever that there would be no exchanges, only that no one would be beholden to any given provider. As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized.

2muchcoffeeman2• 4 years ago

As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized.

I once asked a friend who had signed up to some crypto exchange "Do they just give you your keys when you sign up?". They replied, "What keys?" Eventually they found it. But it's not like they educate the user.

hnthrow101015• 4 years ago

I don't think the promise of Bitcoin was ever that there would be no exchanges, only that no one would be beholden to any given provider. As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized.

Can't you see this defeats the whole purpose though? By this logic, traditional banks are also decentralized because you can also take your money out and go to a different bank. The word "decentralized" has no meaning in crypto parlance, it means whatever the speaker wants it to mean at any given time. And at least banks are FDIC insured, when a crypto exchange loses all your money then you can't really pick up your keys again because everything is just gone.

Veen• 4 years ago

The main benefit of exchanges is that they generate market liquidity. It's certainly possible to trade crypto without an exchange, but it's much more difficult to find buyers and sellers. I suspect that something akin to an exchange would always come about when there are lots of people who want to trade conveniently.

throw8383833jj8• 4 years ago

i know here on hacker news we tend to see everything from the technical perspective and that means bitcoin isn't very interesting. But, try and see things from a financial perspective.

the value proposition of crypto has nothing to with decentralization. Bitcoin isn't about Bitcoin. The reason bitcoin is valuable has more to do with what's happening with governments and fiat currencies than anything about crypto or bitcoin. Ask anyone, why they got into bitcoin, ask any company that got into holding bitcoin instead of cash: they'll tell you: It basically boils down to "I lost faith in fiat".

There's been a huge 50 year bond bubble brewing and 100 year government bubble brewing where govt uses larger and larger amounts of GDP with ever larger debts. The explosion of debt is insane. Ask any financial professional, and they'll tell you with all that leverage in the system, there absolutely WILL be a deleveraging. The govts of the world will NOT be able to meet all their obligations. They can't raise taxes and they can't cut spending. That means, they must default on their currency (this is basically just a huge huge tax on anyone who's holding cash or bonds, even if inflation only stays at 10%, that 100K tax per year on anyone holding a million dollars). And when the Dollar and all the other fiats of the world go bust, you're only going to want to hold 3 asset classes: Equities, Real estate and commodities (gold and bitcoin). Real estate is hard to execute and not scalable at all. Gold, can't be held outside an IRA. So, what does that leave? just Equities and Bitcoin. and anyone that wants any diversification is going to need some bitcoin. one by one sooner or later, everyone is going to come to this conclusion, it's just a matter of time. the future will be one where a 60/40 portfolio is not 60 stock/40 bonds but 60 stock/40 bitcoin.

Bitcoin isn't attractive. On the titanic, do you think, anyone wants to get onto a rickety row boat with no seaworthiness whatsoever? While the music is still playing and party is going, no one gets on board. But, when it becomes clear that the titanic is sinking, everyone's rushing to get onboard. and when Fiat sinks, there's really only a few liferafs: equities, real estate, gold and bitcoin.

nradov• 4 years ago

Nah. Except for a tiny minority of true believers, Bitcoin is just a trading vehicle. The line goes up or down. Traders win or lose. Faith in fiat currency or lack thereof doesn't enter into it. Don't believe the hype.

To the extent there is any real value it's primarily a means for wealthy Chinese to evade currency controls.

somewhereoutth2• 4 years ago

I'm sorry, in the nicest possible way, this is complete nonsense.

Governments can, will, and have printed money to pay their debts. Indeed, for sovereign currency issuers, debt (or whatever) is just an accounting measure. A certain amount of material wealth is collected by government in the form of taxes and redistributed back to society in accordance with the policies of the day. Debt and other financial instruments are just to smooth the process.

Bitcoin will never be a meaningful asset class, anymore than any other pyramid investment scheme.

bluelightning2k6• 4 years ago

Even as a crypto-sceptic I must give you some serious props for a very well-thought out and written comment.

I found this somewhat persuasive.

But despite being very well written, all this does is say why not fiat. If you're looking for a store of value, why not gold? If you're looking to put the money to work, why not value-creating such as real-estate or stocks, growing the wealth through value-creation?

mrwh• 4 years ago

Wouldn't we expect tough economic times to equate to a rise in Bitcoin's value, if that is the hypothesis?

hnthrow101015• 4 years ago

It basically boils down to "I lost faith in fiat".

