BitMEX Blog

I can only recommend reading this [1] digest. [1] https://blog.bitmex.com/walkaway/

BitMEX | NodeJS / React / Kubernetes / Data Science / Security / Product Management / UX / QA | Onsite, Visa BitMEX is the the largest P2P crypto-coins trading platform in the world. As one of the fastest-growing companies in the Cryptocurrency and Fintech space, we provide a unique, trading-focused experience to digital currency markets. BitMEX is a finance-first company, building upon the technologies and best practices used in today’s fast-moving derivatives markets and bringing them to the web. We are hiring motivated self-starters to work on challenging problem sets. BitMEX serves hundreds of thousands of demanding customers transacting billions of USD per day. All positions offer ample vacation time, company work-abroad trips, and competitive salaries. https://blog.bitmex.com/careers-at-bitmex/

Phenomenally detailed article and interesting subject matter. Thanks for sharing. Of particular concern to the community should be the issuance and solvency of Tether. An audit is long overdue. As mentioned, our CEO, Arthur Hayes, wrote on Chinese exchanges running their customers' deposits in local bonds & stocks back in 2015 [1]. It's worth a read. We at BitMEX have brought a full-time writer into our employ just to bring more of these stories to the fore and help create the facts-first, inquisitive atmosphere crypto desperately needs. [2] 1. https://blog.bitmex.com/crypto-trader-digest-nov-30/#shadow-banks 2. https://research.bitmex.com

To answer my own question: quoting https://blog.bitmex.com/walkaway/ > "Brokers must post margin with the Depository Trust & Clearing Corporation and National Securities Clearing Corporation at the end of each day to ensure enough funds are reserved to cover any trading losses." > The “meme” stonks’ volatility skyrocketed, which meant that the clearing organisations could ask for more collateral from brokers on the grounds of needing to protect themselves from additional potential risk when settling the brokers’ trades. It takes two business days to settle stocks in the so-called digital age… > Robinhood in particular was told to come up with $4 billion, or they would not be able to facilitate any trading the following day. RH, apparently not having that much cash on-hand, said, “how about we stop trading or severely curtail trading in the stocks that are causing PAIN to various masters of the universe?” The clearing houses said, “OK, in that case, you would only need to post $700 million.” RH agreed to that figure, rushed to raise more money from the Street and/or Silicon Valley, and then subsequently shut off trading on Jan 28th and into the weekend. (This is information gleaned from an interview the CEO of RH gave to Elon Musk on Clubhouse). So, it's the clearing houses that strongarmed shutting down the trading.

Couple of points in response: Why would it disappear tomorrow -- it wont. Ill always run a full node. Many like me. This makes it valuable. Censorship resistance is not a marketing spin. Its absolutely true about bitcoin! There is no central controller, no government, how can anyone stop a valid private key holder from submitting a valid signature? Sure, we could block 8333/tcp on the great firewall, but thats why we have Satellites now!! As long as you have a communication channel that can reach the Bitcoin p2p network, it cannot die. The 'censorship resistance is marketing' attitude is spoken like a true first worlder. There are many places on this Earth where censorship resistant money is critical. There are many groups that cannot interact with the global banking system due to sanctions. Look around outside the US! and we havent even spoken about how destructive the centralization of banking has become: https://blog.bitmex.com/thetimes/ This blog post explains very clearly how the monetary base of our economy is inflated every day due to lack of diversity in banking.

Why would he do it for Dorian but not for Craig Wright, who caused immensely more harm to the community? Plus, Satoshi's email was hacked in 2014 (or earlier), and it was likely hacked multiple times[0]. [0] https://blog.bitmex.com/satoshis-2014-email-hack/

Also, you can find transcripts from the trial. I'm not sure if there are official sources that anyone has access to, but here's one I found from his October 31 testimony: https://blog.bitmex.com/sam-bankman-fried-trial-transcript-31-october-…

I worked on that codebase personally but here is a write-up on it: https://blog.bitmex.com/bitmex-technology-scaling-part-1/

Arthur Hayes has written extensively [0] on these points. [0]: https://blog.bitmex.com/white-boy/

"come about from nowhere" Oct 2020: https://www.youtube.com/watch?v=r7GzaLROW0E March 2020: https://blog.bitmex.com/inflation-is-coming/ May 2020: https://www.barrons.com/articles/the-next-big-inflation-wave-could-kic… Everyone and their mother saw big inflation coming. Just as barrons predicted as well, 2 years in advance. The fed would welcome it. In fact, that's exactly what the fed did. They welcomed it until it was too late and out of control. When Lagarde says this. You cannot allow a person of her position to be an idiot, she's not an idiot. She knew for a fact where it came from just as everyone else did. So when she says it came from nowhere, she's outright lying.

This is a solved issue with Merge mining. Here a primer: https://blog.bitmex.com/the-growth-of-bitcoin-merge-mining/

No, that's not how LN works. If the other party suddenly closes the channel at an old state that is beneficial to them, the funds will get locked for 2 weeks and you will have enough time to publish a transaction with a more recent state, which will reward you with whole balance of the channel [0]. [0] https://blog.bitmex.com/lightning-network-justice/

> Except for those third-parties, you mean? The third-party can't steal your Bitcoins. Assuming your node is online 24/7, you can verifiably cash out your Bitcoin on the blockchain at any time. The third-party doesn't hold your Bitcoin– both parties can close the channel and cash out, again without any trust. Your Bitcoins can't be stolen by a third-party, unless you and your watchtower fail to broadcast a transaction with proof there was a channel transfer. I read watchtowers are used to keep third-parties honest when nodes aren't online 24/7. https://blog.bitmex.com/lightning-network-part-4-all-adopt-the-watchto… They don't hold your keys.

