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FTX: Building an Arbitrage Infrastructure for Traders
Ash Bennington, senior crypto editor for Real Vision, welcomes Sam Bankman-Fried, CEO of FTX, to discuss Alameda Research, the founding of FTX, the Serum Project, and the future of crypto and blockchain technologies. In 2017, Bankman-Fried saw how market makers were not that active—the sector was going wild with very little liquidity, and few people were doing arbitrage market making. In other words, a large purchase of Bitcoin on one exchange would cause the price to go up, yet the price increase would not be reflected on other exchanges. The lack of consistent price changes across exchanges opened the door for arbitrage, which resulted in users trading at larger volumes than liquidity providers could handle. In order to solve this issue and allow arbitrage to be executed at more sophisticated levels, Bankman-Fried started FTX. Filmed May 24th, 2021. Key Learnings: Theoretically, all Bitcoin should be trading at the about the same price, and market makers, liquidity providers, and arbitragers are typically the systems that keep those prices in line. By doing arbitrages, markets become more efficient by providing liquidity to wherever demand is coming from. Back in 2017, not only were there issues dealing with banks, but also with exchanges that were not professionally made—these issues often led to the point where people, not programs, were managing liquidations, which could ultimately lead to millions of dollars a day in "bleed". As such, Bankman-Fried believed that there had to be a better way for trades to be conducted and created FTX as a platform designed by traders for traders.
SKALE Labs: Augmenting Ethereum for a Scaling Solution
Santiago Velez, entrepreneur and digital asset investor for Block Digital Corporation & AD, Inc., welcomes Jack O'Holleran, co-founder and CEO of SKALE Labs, for a wide-ranging conversation on risk structures, governance, regulation, and the ecosystem today. In 2017, O'Holleran became excited about Web 3, particularly decentralized ownership and democratized business models. For Web 3, end users may be using it similarly as they would with Web 2; however, due to Web 3's core technology, the business model, profit, and sharing properties are all different. While exciting, O'Holleran quickly realized that it was not scalable. He concluded that, rather than build hardware and applications, he could leverage his strengths in building middleware, infrastructure, and software to drive applications and bring a service to solve scalability problems in the Web 3 space. Filmed on May 21, 2021. Key Learnings: Particularly with Ethereum, scalability comes with limitations such as transaction throughput, fees, and cost—it may cost hundreds of dollars to execute a smart contract. Regardless of whether a protocol is POS or POW, the constraints are due to the blockchain only being a single layer 1 chain. The SKALE team has been able to achieve a solution that effectively allows for transactions to run on "individual lanes on a highway" rather than all transactions on a singular lane or chain. Ultimately, what SKALE is trying to accomplish is for its network and Ethereum's to augment and support each other.
Hedera Hashgraph: Solving for Performance & Security at Scale
Ash Bennington, senior crypto editor for Real Vision, welcomes Mance Harmon, CEO of Hedera Hashgraph, to discuss consensus algorithms and the creation of Hedera Hashgraph. Starting in 2012, Harmon and his team were working to solve a distributed consensus math problem, specifically how to create a consensus algorithm that maximized both performance and security simultaneously. He states that this has been a decades old problem, and while it is clear already how to have the best security via asynchronous byzantine fault tolerance, it has always come at the expense of resource requirements—bandwidth or scaling issues. This was solved in 2015 with the creation of Hashgraph, and with its algorithm, it has led to a public distributed ledger with scalable and maximized performance and security properties. Filmed May 18th, 2021. Key Learnings: It's possible to create a consensus algorithm that makes it possible for the participants within a network to vote on transactions—however, as the number of transactions increases, the voting and, by extension, bandwidth required go up exponentially. What Hashgraph has innovated on is that by submitting just 2 hashes of information, that being the last transactions sent and received, the network can chain them into a graph and conceptually represent who knew what and when. When paired with a consensus algorithm, anyone who receives that data can calculate what the consensus would be without having to vote or ask the question, thus cutting out the middleman or bandwidth requirement and resulting in the creation of virtual voting.


Featured Videos

Ampleforth: Ideal Reserve Currency
Real Vision senior editor Ash Bennington is joined by Evan Kuo, founder of Ampleforth, to discuss how Ampleforth was engineered specifically to satisfy characteristics of the ideal reserve currency. By working with Stanford's Hoover Institute for several years, Kuo and his team have been refining what it means to be a "good" reserve currency. A key innovation lies in their maneuver to substitute price volatility with supply volatility. Kuo's goal is to create the ultimate unit of account, resistant to demand shocks typically seen in business cycle contractions. Filmed on June 17, 2021.
Real VisionJune 23, 2021
Gold and The Dollar in the New Roaring 20s
As economies around the world reopen, Axel Merk, president & CIO of Merk Investments, shares his insights on central bank monetary policy, currencies, and equity valuations. Merk argues that the dollar will weaken as global economies attempt to reflate by borrowing dollars and investing domestically. He shares his framework for thinking about gold and inflation in response to Chair Powell's meeting and the FED dot plot. He believes that a market correction is possible and that investors should use current market strength to prepare themselves and reevaluate their risk appetite. Filmed on June 21, 2021.
Real VisionJune 22, 2021
Bitcoin Crashes as Stocks Flirt with All-Time Highs
Real Vision senior editor Ash Bennington welcomes Tommy Thornton of Hedge Fund Telemetry and to the Daily Briefing to discuss Bitcoin’s crash, FED Chair Powell’s testimony, and market sentiment as stocks rebound. The pair will cover potential explanations for Bitcoin’s reversal as well as implications for companies in the space such as Coinbase. Additionally, they will dive into both commodity and stock market reactions to FED Chair Powell’s testimony on the state of the economy. Special Festival of Learning offer - 10% off with the code DAILYBRIEFING.
Jim Bianco and Jimmy Song: Bitcoin Versus DeFi
Jim Bianco, president and founder of Bianco Research LLC., and Jimmy Song, founder of Programming Blockchain Inc., face off in this heated discussion on Bitcoin, DeFi, which system is superior, and whether DeFi is truly "decentralized". Bianco makes the case for decentralized finance and discusses the many ways which it can improve upon our traditional finance systems. Song challenges the notion that DeFi is "decentralized" and explains why Bitcoin is the only true possessor of long term scarcity and value. Filmed June 17, 2021.

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