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People's Expensive NFTs Keep Vanishing. This Is Why
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Mar 30, 2021 14:57
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quote:Was it a glitch? A hack? Did Kuennen perhaps misunderstand how, exactly, NFTs work and how they’re stored? You can’t blame him let me stop you right there...
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Mar 30, 2021 14:59
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I hope everyone's ready for another round of "see Tether's just fine, why are you complaining," since they just released a new agreed-upon procedures report that doesn't actually say what everyone claims it says. The reporting on this from the usual suspects is already dogshit. https://twitter.com/TheBlock__/status/1376867078511153154 No, it doesn't actually show that. Tether is going to try and sell this like it was an audit, and it was very much not an audit. An "agreed-upon procedures" engagement like this is what it sounds like - the accountants (Moore) agree to perform some specific procedures for the client (Tether), and that's it, the end. In this case, those procedures were looking at what Tether claimed were it's assets on Feb. 28th, looking at what Tether claimed were it's liabilities on Feb 28th, and saying "yes the assets number is bigger than the liabilities number." Here is a partial list of audit procedures that Moore did not do, because they were not actually hired to do an audit:
Related to that last point, one thing in the report really jumped out at me: quote:Management’s accounting policy is to value assets and liabilities at historic cost plus any accrued interest and less any expected credit losses, or otherwise the redemption value where applicable. The realisable value of these assets and liabilities could be materially different if any key custodian or counterparty incurs credit losses or substantial illiquidity. The paragraph appears in the "emphasis of matter" section in the report, which implies that Moore felt that readers of the report need to know this fact in particular or else they might misinterpret their conclusions. And of course they would, because the policy described above is ridiculous, that's not how this is supposed to work! That paragraph is Moore making it clear that "yes, we compared their reported assets and reported liabilities at Feb 28th, and the balance of assets exceeded the balance of liabilities, but we realized they are not valuing their assets correctly and we need to tell you that so that we can't get sued."
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Mar 30, 2021 15:13
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Blotto_Otter posted:I hope everyone's ready for another round of "see Tether's just fine, why are you complaining," since they just released a new agreed-upon procedures report that doesn't actually say what everyone claims it says. The reporting on this from the usual suspects is already dogshit. Have you considered printing more tethers will solve all the evil in the world
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Mar 30, 2021 15:13
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I cannot loving wait for this bubble to pop.
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Mar 30, 2021 15:20
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i don't know, i for one am definitely feeling very assured by this assurance report
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Mar 30, 2021 15:32
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Shame Boy posted:i don't know, i for one am definitely feeling very assured by this assurance report I’m assured now that SB is assured. 🤩
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Mar 30, 2021 15:46
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EorayMel posted:Have you considered printing more tethers will solve all the evil in the world seriously though that is the only answer available to Tether, history is full of examples that all say the same thing: when you get locked into serious, big-boy accounting fraud, the only way forward is up. the only way to keep past fraud from coming out is to paper it over with new fraud, so the perpetrators always wind up in a vicious cycle where they constantly have to go bigger and bigger in order to delay the inevitable collapse. it's never a question of if, it's always a question of when, and here's where I drop my periodic reminder that Madoff Investment Securities was founded in 1960 and ol' Bernard was not arrested until 2008. anyway, in fairness to the Tether folks, what they're doing is clearly more lucrative than the things I do with my life, such as "watch the light go out of someone's eyes as I patiently try to explain accounting and auditing standards"
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Mar 30, 2021 15:56
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Blotto_Otter posted:
this is comedy tethers anything else in the non-audit that jumped out at you? I have enough notes on this to turn into a short blog post as is ...
