
Fidelity CEO Abigail Johnson says the company is mining cryptocurrencies - KasianFranks
https://techcrunch.com/2017/09/28/fidelity-ceo-abigail-johnson-says-the-company-is-mining-cryptocurrencies/
======
almostApatriot1
> Johnson said that the company had made several venture investments in
> bitcoin-related businesses and that the company was looking at applications
> of blockchain technologies alongside several leading universities.

Every crypto article makes the same vague claims about the potential of non-
specific blockchain technology. I'm surprised there was no mention of
replacing Visa in this one as well.

~~~
ballenf
I got removed from a project because I was raining on everyone's blockchain
fantasy. Later they begrudgingly admitted that blockchain wasn't going to
solve the hard interoperability problem we were facing (bog standard need to
pull & analyze data from multiple incompatible data stores held by multiple
independent parties).

I can forgive all the business guys for that thinking given articles like
these, but the tech guys who were fanning the fires of that fantasy and
telling me I didn't understand blockchain....

I got the distinct impression that there is a growing cottage industry of tech
consultants and outsource companies that realize that if they can get their
clients to "do it on the blockchain" they will be able to bill 10x as much for
a project that has a current very good solution (and relatively fast to
implement solution). And for which blockchain won't be a benefit. But the
client may very well be able to get more VC money, so it's starting to turn
blockchain 'skeptics' into martyrs.

And the most frustrating thing is that the innovation in Satoshi's paper
(bringing together in a unique way prior known solutions) is really exciting
and there are very good uses for blockchain. The international shipping
companies using blockchain to track shipping container provenance strikes me
as really, really perfect.

The bad uses of blockchain is going to kill the tech before it's had time to
mature naturally and find its place.

~~~
slyfocks
Thank you for being a voice of reason in a domain that has increasingly become
overrun by frauds and zealots.

As someone who has been involved in blockchain research since 2011, it’s sad
to see a promising technology (in limited use cases) turn into a buzzword
thrown around by the many speculators and scam artists peddling vaporware and
pumping crypto prices.

~~~
alien_at_work
>it’s sad to see a promising technology (in limited use cases) turn into a
buzzword

The same thing happened to REST. Every "web interface" is supposedly REST now,
yet the client and server are even more coupled than they would have been if
the interface were implemented in SOAP!

~~~
lr4444lr
And here I thought I was the lone voice in the wilderness. From Roy Fielding's
original paper:

 _The client-stateless-server style derives from client-server with the
additional constraint that no session state is allowed on the server
component. Each request from client to server must contain all of the
information necessary to understand the request, and cannot take advantage of
any stored context on the server. Session state is kept entirely on the
client_

I've heard enough verbal gymnastics to fill a book trying to excuse how modern
web apps aren't violating this condition.

~~~
alien_at_work
Not alone. I find the problem most people have is no suitable example they can
think of. The examples we have online are "starbucks as REST", etc. A better
example is the greatest REST client ever made: the web browser. When Facebook
updates their "app", I don't even need to restart my "client" to get the
updated features. These days I start all "REST: you're doing it wrong"
conversations with this.

------
nkingsy
I like that the post mentions she's mined 200,000 Satoshis. Is this some kind
of Bitcoin Shibboleth? I had to google it. It's about $8.

~~~
zaptheimpaler
1 Satoshi = 0.00000001 BTC (10^-8 BTC)

It represents the smallest fraction of 1 bitcoin you can use as an amount in a
transaction, so they are the smallest (indivisible) units.

~~~
zghst
Very interesting name for a decimal. What an intricate community

~~~
derefr
It's the name of the creator of Bitcoin,
[https://en.wikipedia.org/wiki/Satoshi_Nakamoto](https://en.wikipedia.org/wiki/Satoshi_Nakamoto).
You can imagine them as little pennies with Satoshi's head imprinted on them,
if you like.

And it's not really a decimal; it's more properly "1 bitcoin" in the technical
sense. 1BTC was later defined to be equal to 10^8 Satoshis because that seemed
like a useful amount of money to track exchange rates for (though now it's
about 10^4 too high.)

~~~
lstyls
"Name" is maybe not quite right, "Satoshi Nakomoto" is the creator's
pseudonym. The actual author of the bitcoin whitepaper is unknown and the
subject of much speculation.

I'm sure OP knows this, I'm just being pedantic.

~~~
knocte
Strictly speaking, it's not known if the name is a pseudonym either. There are
people in the world that have that name and they haven't denied being the
creator.

~~~
lstyls
If it is said author's name, why have they not publicly claimed to be this
Satoshi? Name one such individual who has credibly been considered to have
invented bitcoin.

