It’s been a good year for those of us who don’t have the nerve to invest in crypto. The value of Bitcoin, Ethereum and Luna crashed in May. Now, crypto giant FTX has gone bankrupt amid serious allegations of criminal conduct.
At last! For years, we’ve been kicking ourselves for not investing in Bitcoin, ETH, etc., when we had the chance. We heard stories of people who went from bums to millionaires, while we grinded in our office and fretted about debt. Suddenly, we can reframe our risk aversion as foresight! Of course we know that this will happen! from course we did!
Really, I don’t need to joke about this crypto craziness. Many people have lost a lot of money. People will lose their businesses, homes, and families. Some may even commit suicide. Plus, I had no idea this was going to happen. In fact, I had only a vague idea of what FTX is it.
But I, and many others, knew that something would happen. We never believe the utopian claims people make about crypto currencies. As much as we envied those who bought Bitcoin for small change and sold them for fortunes, it is clear that a limited amount can get rich working in a market disconnected from physical goods and services. I’m not an economist but I feel that value should ultimately be attached to things we can use – or, at least, to things we want.
As much as we all know, and know, that bankers and politicians can, and can, be corrupt and stupid with our dollars, pounds, and euros, we know that crypto currencies are not a sure path to freedom and independence when it comes to value. hinged on the good sense and morals of a bunch of weird nerds online. Crypto may have developed since the head of Canada’s leading crypto-currency exchange disappeared and died, taking access codes worth $250 million of other people’s money to their gravesBut the majority of users are still isolated from the elite who actually make a difference.
Now, it’s easy to gloat. As a modern classic Onion headline goes, “Man Who Lost Everything In Crypto Just Wishes A Few Thousand More People Warned Him.”
However, we should not be too gloat, and not just because it means. The worst aspect of crypto, after all, is type reduction ad absurdum of the modern world. It has no intrinsic value, of course, but does the 21st century have news for us about the direction of economic life or what? Financialization and deindustrialization have conspired to ensure that the same is true of the first world economic landscape.
The value of crypto appears to crash with a sudden and greater force than the value of fiat money. It takes a fool to mock the poor Bitheads too, though, as inflation – even hyperinflation – threaten us. How safe us savings? Safer, maybe, but how much?
After the FTX scandal, questions were asked about the integrity and credibility of the financial and philosophical spheres inhabited by its eccentric CEO, Sam Bankman-Fried. (Bankman-Friends seems to be on the lam following allegations of misappropriation of funds.)
As well as the crypto space, this includes organizations devoted to novel causes such as “long termism” and “effective altruism”. Just how moral are effective altruists, people are wondering, if the backer leads them to be involved in a scam at all? Meanwhile, long-term, devoted to improving the long-term prospects of humanity – but Tyler Cowen is right ask How much can we trust people who think about our future if they don’t see this huge danger themselves. Would you trust a dentist with bad teeth?
This is a good question, but there are more to ask, and more important people. Sam Bankman-Fried was no outside dissident, after all. He is one of the top donors to Democrats. He works with the World Economic Forum. He spoke on a panel with Tony Blair and Bill Clinton. Forbes put him on the cover of their magazine – with, given, a potentially telling sentence, “He is a mercenary, dedicated to making as much money as possible (he doesn’t really care how) solely so he can give it away (he doesn’t really know to whom, or when).”
The collapse of FTX raises questions about the vulnerabilities of crypto and alternative systems of financial and philosophical thought – but it also raises questions about the mainstream. How strange utilitarians and San Francisco altruists effectively obtained by Bankman-Fried is worth asking. But whether Biden, Blair and the WEF – and those around him – think he’s the sort of chap they want to associate with is also curious. Carelessness and gullibility, or worse, are not confined to any field in this sorry tale.
Ultimately, crypto isn’t going anywhere. The attraction can be weakened but it will not be extinguished. As Murtaza Hussein author, it has deep value for those who want to bypass the government and financial institutions. Although it has been shaken by bad news in the West, it has been thriving Africa and South America.
The bright-eyed idealism of his early years has faded – and deservedly so. As in the case of all utopias, an imaginary forest grows from a seed. Many people have suffered because of that. Let’s not pile all our money into crypto. But let’s also not pretend that it’s a chaotic alternative to the stable and secure status quo.