Very unlikely it will be turned off, the miners could still keep mining other coins while mining bitcoin blocks even if there is no BTC reward. See "merged mining" https://blog.bitmex.com/the-growth-of-bitcoin-merge-mining/.

Same, I even bought some back in... 2014 I think? I'm yet ambivalent on if it's a factor on why it hasn't been able to attract serious attention, but I've heard the argument that doing calculations that have external value outside of PoW breaks the incentive mechanisms. To me, merge mining on Bitcoin[0] and MEV on Ethereum[1] are evidence against that argument, since we already have those forces in play today. So Gridcoins concept should work. [0]: https://blog.bitmex.com/the-growth-of-bitcoin-merge-mining/ [1]: https://arxiv.org/abs/1904.05234

Gold and bitcoin (and other cryptocurrency) seem like the only rational way out to me. I never asked for my dollars to be diluted like this and I feel powerless watching it happen before my eyes. https://blog.bitmex.com/choose-your-fiction/

Research rather than speculation: https://blog.bitmex.com/tether/

That is not strong evidence that they are not backed by USD. That is strong suspicion. > Lack of transparency does not necessarily indicate fraud https://blog.bitmex.com/tether/

Have you looked at any of the links I posted? https://blog.bitmex.com/tether-addendum-new-financial-data-released-fr…

Well at least for bitcoin there's a nice summary by BitMEX Research [1] [1] https://blog.bitmex.com/bitcoins-consensus-forks/

A lot of analysts put excessive weight on interest rate activity. Especially when rates start rising into reasonable territory (closer to the inflation rate), the effect tapers. For example, if the Fed raised rates to 100% tomorrow, it would be almost the same economic effect as if they raised it to 1000%. It would essentially just stop all borrowing in the affected channels and cause banks to reduce lending to the point where they don't find themselves needing to take a reserve loan and pay that rate. Arthur Hayes did an entertaining write-up of some of the other factors the Fed can use, two of which are either not being leveraged or actively conflicting with the interest rate hikes [0]. We could guess at political motivations for going soft on inflation until the election (while appearing to be hard on inflation) and then really ramping it up (including finally reducing the Fed's balance sheet and ramping up reverse repo sizes) in November when inflation continues, predictably, because the Fed keeps expanding its balance sheet and interest rates are still low (relative to most of its history). [0] https://blog.bitmex.com/teach-me-daddy/

See: "Where do the Yields come from in Crypto"[0] It is no secret that in a crypto asset bull market, people are "shorting" fiat to leverage long rising crypto assets. Additionally, just by virtue of overall liquidity entering the space longing assets there is demand for speculation and transaction volume, thus demand for fiat, across the space. Various protocols on ETH are providing decentralized trading (Automated Market Makers), as well as other financial primitives like lending and borrowing. So... yields accrue to those who supply fiat liquidity to borrowers (who yes, are speculating on crypto assets; "shorting" dollars). They also accrue to suppliers of liquidity to AMM's in the form of transaction fees to the various protocols. So, "monetary velocity" is high in DeFi and crypto now, so yields go to those enabling it. When bear market comes, it is almost certain the double digit fiat yields will decline. But will they still be higher than pitiful bank and sovereign bond yields? Maybe. Also at that point perhaps lending crypto assets to those "shorting" ETH/BTC and longing fiat will mean decent yields on that side of the trade. Ultimately these decentralized DeFi protocols are cutting vast layers of middle men where traditional banks and monopoly players take huge cuts of the overall economic value and velocity[1]. Instead of NASDAQ or Goldman Sachs or whoever to take a tiny cut of transaction fees from financial transactions, you do by supplying liquidity to…

> Let's say a fresh fork happens causing a chain split. Both chains have 50% market cap and hashrate. How do you measure "popularity" at this point so that your prediction of "the most popular fork wins" is actually helpful? ETH forking away from ETC was a very controversial topic at the time. You have to go forward into the future to evaluate the claim. The claim is that if you look at things... let's say 5 years later, one of those is going to be dead. If you find that one of the forks still has, for example, 20% as much hash power as the other, you have disproved the claim. So it's not a tautology. Another way to formulate that part of the claim would be to say something like "the half-life of a fork is only X amount of time, so it's a very bad idea to try to pull one off". > There are still Bitcoin Qt 0.8.x nodes on the network which are ~10 years old. There's no way they're fully compatible. At the very least, consider that block that generated 184 billion bitcoins and had to immediately get the code changed. And look at all of these: https://blog.bitmex.com/bitcoins-consensus-forks/

Crypto currencies don’t provide anonymity. It’s pretty easy to make bitcoin transactions anonymous. 1. Wasabi Wallet runs over Tor and has built-in support for CoinJoins: https://wasabiwallet.io 2. Samourai Wallet has Whirlpool, another mixing technology, among other security features: https://www.samouraiwallet.com/features 3. You can skip the usual exchanges and use Bisq for peer-to-peer trading over Tor, including selling BTC for fiat: https://bisq.network 4. Lightning network (a layer 2 network on top of Bitcoin) has exploded in popularity; it’s also a major privacy win for transactions: https://medium.com/breez-technology/lightning-network-routing-privacy-… Most wallets nowadays don’t let you reuse addresses; even with plain vanilla Bitcoin transactions, this makes it much more difficult to link an identity with a Bitcoin transaction. And this is before Taproot and Schnorr signatures are added to the Bitcoin protocol in the not too distant future: https://blog.bitmex.com/the-schnorr-signature-taproot-softfork-proposa… There's more but the point should be clear: it’s actually fairly easy to dramatically increase the anonymity of bitcoin transactions.