Well, this makes no sense, because the value of crypto is also a fiat backed by nothing. With crypto it's not just the government you have to worry about, any person can mint infinite numbers of new crypto tokens, pump and dump them, take out massive debts and gain infinite leverage and then debase anything they want. The massive collapses and bankruptcies in crypto over the last few months should show you that the rickety row boat is actually an illusion, and you're really just stepping off into the water with no lifejacket. My suggestion? Take a swimming class, if you get my analogy.

waynesonfire• 4 years ago

I think you have it wrong. crypto unlocks a financial api to the masses, which is why the foundation is decentralized. Nothing to do with whether the entire stack has to be decentralized. The freedom that's unlocked is that anyone with a great idea can create a fintech company, like a bank, that would historically require massive captial to build such a network. That is what a distributed ledge brings to the table.

pjc504• 4 years ago

There's a bait-and-switch, or motte-and-bailey argument going on here:

- currencies can collapse. Venezuela, Zimbabwe; you could add Argentina and (checks chart) Turkey to this list. Against what do they collapse? The dollar.

- therefore the dollar will collapse <= this is the "show your working" bit

- therefore people will hold an asset class that does not pay dividends or coupons, indefinitely, against the possibility of this event

They can't raise taxes and they can't cut spending

They absolutely can if the alternative is SHTF.

There is also an assumption that bitcoin owners will be allowed on to their reserved lifeboat with no government intervention, which I wouldn't guarantee if SHTF badly enough. It's already been banned in China and India. I suppose the plan is to get enough senators bought-in that they'll protect you.

danans• 4 years ago

Ask anyone, why they got into bitcoin, ask any company that got into holding bitcoin instead of cash: they'll tell you: It basically boils down to "I lost faith in fiat".

Huh, nearly everyone I have asked basically told me they want to get rich (like FU money rich), quickly.

jc_811• 4 years ago

Centralized exchanges are completely unable to exist in the original vision of Satoshi. It's literally in the 2nd sentence of the original white paper:

"...but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network"

Using a centralized exchange ruins the peer-to-peer aspect and centralizes the transactions. Unless I'm missing something?

hackinthebochs5• 4 years ago

That line refers to the mechanism to prevent double spending. If the network needed a centralized controller to assign an ordering to transactions and ensure consistency, that would run afoul of Satoshi's vision. But centralized exchanges are merely users of the base network just like an individual broadcasting transactions themselves. They depend on network consensus just like everyone else.

bluelightning2k6• 4 years ago

An exchange is kind of like thermodynamics.

No matter how complex and viable a perpetual motion machine looks, you can't get more energy out than goes in.

Similarly - no complex restructuring of money into different assets will make more money come out than goes in.

Money only grows in a non zero-sum way when it's put to work in the real world: e.g. creating value by creating a product which is more valuable than the sum of its parts.

cowtools7• 4 years ago

The value that cryptocurrency provides is as a payment network between less trustworthy parties. In cryptocurrency, there is a net transfer of wealth from users (in the form of transaction fees) and owners (in the form of inflation/block reward) to miners, who provide value by securing the network.

But I agree that in terms of literal dollars, you could define some sort of "Gauss' Law of Economics" along the lines of:

The amount of dollars a financial entity has is equal to the time-integral of the rate of dollars entering the system minus the rate of dollars leaving the system.

bluelightning2k6• 4 years ago

The argument that the payments themselves are a service (while valid) has to be broadly competitive with the mainstream alternative.

So for "securing the network" crypto is very, very clearly less secure than conventional payments. (Far more hacks, defaults, and not centrally backed by government).

And the fees charged are vastly more and vastly slower.

The service is therefore so much worse at such a higher cost that it seems more like the arbitrary product that a Multi Level Marketing firm ostensibly sells than a real offering. (And the only real USP of "enables criminal activity" is not a valid USP that anyone should allow or touch.)

tootie• 4 years ago

The crypto evangelists made it sound like avoiding centralization and traditional finance would just sidestep all laws of economics.

blablabla123• 4 years ago

IMHO the importance of currencies is getting highly inflated. It's just a tool and if the real economy is not going well - or the part that is actually mapped with the currency anyway - then the numbers don't look good. I'm not sure about the zero sum game part but I highly doubt changing the scale (which is what Bitcoin for instance does by limiting the max. amount of coins) is changing the dynamics

bluelightning2k6• 4 years ago

Anyone else curious to see what terms Three Arrows Capital was offering?

