It’s been a great year for those of us who haven’t had the guts to invest in crypto. The value of Bitcoin, Ethereum and Luna crashed in May. Now, crypto giant FTX has filed for bankruptcy amid serious allegations of criminal misconduct.
Finally! For years, we kicked ourselves for not investing in Bitcoin, ETH, et cetera, when we had the chance. We heard stories of people who went from bums to millionaires, while we worked in our offices and worried about our debts. As a result, we can reframe our risk aversion in pensions! Of course, we knew this would happen! Of Classes We were doing!
Really, I shouldn’t joke about this crypto madness. A lot of people have lost a lot of money. People will lose businesses, homes and families. Some may even commit suicide. Also, I had no idea this would happen. In fact, I had only a vague idea of what FTX has been.
But I, and many others, knew something was coming. We have never trusted people’s utopian claims about cryptocurrencies. As much as we envied those who bought bitcoins for small change and sold them for fortunes, it was clear that a limited number could get rich working in disconnected markets for physical goods and services. I’m no economist, but I believe that ultimately value should be attached to something we can use – or, at least, something we want.
As much as we knew and all know that bankers and politicians could and can be corrupt and stupid with our dollars, pounds and euros, we knew that cryptocurrencies were not a surefire route to freedom and independence. when their value rested on the common sense and morals of a bunch of weird online nerds. Crypto may have grown since the head of Canada’s leading cryptocurrency exchange disappeared and died, taking to his grave access codes worth $250 million in other people’s money , but the vast majority of users are still far from the elite who really make a difference.
Now it’s easy to gloat. As Onion’s modern classic headline puts it, “The Man Who Lost It All in Crypto Just Wish Several Thousand More People Told Him.”
Still, we shouldn’t gloat too much, and not just because it’s mean. The worst parts of crypto, after all, are kind of reductio ad absurdum of the modern world. It has no intrinsic value, of course, but does the 21st century have any news for us about the direction of economic life or what? Financialization and deindustrialization have combined to do the same for large swathes of first world economies.
The value of crypto seems to be collapsing with greater suddenness and force than the value of fiat currency. It would take a fool to mock impoverished Bitheads too much, because inflation – and even hyperinflation – threatens us. How safe are they our savings? Safer, perhaps, but how much?
In the wake of the FTX scandal, questions are being asked about the integrity and credibility of the financial and philosophical spheres inhabited by its eccentric CEO, Sam Bankman-Fried. (Bankman-Friend appears to be on the loose on embezzlement charges.)
In addition to crypto spaces, these include organizations dedicated to novel causes such as “long term” and “effective altruism.” How moral effective altruists are they wonder if their primary funder was involved in a huge scam? Long-term advocates, on the other hand, are dedicated to improving humanity’s long-term prospects – but Tyler Cowen rightly asks how much we can trust the people who think about our future if they do not see this great imminent danger in themselves. Would you trust a dentist with advanced tooth decay?
These are good questions, but there’s a lot more to ask, and to more important people. Sam Bankman-Fried was no dissident outsider, after all. He was a top donor to the Democrats. He has worked with the World Economic Forum. He spoke on panels with Tony Blair and Bill Clinton. Forbes put him on the cover of their magazine – with, okay, the potentially telling line, “He’s a mercenary, dedicated to making as much money as possible (he doesn’t really care how) just so he can give it away (it doesn’t really know to whom, or when).
The collapse of FTX raises questions about vulnerabilities in crypto and alternative systems of financial and philosophical thought – but it also raises questions about the mainstream. It is worth wondering how strange utilitarians and effective altruists in San Francisco were supported by Bankman-Fried. But why Biden, Blair and the WEF – and people around them – thought he was the kind of guy they wanted to associate with is also curious. Recklessness and gullibility, or worse, are not confined to any sphere in this sad story.
Ultimately, crypto isn’t going anywhere. Its appeal may be dulled but it will not go away. As Murtaza Hussein writes, it has deep value for those who want to circumvent governments and financial institutions. Although it was rocked by bad news in the West, it flourished in Africa and South America.
The bright-eyed idealism of his early years has faded – and he deserved it. As with all utopianisms, an imaginary jungle sprouted from a seed. Many people have suffered because of this. Let’s not pile all our money into crypto. But let’s not pretend that this is a delusional alternative to a stable and secure status quo either.
#goodbye #crypto #nerd #utopia