Crypto Was Always Smoke and Mirrors
https://www.theatlantic.com/technology/archive/2022/12/cryptocurrency-ftx-collapse-dirty-bubble-media/672440/
The vast majority of people who got involved in this have no interest related to the technology or in the political or ideological aspects of crypto. They just see an opportunity to get rich. And a lot of those people end up absorbing and parroting some of the crypto ideals back to you, but they don’t really care to understand what’s going on. It’s just their excuse for what they’ve already done, which is gamble on something they thought was going to make them wealthy.
https://www.theatlantic.com/technology/archive/2022/12/cryptocurrency-ftx-collapse-dirty-bubble-media/672440/
The vast majority of people who got involved in this have no interest related to the technology or in the political or ideological aspects of crypto. They just see an opportunity to get rich. And a lot of those people end up absorbing and parroting some of the crypto ideals back to you, but they don’t really care to understand what’s going on. It’s just their excuse for what they’ve already done, which is gamble on something they thought was going to make them wealthy.
Crypto was meant to solve financial corruption. The
FTX scandal shows it’s got worse
https://www.theguardian.com/commentisfree/2022/dec/15/crypto-financial-and-corruption-making-it-worse-ftx
David A Banks:
Like any radical, a true believer in crypto could argue that FTX is what happens when the revolutionary DeFi program is not fully implemented. But here again crypto bros are hoisted by their own trustless petard. The reality is that the 21st-century crypto industry – automated or not – must follow the same capitalist market physics that were endemic to 20th-century energy markets, or 19th-century London banks: ruthless competition winnows an industry down to a few key players and then, as Marx wrote in 1847, there comes a phase “when everybody is seized with a sort of craze for making profit without producing”.
And so it should come as no surprise that, as the New York Times put it, the crypto industry quickly “started assuming some of the same characteristics as the Wall Street institutions that it was designed to replace”, with the majority of trading happening on just a few exchanges – including FTX and Binance. Sure, you could write a bit of code that says at some point the organisation must cleave into multiple competing ones, thus staving off centralisation, but it only takes one actor to decide not to play by those rules to dominate the market. The only thing preventing that from happening is, well, a central authority. Like a government.
https://www.theguardian.com/commentisfree/2022/dec/15/crypto-financial-and-corruption-making-it-worse-ftx
David A Banks:
Like any radical, a true believer in crypto could argue that FTX is what happens when the revolutionary DeFi program is not fully implemented. But here again crypto bros are hoisted by their own trustless petard. The reality is that the 21st-century crypto industry – automated or not – must follow the same capitalist market physics that were endemic to 20th-century energy markets, or 19th-century London banks: ruthless competition winnows an industry down to a few key players and then, as Marx wrote in 1847, there comes a phase “when everybody is seized with a sort of craze for making profit without producing”.
And so it should come as no surprise that, as the New York Times put it, the crypto industry quickly “started assuming some of the same characteristics as the Wall Street institutions that it was designed to replace”, with the majority of trading happening on just a few exchanges – including FTX and Binance. Sure, you could write a bit of code that says at some point the organisation must cleave into multiple competing ones, thus staving off centralisation, but it only takes one actor to decide not to play by those rules to dominate the market. The only thing preventing that from happening is, well, a central authority. Like a government.
From Charles Ponzi to Bernie Madoff, a brief
history of financial skullduggery
https://www.washingtonpost.com/photography/interactive/2022/financial-frauds-ponzi-ftx/
https://www.washingtonpost.com/photography/interactive/2022/financial-frauds-ponzi-ftx/
Related:
https://vivekjayakumar.blogspot.com/2022/12/questioning-future-of-crypto-industry.html
https://vivekjayakumar.blogspot.com/2022/02/novice-traders-and-cryptos.html