~~~
phaemon
You want the name of the Satoshi Nakomoto who is most likely to be _the_
Satoshi Nakomoto? The name? That's what you want? Are you sure you've thought
this through?

------
dankohn1
I cannot imagine a headline that would make me more interested in investing
with Vanguard.

~~~
dmoy
0.005% lower expense ratios is what shifted my stuff from Fidelity to
vanguard. Idk how much exposure they're putting into crypto currency based on
this.

~~~
dankohn1
Come for the lower expense ratios, stay for the focus on running low cost
indexes mutual funds, as opposed to experimenting with cryptocurrencies.

~~~
meowface
What's wrong with experimenting with cryptocurrencies? It's not like they're
taking away resources from their main business to blow on bitcoins.

(Though Vanguard is probably still a better choice regardless.)

~~~
dankohn1
I want the CEO of my mutual fund company to be focused on how to index better,
not on cryptocurrencies.

~~~
atomical
Why not just buy ETFs?

~~~
dankohn1
Vanguard sells the very best ETFs (that are simply additional share classes of
their mutual funds) exactly because they are so focused on indexing.

~~~
astura
Schwab has the lowest cost index funds ETFs:
[https://www.schwab.com/public/schwab/investing/accounts_prod...](https://www.schwab.com/public/schwab/investing/accounts_products/schwab_index_funds_etfs)

Additionally, Fidelity offers index funds at a lower cost than Vanguard:
[https://www.fidelity.com/mutual-funds/investing-
ideas/index-...](https://www.fidelity.com/mutual-funds/investing-ideas/index-
funds)

~~~
toomuchtodo
Vanguard is a mutual company. Whatever savings that they can extract from
efficiency gains they pass along to their customer base.

Also, Fidelity's index funds are loss leaders to retain funds that were
flowing out to Vanguard.

~~~
srtjstjsj
> Vanguard is a mutual company. Whatever savings that they can extract from
> efficiency gains they pass along to their customer base.

That's irrelevant if they those gains are less than a competitor's discounts.

> Also, Fidelity's index funds are loss leaders to retain funds that were
> flowing out to Vanguard.

So?

~~~
desdiv
>So?

Loss leaders are by their nature unprofitable and thus will go away as soon as
they're not required.

Suppose if Vanguard disappears, then Fidelity will hike their rates up.

On the other hand, if Fidelity disappears, Vanguard won't hike their rates up
because they won't bite the hand that feeds them since _it 's their own hand_.

~~~
dx034
You can trade daily, why not keep the Fidelity ETF until they hike prices?

~~~
jsoc815
[https://www.bloomberg.com/news/features/2016-04-20/the-
wine-...](https://www.bloomberg.com/news/features/2016-04-20/the-wine-mogul-
vs-fidelity)

------
watertom
I can't wait until large firms, or very rich people start throwing a lot of
money at mining and start co-opting cryptocurrencies

~~~
kobeya
You think they aren't? Mining is a multi billion dollar industry.

~~~
cm2187
The term "industry" suggests they produce something, which in the case of
bitcoin mining is questionable.

~~~
keymone
they produce security of distributed decentralized database and continued
operation of payment platform on top of it.

~~~
nosuchthing
There's nothing really produced as there's no product, the software is running
a service.

Without the service, there is nothing.

~~~
omarchowdhury
Mining by definition produces cryptocurrencies, which is a 'product'.

~~~
kobeya
Not after subsidy has played out. That's a temporary state of affairs.

Mining provides economic cost of reorg as a product, something people in the
bitcoin space call "security."

~~~
keymone
and the payment system. you know, the actual thing that allows people to
transfer a unit of value?

------
iancarroll
How did this article just get written? Consensus happened in May...

------
QAPereo
Sure, if you have more of a kitty than many countries to play with, an army of
lawyers and an IT department... have fun.

~~~
pfisch
I have all the computers in our office mining crypto when we leave for the
day. It is pretty easy to setup.

~~~
Blackthorn
Whoo boy. If you aren't the owner, expect them to fire you and replace your
paycheck with the tiny bit that you managed to mine.

~~~
reustle
You're assuming he doesn't have permission, or that the coins aren't going to
the company itself.

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notadoc
It sure feels like "blockchain" and "cryptocurrency" are the new misunderstood
but mandatory usage buzzwords of the day.

------
2close4comfort
So someone at Fidelity watched Mr Robot I think they missed some parts but
lets see how this plays out...(starts thinking about moving investments away
from Fidelity).

------
Abtin88
Dream of satoshi is dead now

~~~
paulie_a
How so?

~~~
roarktoohey
[https://blockchain.info/pools](https://blockchain.info/pools)

It’s not as decentralized as he/they hoped??

