It… isn’t. I can go create and list a unique nft on OpenSea right now. It almost certainly wouldn’t sell, but it might. I could catch lightning in a bottle, unexpectedly create something people value, and see its price skyrocket.
I mean, some nft’s are worth a lot of money because some people think they are worth a lot of money. And they also think copies of that nft aren’t. That’s it. I’m not sure what other explanation you’re expecting.
Chapo on NFTs recently:
Those other pronunciations shock me. Then again, I didn’t know people pronounced ethereum any way but ee-th
Seems bad
https://twitter.com/sophiamzaller/status/1524150654897463302?s=21&t=04nrnSKIwj80C4KZKhbPHA
Also, lol
https://twitter.com/iblancore/status/1524295622613950464?s=21&t=04nrnSKIwj80C4KZKhbPHA
Yes that’s how bankruptcy works. Did you think crypto deposits were FDIC insured?
Forget FDIC, it’s more like if your brokerage company goes bankrupt. If Fidelity goes bust, their customers won’t be treated as Fidelity’s general unsecured creditors!
So does Coinbase have secured creditors, whose loans are secured by the billions of dollars worth of user’s deposits? And who would get paid depositor’s money in bankruptcy?
Not all that familiar with bankruptcy law but I don’t think that if Fidelity goes bankrupt their secured loans get paid from customer deposits. Right?
Thats why I printed out all my bitcoin and put it in a safe deposit box
I thought SIPC only covered up to $500k per customer, so for anything over $500k, wouldn’t you just be an unsecured creditor? Some brokerages do have excess insurance coverage, but it’s not required. Also, SIPC doesn’t cover everything you hold with a broker (probably not relevant for most people as it’s things like investment in currency futures, unregistered hedge funds).
I don’t think anyone actually knows how a bankruptcy court would treat customer crypto assets (as the rules don’t cover it and pretty sure no court has dealt with the issue before). Hence the disclosure that their customers “could be treated.”
Brokerage firms don’t co-mingle their deposits and operations. If Fidelity wants a loan to finance its operations it doesn’t put up its depositors’ deposits as collateral. (Which seems to be implied as what is happening on some level if the depositors will be treated as unsecured creditors in a bankruptcy). If a brokerage firm goes bankrupt and all this has been handled properly the assets are still owned by the stock and bondholders and it can all just be transferred to a solvent brokerage firm. If they were comingling funds and doing fraud then that’s when SIPC protections come in I think? Like if the brokerage firm said they bought me 1000 shares of Alcoa but they took my money and, uh, just didn’t? But sent me statements as if they did? Then I can get made whole by SIPC I think. But not if I bought a million shares of Alcoa. But if everything is on the up and up and the operations of the brokerage firm goes bankrupt and my million Alcoa shares really were properly bought and paid for and everything was properly segregated, they’re still mine.
And as far as, “we don’t know how the courts will deal with crypto bankruptcy,” well, OK. Except Coinbase could have set itself up legally to not make its depositors unsecured creditors in a bankruptcy. Set up some legal structure to do so. Some poker sites did this. Others, uh, not so much. But they didn’t do that!
As always just manage your own wallet and especially don’t do business with coinbase and you don’t have anything to worry about.
Dr. Patel is elite at the Twitters. S+++ tier.
Doesn’t this suggest some basic consumer protections are needed? The biggest exchange is threatening to yeet 100s of millions of dollars from unsavvy investors and the response from crypto fans is just a shrug?
Right - but if a brokerage is going bankrupt, I’m not trusting them to not start doing shady things to forestall that. You’re probably safe with Fidelity, but if you’re using a smaller broker, I’m not feeling safe in bankruptcy.
I do think Coinbase is segregating customer assets and not using them as collateral, but the disclosure means they don’t know if in bankruptcy you’ll be a secured creditor (with the security being your assets) or just treated the same as anyone else that Coinbase owes money.
Lol this is like saying there is no problem with no regulation of banks just because you can keep all your money under your bed. One of the biggest crypto companies manages its customers’ money like Absolute Poker did. Seems important!
Crypto is totally awesome and is a viable alternative to actual money. Also lol you for using (checks notes) the largest exchange and assuming your deposits of fake money are completely safe.