The Newest Villain, in a World Where Everything Is Money and Where Everything Is a Scam.
On October 27th I wrote:
Blockchains are useful in environments where there is no or low amounts of trust. That’s it. That’s what a blockchain is bringing to the table: the capability to trust.
Yesterday, the second biggest crypto exchange, FTX, went to the shitter. What was FTX? At the surface level it was a bank for cryptocurrencies. After 2008 banks couldn’t be trusted and that’s how Bitcoin originally came to be. It aimed to bring a higher level of trust to the financial system using blockchain technology. FTX didn’t use blockchains to cover the trust element. FTX was an institution that needed to be trusted in the same way banks are trusted. Ultimately, going against everything crypto is about.
In addition to that, FTX was a bank with the capability of printing out infinite amounts of money and using that money as collateral to borrow more money. So what happened, what made FTX go to the shitter? Well, remember 2008? Little reminder:
Imagine, you have lost oversight of the ensemble of assets in the whole crypto system, similar to 2008, and at the same time you don’t need to bother selling shady assets because you can just print your own assets that don’t appear shady? As long as people believe that your assets aren’t shady you are fine, but imagine if people don’t believe in your assets anymore and want their real money back that they gave you since you are a bank. Now turns out that for whatever unknown reason you also decided to use your customers money to do some shady stuff and so you can’t pay your customers back their money. All you have left is your own shady assets that now have no value at all, customers that want their money back and lenders that you can’t pay back because your collateral is now worthless. That happened to FTX.
Kind of foreseeable since we learnt about human greed and complex financial systems in 2008, you might think? I mean at least the dude in the video gets it, right? So how crazy would it be if the guy in the video was the founder and CEO of FTX? Surprise, surprise, he is. Let me introduce to you SAAAAM clap clap clap.
By the way, he also said that: lol.
And here is the partial result of it all.
Lucky him if that’s it for now. Because, if what I wrote above is true, that makes him a criminal and he will be convicted. But then again, what really happened to the Wall street bosses in 2008? Not much.
That is the most recent story of some guy ruining it for a lot of people in crypto. But there is an important thing to point out:
There is a difference between incompetence and tech bugs VS. criminal behaviour and greed. My post from yesterday should allow you to avoid both types of people and projects over time.
Anyways, we are not done with Sam yet. He screwed it up for a lot of people here, most probably in the company of these two:
And since this is a very low moment for the entire industry, especially all the people constantly building real and useful technology for the future, let’s use a little dark humour and have a little laugh at Sam’s expense. Shall we?
