Bybit loses $1.5B in hack

The quote is incorrect. If I deploy the same smart contract to two different EVM chains, from the same wallet, with the same nonce (pretend it's the first transactions I'm doing with this wallet on each chain, so nonce 0), then the transaction hash will be the same on both chains. That's not odd.

Yes, each opcode has a gas cost. Some are quite expensive, like writing storage (changing network state). Each block has a target gas limit. Say 30 million. A single transaction cannot exceed that. Additionally, a transaction specifies a bid on how much they are willing to spend, in ether, per gas. That said, transferring funds does not typically require significant gas.

What you suggest is possible (evaluate the side effects of the transaction and present that information to the prospective signer). But at present they don't do that. I'm not sure about this specific case but often it's just a supplied text string (that can say anything) that's displayed. Basically the system depends on trust in whatever came up with the transaction payload.

But the space of their effects on the Blockchain state is vast. You need software to translate those effects to a form human can interpret as "what I want"/"not what I want".

Ie. engineering work needs to happen in the UI they used to confirm the tx

Sometimes you have the right contract, but an attacker is making you pass in different parameters than you think. The most popular hardware wallets don't help you with this; the Ledger Nano S for example just alerts you that you're passing some kind of data to the contract, so you're relying on your computer to show the details. This is a problem when, for example, you're interacting with a token or wallet contract, and you think you're telling it to transfer $ to Alice, but actually it's $$$$ to Bob.

But there are better options with larger screens, which actually display contract parameters on the secure device.

Coinbase charges 100bps (1%) between trader & maker fee.

Just last quarter, Coinbase had:

  Revenue:    $2.2B
  Net Income: $1.3B

https://s27.q4cdn.com/397450999/files/doc_financials/2024/q4...

You might be interested in reading Warren Buffett's reasoning for not investing in crypto. Basically he says crypto produces no goods, products or services, and it's only value comes from finding a "bigger fool" to pay a higher price than you did for it.

It's value is from speculation assuming future speculation will assume more future speculation

Yeah, as a layman this MSTR explainer was an "aha" moment for me:

No, what is likely happening with all the convertible bond issues is that MicroStrategy prices the bonds in a manner to attract market neutral hedge fonds, meaning arbitrageurs. Saylor has briefly mentioned these firms, as opposed to firms seeking actual Bitcoin exposure. For issue after issue, they can be spotted as the largest bond holders by anyone with a Bloomberg terminal. By buying the bonds, even when conversion price is at a large premium, and by simultaneously shorting the shares, these arbitrage funds can lock in close to risk-free profits. Due to the convex nature of the value of the convertible bonds, the hedge funds attempt to profit no matter whether MicroStrategy shares rise or decline

Like, a broker profiting off PFOF in the stock market makes sense because there's an underlying asset generating real cashflow that people are buying into. But where is the money in crypto actually coming from? You have to pay miners, brokers, rugpulls/thefts/etc and there's barely any cashflow from the underlying assets (dApps?). But if it really is ~just a casino, with retail gamblers as the only real source of cash, it can still be profitable for smart money to pour billions in and use their PhDs to trade the vol. It goes up, it goes down, overall retail is bleeding huge amounts of cash on a sort of 5 dimensional pyramid scheme but enough gamblers go viral winning the slots/blackjack that the casino doesn't run out of customers.

Can this continue indefinitely? Maybe / probably? Seems similar to sports betting, Polymarket, retail now ~70% of options trading. The west and especially America becoming a gambling culture. The "bubble" may burst and reinflate over and over.

https://medium.com/@bdratings/all-your-models-are-destroyed-...

Hyperliquid, a decentralized perp exchange, is a good proxy for ByBit’s revenues. On an average, Hyperliquid does between 800k-1M in revenue per day. ByBit is substantially bigger and easily does 50-100M in monthly revenue

I know! As I stated,

> Even considering a huge part of that volume is coming from institutional players who enjoy significantly reduced commission rates...

But the volume is huge. Even if we take the best publicly shared MM rates from Bybit (which is 1.5bp taker commission, 0.5bp maker rebate), and assume the whole volume is traded with these rates, it is still 1bp from 40B dollars, which is 4M dollars daily.

You pay 1% on Coinbase because they are a quasi monopoly due to regulation. Offshore exchanges take less than 0.1% usually.

The neutral rate for perps is 10%, which is lower than the credit card borrowing rate in the USA. And nothing prevents retail investors to earn it by shorting while holding spot.

Last, Tether is crypto's most profitable business, and likely the world's most profitable if you account on $ of profit per employee, and is not an exchange.

