More on the basis of the FTX debacle by Emily Parker, summarized by CNN as … executive director of global content at CoinDesk, a media, event, indices and data company, and a former policy advisor at the US State Department and writer/editor at The Wall Street Journal.
… crypto shouldn’t need a savior. The whole point of crypto is that it is supposed to be decentralized and transparent. Bankman-Fried’s rise and fall shows how far the industry has strayed from that ideal. Today’s crypto world is one of opaque entities run by larger-than-life personalities. There is perhaps no better example than FTX and its leader.
It wasn’t supposed to be this way. Bitcoin, the world’s first major cryptocurrency, came into the world on the heels of the 2008 financial crisis, which led to a deep disappointment in bankers and politicians. In light of the distrust in financial institutions, the basic idea was that this new system didn’t require you to trust anyone at all. Bitcoin transactions are recorded on a decentralized ledger known as a blockchain, which everyone can see and no bad actor should be able to fraudulently alter.
But Bankman-Fried’s empire, it turned out, was far from transparent. [CNN]
As fine an analysis as this might be, it still ignores the larger context. What is that?
Look, let’s stop ignoring the interests of society. Extreme wealth, which Americans and half of humanity, if not more, are taught to desire and pursue, is, at best, a neutral result for society as a whole; it is, I suspect, more of a negative result.
THE label society is a placeholder for the idea of group survival, a group which supports successful reproduction of enough of its members to ensure group survival at a minimum. An age-old definition, more recently, as we’ve overpopulated our various geographical niches, we’ve attempted to add factors related to environmental stability and robustness to the definition, which threatens the personal ambitions of certain individuals and, more importantly, groups that share misunderstandings of the purpose of capitalism and the sort-of meritocracy to which we sort of honor.
But once this aggregate entity is recognized, there is an inherent question of whether the individual desires are superior to that of the societal requirements, or the reverse; my inclination is the latter.
But there’s a lot of adversarial evidence, isn’t there? Various forms of government and economy, the tools of society, have been tried, and that of individual autonomy are generally considered to lead to robust nations. Monarchies, theocracies, autocracies, communisms, all have lead to societal turmoil, thus lessening the chances of group survival. We’ve tried most of the worst, now we’re on this one.
But in our particular case at hand, extreme wealth and its pursuit appears to lead to instabilities of various institutions and organizations, from endangering corporate entities such as Twitter to the endangerment of societal members health, such as victims of parasites when the price of Daraprim steeply climbed due to the manipulations of a hedge fund manager, who jacked up the price in a criminal pursuit of wealth, his name being Martin Shkreli.
It’s this single minded pursuit of wealth, whether individual or under the color of corporate wealth, that tends to damage society. The cryptocurrency industry, while not bringing any tangible benefit to society, seems to have minted many new rich people.
And then deminted them.
And how does this benefit society? Well, so far I haven’t seen any such thing. Capitalism, or the cessation of mercantilism, wasn’t just to give individuals a chance to advance in society on their own merits, but to advance society’s purpose of a stable environment where the best providers are best rewarded. This single minded pursuit of wealth, from that point of view, strikes me as more a mental illness than the solid contributions of societal members.
And that’s my concern over cryptocurrencies. Just more of the same.