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Mar 30, 2021 16:01
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ultrafilter posted:I cannot loving wait for this bubble to pop. there's enough lazy legacy money going in after bitcoin that the bubble very well might not pop before crypto exchanges are banned by countries fed up by ransomware
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Mar 30, 2021 16:27
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gotta love the embarrassing-as-gently caress names and descriptions of the art these chucklefucks are "buying": an elon musk themed "moon ticket" a piece called "big boy pants" Blotto_Otter posted:anyway, in fairness to the Tether folks, what they're doing is clearly more lucrative than the things I do with my life, such as "watch the light go out of someone's eyes as I patiently try to explain accounting and auditing standards" thank you for your service. I wasn't going to read that, but I found your breakdown interesting
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Mar 30, 2021 16:37
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tether slides a wrinkled and stained sheet of paper over to the accountant. he looks down, on it are two columns labeled "liabilys" and "asets". In the first column was written "many" and in the second was "more". at the very bottom was a place for him to sign. sighing, he pulled out his pen
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Mar 30, 2021 16:39
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quote:Phillipe Christodoulou wanted to check his bitcoin balance last month, so he searched the App Store on his iPhone for “Trezor,” the maker of a small hardware device he uses to store his cryptocurrency. Up popped the company’s padlock logo set against a bright green background. The app was rated close to five stars. He downloaded it and typed in his credentials.
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Mar 30, 2021 16:59
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I thought preventing that was the entire reason they got away with charging 30% and gatekeeping app installations. Makes sense to me from the perspective that the app store is marketed as the safe place to get apps, to the exclusion of all others.
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Mar 30, 2021 17:01
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xtal posted:I thought preventing that was the entire reason they got away with charging 30% and gatekeeping app installations. Makes sense to me from the perspective that the app store is marketed as the safe place to get apps, to the exclusion of all others. what could they possibly do to prevent this? they can't know that the credentials will be used maliciously at some point in the future.
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Mar 30, 2021 17:16
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Chalks posted:what could they possibly do to prevent this? they can't know that the credentials will be used maliciously at some point in the future. pre:Does it involve crypto? --- YES -----> Deny
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Continue usual flowchart
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Mar 30, 2021 17:41
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gschmidl posted:
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Mar 30, 2021 17:49
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divabot posted:this is comedy tethers After rereading it, one other thing that sticks out is their use of "consolidated", which is not unusual in an accounting context, but the way it's used here invites a lot of questions that a financial statement audit would answer but that this report does not. Their use here of "consolidated reserve report" and "consolidated assets/liabilities" implies that, for the purposes of this report, they have taken the individual financial statements of the various legal entities that make up the "the Tether Holding Limited group" of companies, and combined them together into one set of "consolidated" financial statements. That is not unusual. What is unusual is that we don't really know what entities are in that group, how they relate to each other, and whether or not transactions between them have been properly accounted for (and eliminated/canceled out, when necessary). In an actual set of audited consolidated financial statements, they would have to disclose what companies are included in the consolidated financials as well as what companies are related to Tether that are not included in the consolidated financials. The auditors would also have to test the consolidating entries that go into making a set of consolidated financials, in order to make sure that they have not inappropriately grossed up any balances when smashing the companies' financials together. None of that testing was done here, and none of those disclosures are made here outside of a vague (and unvalidated) comment that it "includes financial information for and in respect of the Company and its wholly-owned subsidiaries in the British Virgin Islands and Hong Kong." We don't really know what companies are getting included here, and we also don't know if any companies are not getting included here when they should be. This is hardly the most glaring problem here, it's just item #37 in a growing list of questions that would (theoretically) be answered by a real honest-to-god financial statement audit, which is exactly why they don't want an audit. edit: I also just read Bennett Tomlin's post on this and I think he's underselling the multiple ways in which their "accounting policies" are weird and alarming:
Blotto_Otter fucked around with this message at 19:01 on Mar 30, 2021 |
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Mar 30, 2021 18:08
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chipotle no: https://burritosorbitcoin.com/comingsoon
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Mar 30, 2021 18:13
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chipotle YES
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Mar 30, 2021 18:22
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something cracked in my brain this morning, and I thirst financial ruin upon these fools vote republican. invest in cryptocurrency. buy nfts. burn. burn yourselves. burn yourselves, the lot of you!