Institution is making money from trading fees which are not too high percentage wise. But the trading activity is very high, for many reasons. A lot more people can participate, from all over the world. Some use it to circumvent sanctions. Some enjoy day trading (no need to deposit $25000, as with US stocks). There are literally millions of instruments to trade. Some like to write algorithms, arbitrage, market making etc. Some dream of 1000x returns (and few do get them).

I have a license to drive a car. Having it doesn't limit my ability to mint crypto.

Gary Gensler called BUSD a security and banned it years go. What a guy!

How it it different from what banks do? (Except for a central regulator.)

Your exception is the answer.

Only the central regulator can "mint" money and doing so has real world consequences. The central regulator has financial incentives to limit this sort of activity.

The bizarro world of crypto has no such regulation and as a result, it is inherently unstable.

The proof of this is right in front of you --- it is the fact that "stable coins" exist. The only way to bring stability to the bizarro world of crypto is by tying it to "fiat" --- which is the very thing crypto is supposedly working to eliminate.

Contradict and hypocrite much?

Because while banks hold duration, the net value of their current assets, future asset streams, and equity is above zero. Indeed the core focus of the business and regulatory side is ensuring this is so.

The central regulator caveat is also a huge caveat to brush aside. During the last round of systemic stress, the banking system essentially got a guarantee that all uninsured deposits would be protected, and banks were allowed to post their collateral for liquidity at terms that no other business has access to.

What OP is referencing is the oft-seen practice in the crypto space where failed entities fill an asset hole with propped up tokens, essentially transforming their paper loss on the balance sheet into liquidity risk that doesn't show as readily.

The important point here is that in the latter case, the entity may be fully insolvent, even after accounting for future cashflows on loans. When it comes to banks, even the left tail cases like SVB, their "problem assets" are things like long term treasuries, which are way down the risk curve when compared to the ponzi-tokenonics style "stablecoins" that we've seen unwind over the past few years.

> How it it different from what banks do?

I often read this sort of comment from crypto-defenders, but is it what banks do?

I’m relatively naive about these things, but my impression is that a bank losing this proportion of their assets can’t just ‘pretend’ they have the money, or create ‘new’ money.

Banks don't print money for each other, and if they get money for free it's backstopped by the government and hence all of us. Crypto wants this single aspect but none of the central regulation.

Both systems stink for those at the end of the chain, i.e. us; you can decide which one is worse.

FEDS can print money while Binance does not

Department of Defense; after the research funding cuts, the bureaucrats had to get creative about money sources.

I think they meant DoS.

Your transfer fees are a bit off.

Coinbase is 10,200x more than you stated ($0.51 to send $100) BUT that’s only if I send directly on Coinbase. Coinbase Commerce takes 1% so it would actually be 20,000x more than you listed.

Stripe is 64% of what you stated ($3.20), and that’s with no processing fee discounts like you can get with higher volume.

Now, obviously, $3.20 > $1 but it’s not apples to apples. You can claw back your money with a card for one. there are many cases where I would prefer to pay the extra $2.20.

and the existence of financial scams isn't the same for fiat because...?

This is getting pretty close to the banking system, at which point one needs to ask - maybe just improve existing protocols?

> 2. Decentralized voting on reversal of transactions (90-95%+ vote needed to reverse to avoid 51% attacks)

Couldn't you technically just 'git checkout' a previous commit from before the fraudulent transaction occurred and pretend it never happened? Isn't the real problem that you'd have to convince a majority of users to do the same?

Ethereum is programmable, such a protocol can be implemented as a smart contract.

Not going to work, otherwise it would already have been done.

People who control or take advantage of cryptocurrency don't want this to happen.

Good luck getting 90% of a large group of people to vote the sky is blue.

I can't believe someone posted that without knowing they actually used Gnosis Safe

lol. Good times.

It’s not money though. It’s property at best. It doesn’t get held to the same standards.

CryptoBros are all about “no laws, do whatever” right up until the, inevitable, point at which /they/ are getting swindled and then they want to cry foul and run to the authorities.

It’s just like the whole DAO situation which showed “Crypto is immutable and we want to live and die by the code unless of course someone finds a flaw in the code and steals our money, then we will roll back the immutable chain to recover it” what a farce.

I don't know the answer to that, I only have guesses.

But one mistake we make over and over is that we write code that just does its best to answer questions as quickly as possible. And when those questions show up 10x as quickly as they have any other time in our company history, they either just plug right along or maybe throw an error.

Someone shouldn't be able to empty a billion dollars out of an exchange in 10 minutes, unless they do $250B in daily traffic. And I suspect most of them can be, and in even less time than that.