For seemingly everyone in crypto to have such significant exposure to them, it looks like the entire industry was funneling retail funds into 3AC.

Maybe some of these clear ponzi schemes offering 20% yield were themselves promised 20.5% yield by 3AC.

It's an interesting take. Because it kind of lets everyone off the hook.

Wild speculation here BUT...

If I'm a token and I offer investors 20% but loan to 3AC at 20.5% and they seem credible, I can semi-credibly blame their unexpected default.

For their role as a hedge-fund 3AC can buy tokens with money loaned from those same tokens, pay dividends as they rise and simply fold as they fall.

dustinmoris• 4 years ago

Crypto is the future!!

Buy the dip!!!

HODL!!! (except our own employees)

irony…

randomopining• 4 years ago

Prob a lot of these companies are just cutting the bottom bucket. Don't companies like banks usually do this during a little downturn, using the "economic conditions" as an excuse even though they know it's just 6-12 months max.

hammyhavoc• 4 years ago

"Looking bullish."

birracerveza4• 4 years ago

"This is good for Bitcoin"

bearjaws• 4 years ago

The number of "crypto developers" I have gotten applications from is easily 3:1 when compared to people with more regular "full stack" experience.

Its way more than these large layoffs, even the smaller players have made big cuts.

matrix_overload• 4 years ago

Crypto used to be the domain with the most "free money" floating around and the most need to outhire your competitors. Of course, they overhired with a much lower bar than the industry in general, and of course the market will now be flooded with these developers.

scottLobster• 4 years ago

One interesting way to look at it is that the Crypto market is experiencing a 2008-like crisis (unregulated/less regulated shadow banks going bust), but without any bailouts.

Wonder if they'll learn the same lessons and come up with a Crypto federal reserve (likely called Unbanked DAO of Courage represented by Mark Wahlberg or some shit). Would be ironic.

thehappypm2• 4 years ago

Still waiting on the great Beanie Baby bailout too.

jsutton• 4 years ago

Bingo! Found the reliable Beanie Babies comment in a HN article about crypto :)

kkielhofner• 4 years ago

Some of the activities of SBF/FTX could be considered a bailout of sorts, just not a government one.

tmp_anon_22• 4 years ago

likely called Unbanked DAO of Courage represented by Mark Wahlberg

The celebrity endorsements of Crypto related investment platforms and product is so gross. Using themes like "you don't have to be smart to trade cypto" "be bold" its so gross.

Pakdef• 4 years ago

Some are getting bailed out by one of the largest exchange. Last I heard, there was a few billion dollars left in the bailout fund.

https://currency.com/ftx-bails-out-voyager-and-blockfi

mouzogu• 4 years ago

these exchanges are casinos for hopeless millennials and zoomers

the tokens are more like casino chips than money or stocks

Ekaros3• 4 years ago

Every day I'm more mystified and scared of where does all this money come from, and where it goes... To me it feels like nothing makes any sense. Who has this much money to throw at essentially gambling without any real revenue sources.

latchkey3• 4 years ago

How it started:

https://www.coindesk.com/business/2022/07/08/crypto-exchange...

“We are not getting the sense there is any kind of stress on the organization,” the person said.

How it is going, this article.

sigmoid102• 4 years ago

Tbf, that first article was about bad investment choices on their part. In last year's market, they'd just brush this off like nothing. But the current bear market is killing them (and all the other crypto fintechs) and these things just accelerate their fall.

latchkey3• 4 years ago

I disagree. The statement was clearly 'everything is fine' and when I read it, I entirely expected this new article to come out a few days later.

I was at a small DeFi conference in May and there were a number of BC.com people there. Young kids with little experience in the industry. They had clearly over hired.

On top of it, they did the cardinal sin of 'never invest more than you are afraid to lose'. They went into a high risk venture and lost hard. It isn't just the bear market.

Not all other crypto fintechs.

Blockchain.com cuts 25% workforce amid crypto bear market

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