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Mar 30, 2021 18:23
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remember that time tether literally said they fired their latest auditor because they wanted to be "too thorough", and that firing them was a good thing because this way they can hire an auditor that could get the audit done faster so they can show you the result sooner because that's hands-down the funniest single thing tether has done imo and i love it
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Mar 30, 2021 18:31
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Midjack posted:chipotle no: lmao quote:
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Mar 30, 2021 18:33
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Boxturret posted:tether slides a wrinkled and stained sheet of paper over to the accountant. he looks down, on it are two columns labeled "liabilys" and "asets". In the first column was written "many" and in the second was "more". at the very bottom was a place for him to sign. sighing, he pulled out his pen "I'm Roger Ver-
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Mar 30, 2021 18:50
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Shame Boy posted:remember that time tether literally said they fired their latest auditor because they wanted to be "too thorough", and that firing them was a good thing because this way they can hire an auditor that could get the audit done faster so they can show you the result sooner I think about that all the time, but I'm a believer that it was actually the other way around and that Friedman fired them as a client once they realized Tether was either yanking them around or too stupid to realize they really, really didn't want to get audited, and I think that's even funnier (it was small fries compared to Tether, but I've only been involved in one audit that we just up and quit because the client was flat-out unauditable, after it became clear that the person in charge of the books was too stupid to realize that he really didn't want us asking the kind of questions we were about to start asking)
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Mar 30, 2021 18:59
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Isn't that a situation where you should be asking those questions?
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Mar 30, 2021 19:00
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ultrafilter posted:Isn't that a situation where you should be asking those questions? Not when the person you're about to start questioning is also the person who hired you to ask the questions and who is supposed to sign the checks to pay you after you ask the questions. Public accounting is a weird profession, and while financial statement audits are a useful and necessary tool and most of them are fairly reliable, one should always keep in mind that there is an inescapable and fundamental tension between maintaining independence and objectivity about the people you're auditing while those same people are writing the checks to pay you for your audit. When the conflict between those two becomes insurmountable, the auditor doesn't have much recourse except to quit. But since quitting an audit means you don't get paid, that means that auditors do not quit nearly as often as they should, and it's pretty remarkable when they do quit. (Which is why no legit accounting firm would touch Tether for years after Friedman dumped them. Auditors see poo poo like that and they go running in the opposite direction) (edit: this is also why you can occasionally find me in the Tesla thread speculating about how much Tums the PwC team assigned to Tesla must be chewing through each quarter)
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Mar 30, 2021 19:11
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Blotto_Otter posted:After rereading it, I posted my quick writeup (crediting you for spotting that para): https://davidgerard.co.uk/blockchain/2021/03/30/tether-produces-a-new-attestation-it-says-nothing-useful/ there's a comment talking about that para and other ways to interpret it, fwiw i mean, the report is so obviously useless that trying to extract actual insight into what the arsing gently caress Tether is up to from it is probably futile
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Mar 30, 2021 19:18
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divabot posted:i mean, the report is so obviously useless that trying to extract actual insight into what the arsing gently caress Tether is up to from it is probably futile  and yep it's the same poo poo they've been pulling for years, put out a bullshit report full of loopholes but with just enough of a veneer of legitimacy that the PR machine can call it a win while the critics have to spend time coming up with a nuanced argument for why it's bullshit.
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Mar 30, 2021 19:35
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Alan Smithee posted:"I'm Roger Ver- Welcome to Jackass! *sells explosives on Ebay*
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Mar 30, 2021 21:34
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orange juche posted:Welcome to Jackass! *sells explosives on Ebay* *mails them via the usps*
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Mar 30, 2021 22:38
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So the paypal bitcoin thing is just bitcoin denominated bitcoin tokens right? also lol. NFTs are the dumbest thing I have seen out of the tech sector in a long time Beelzebufo fucked around with this message at 01:56 on Mar 31, 2021 |
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Mar 31, 2021 01:48
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Beelzebufo posted:also lol. NFTs are the dumbest thing I have seen out of the tech sector in a long time the sad things that you have a lot of digital artists who are desperate for some kind of thing which allows them to mint the same kind of numbered prints, or whatever, that physical artists can. quite a few of them are overlooking the bullshit associated with NFTs because they are desperate for anything that might offer that and NFTs say they do so. i had to talk down some artists i know down from that ledge. sadly they are a massive scam and a lot of people, both on the artist and on the punter side, are going to get hosed.