------
atomical
There will probably be more bad news from China this year. It seems very risky
to do what they are doing.

~~~
jliptzin
Maybe they're following Cuban's advice which is to invest heavily into
anything China bans.

------
zghst
It would be highly irresponsible not to do so

~~~
nosuchthing
Why?

Artificial and delusional scarcity of software derived database entries, of
which a multitude of newer alternative service networks are being created
every day?

------
proofofstake
ROI of creating an investment portfolio 1 year ago, and selling today:

\- All Bitcoin: ~500%

\- Mix of top market: ~2800%

\- All Strat: ~13500%

Meanwhile, stock investors call 12% a good year.

~~~
partiallypro
Now compare total market capitalization of equity markets to Bitcoin. I doubt
you could liquidate millions of dollars of bitcoin in a day and not make the
market plummet. You can do that in the last 30 minutes of the stock trading
day with no very little price fluctuation.

There are equities that are up triple digits, including Nvidia...who is
realistically the biggest winner in crypto mining.

~~~
mrb
« _I doubt you could liquidate millions of dollars of bitcoin in a day and not
make the market plummet._ »

Wrong. 1.5+ BILLION dollars' worth of bitcoins are sold and bought in
aggregate daily on 100+ exchanges:
[https://coinmarketcap.com/currencies/bitcoin/#markets](https://coinmarketcap.com/currencies/bitcoin/#markets)

~~~
gnaritas
That's a very very small amount, real currency markets do trillions a day,
bitcoin is the size of a large company. He's totally right, that's a small
liquid market when compared to the real markets. If you tried to dump 10
million in bitcoin all at once, there's a good chance you're going to crash
the market; 10 million wouldn't even move the price in the EURUSD.

~~~
mrb
« _That 's a very very small amount, real currency markets do trillions a
day_»

It is. But that's not what partiallypro and I were discussing. We argued about
whether selling "millions" would crash BTC or not.

« _He 's totally right_»

Did you even read the link I posted? Even if you look at only the BTC/USD
pair, $10M represents merely ~1% of the volume sold DAILY on the top 6
exchanges (~$800M). You would probably need to sell an _order of magnitude_
more, so $100M, in a single day, to start affecting the markets significantly.

~~~
gnaritas
I think you're confusing daily volume with volume available at any one time.
Read what I said, dump 10 mil at once. Just because you can trade 10 million
in a day doesn't mean the market can handle a 10 million dollar order in one
shot without massive slippage due to lack of liquidity. You could drop a 50
million dollar order on the EURUSD and you might maybe move the market 1
point, but a mere 10 million would instantly cause a large swing of perhaps
10% in the bitcoin market, that's why it's so volatile, it's a small market.

It's so small you have individual holders the community now calls whales who
can individually manipulate the price with buy and sell walls; no individual
can do anything remotely like that in the FX market. One because they don't
have enough money, and two because such market manipulation is illegal.

You'd need to spread your purchase or sale out over the day to avoid massive
slippage for an order that big because there just isn't enough liquidity to
absorb it without the moving the price. 10 mill is about 2500 coins, go look
at the order book on any exchange, a purchase that large is going to massively
move the price, looks to be possibly 300-400 dollars you'd move the market
with that one order. 50 million would certainly crash/bubble the market.

~~~
mrb
I make a living trading BTC. I know the difference.

The OP mentioned selling in a day, not at once: « _I doubt you could liquidate
millions of dollars of bitcoin IN A DAY..._ » This is what I commented on.

You changed the topic and started talking about selling all at once, which
would of course eat a bunch of bids. However even doing this wouldn't "crash
the market." The order books are deeper than you think. It's hard to find
examples, because it's plain dumb to market-sell this much in one order. But I
found a ~1150 BTC sell on Bitstamp around 3pm on September 13 and it barely
moved the price:
[https://bitcoincharts.com/charts/bitstampUSD#rg5zig1-minzczs...](https://bitcoincharts.com/charts/bitstampUSD#rg5zig1-minzczsg2017-09-13zeg2017-09-14ztgSzm1g10zm2g25zv)

It would eat even lower bids on exchanges with less volume/thinner books, but
still wouldn't crash the market. For example some idiot sold 1200 BTC in two
market-sells of 600 BTC each, 30min apart yesterday on Gemini; and although it
ate all the bids from $4100 to $3400, twice!, it didn't "crash the market".
Other exchanges didn't react. Subsequent trades resumed exactly where the
price was before ($4100).

~~~
gnaritas
OK, little more liquid than I expected, I just glanced at the order books on
bitcoinwisdom. What happened on Gemini looks more what I'd expect, a deep and
fast crash as all the liquidity was eaten.