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Mar 31, 2021 02:23
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Munin posted:the sad things that you have a lot of digital artists who are desperate for some kind of thing which allows them to mint the same kind of numbered prints, or whatever, that physical artists can. quite a few of them are overlooking the bullshit associated with NFTs because they are desperate for anything that might offer that and NFTs say they do so. i had to talk down some artists i know down from that ledge. Even if they just encoded the image/mp3 or whatever directly into the blockchain, wiht like a metadata counter for the number of prints or something, it would still be stupid, but it would be fundamentally less stupid than a loving url pointer. It's amazing the NFTs are like the dumbest possible iteration of an already dumb idea. E: It's not really clear to me based on that article, but is the artist the one who hosts the file? Or is the exchange hosting it? Because I would love to have a digital art piece that returns a 404 error one day because the artist I bought it from forgot to pay his amazon hosting fees one month and the thing got deleted lol. Beelzebufo fucked around with this message at 02:30 on Mar 31, 2021 |
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Mar 31, 2021 02:27
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it depends on the issuing "authority". in most of the ones I've bothereed to look at the token contains a uri, the uri is either hosted by the site selling the nft or on ipfs. the content pointed to by the uri is some attestation about the nft, including a uri for the content. the second uri usually seems to be wherever the first one is. its worth pointing out that you *could* hash/fingerprint the content and then sign the hash along with the address that "owns" the content and that would accomplish most of what people seem to think nfts are already doing and you wouldn't even need any blockchain horseshit to do it. but then you wouldn't be doing most of what nfts actually are doing, which is ripping people off, which seems to be the actual main design goal. as it is the companies selling the nfts have a massive vested interest in doing it this way, as makes the value of all the nfts they've issued contingent on their domain registration.
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Mar 31, 2021 03:06
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why the gently caress aren’t they at least uploading the jpgs to archive.org rather than https://www.randoblocknfart.scam
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Mar 31, 2021 05:20
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that might stop them from being able to sell someone else's thing they found though
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Mar 31, 2021 05:29
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Beelzebufo posted:So the paypal bitcoin thing is just bitcoin denominated bitcoin tokens right? here's what it is: paypal now supports cryptocurrency!!!* *** **** ***** ****** * only buying** and selling** ** only through paypal *** transferring cryptocurrency into your account is not supported at this time **** transferring cryptocurrency out of your account is not supported at this time ***** using cryptocurrency for paypal payments is not supported at this time ****** using cryptocurrency as some kind of currency is not supported at this time
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Mar 31, 2021 06:11
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Beelzebufo posted:Even if they just encoded the image/mp3 or whatever directly into the blockchain, wiht like a metadata counter for the number of prints or something, it would still be stupid, but it would be fundamentally less stupid than a loving url pointer. It's amazing the NFTs are like the dumbest possible iteration of an already dumb idea. The cost of an Ethereum transaction scales with the amount of data it outputs (which gets permanently stored into the block) as a disincentive to bloat. At current rates, it's about $117 per KB output. So you'd literally have to pay thousands to store an actual JPEG in the blockchain. (e: Specifically, it'd be $2300 to store hello.jpg, and that's an old rear end 360p image. A 4K background image would be $283,000, except that you couldn't actually do that, because blocks are limited to a maximum of 12.5M gas, meaning there's an upper limit of about 19KB per block.) That's why this whole loving thing is basically a URL forwarder but with the added step of paying a smarmy techbro to perform a coal-burning ritual to bless it. As for hosting: The standard practice is to make an NFT point to a IPFS URL, which is a sort of Bittorrent-Lite -- as long as someone out there is hosting it, it'll exist at that URL. Of course, there's already situations where the last host has disappeared for a URL, and the NFT is indeed now a 404. ullerrm fucked around with this message at 20:24 on Mar 31, 2021 |
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Mar 31, 2021 06:23
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ullerrm posted:As for hosting: The standard practice is to make an NFT point to a IPFS URL, which is a sort of Bittorrent-Lite -- as long as someone out there is hosting it, it'll exist at that URL. Of course, there's already situations where the last host has disappeared for a URL, and the NFT is indeed now a 404. I expect that as demand on IPFS skyrockets as these scams go to the moon the limited nodes that exist are going to see the demand on their resources skyrocket causing more and more to drop out. The scammers wouldn't do something like sacrificing some of their margins to keep the system standing because they neither really know or care about how their poo poo actually function as all they care about is making a quick buck.
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Mar 31, 2021 07:12
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