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Didn’t SBF make his fortune in the crypto space? By definition this would mean capturing real money from retail investors, right? It’s possible that this money

Didn’t SBF make his fortune in the crypto space? By definition this would mean capturing real money from retail investors, right? It’s possible that this money can be reallocated more “effectively” according to some quantifiable measure identified by SBF, yet this doesn’t sit well with me. What happened to the Golden Rule? Or to Sartre’s “in choosing for himself, [each man] chooses for all men”? Surely if EA leads some to causing such wide-scale short-term pain in its name, at the very least it cannot be a humanism. I realize this isn’t a strong argument, but when I hear about an EA champion, there’s often this dynamic where how they made money doesn’t matter. They’re wealthy, so clearly what they do is valued by the market and we should ignore externalities that aren’t priced into their income. It’s like Big Oil pointing to specific green outcomes that they fund; these outcomes are quantifiable yet funded by hard to price but reprehensible practices. It all feels like Catholic indulgences… Maybe this is still a net-positive for society in that it provides people who wouldn’t be humanist anyway (e.g. libertarians) with a well-intentioned philosophy?

eru 4y ago
> Didn’t SBF make his fortune in the crypto space? By definition this would mean capturing real money from retail investors, right? No. What kinds of weird definitions are you using? (You might be right in practice, I don't know. But you are not right by definition.) > It all feels like Catholic indulgences… And that is wrong somehow? If you grant the assumption that the Catholic church was a worthwhile organisation doing good work, then the indulgences seemed like a perfectly good idea to me on a practical real-world level. (No clue about the intricacy of Christian doctrine, so I can't say whether they were kosher from a theological point of view.)
jefftk 4y ago
> Didn’t SBF make his fortune in the crypto space? Yes. Initially he worked in regular finance, at Jane Street, and then crypto, founding the Alameda Research trading firm and FTX exchange. > By definition this would mean capturing real money from retail investors, right? I'm not very knowledgeable about crypto, but I don't understand how the definition of crypto means this? The article we're commenting on describes one of the early successes of Alameda, where they saw that Bitcoin was consistently trading for much higher prices in Japan than in the rest of the world. In normal finance you mostly don't see this sort of thing for very long, because global markets are highly interconnected, but in this case it was logistically difficult to sell Bitcoin in Japan. In fixing this, Alameda lowered the price at which Japanese investors were able to buy Bitcoin, and raised the price at which people elsewhere were able to sell Bitcoin, keeping a fraction of the difference for themselves; I don't see how Alameda made others worse off? With FTX they're making money by providing a platform that makes it easier for people to trade with each others. A bit of, 'in a gold rush cell shovels'. Again, I don't see how they're making others worse off? > when I hear about an EA champion, there’s often this dynamic where how they made money doesn’t matter. Sort of! If someone is initially not altruistic and accumulates a bunch of money doing something questionable, then if they later come around to doing good things with their money I'm going to be happy about that. So while I am not a fan of, say, Microsoft's business practices in the '90s which made Gates a billionaire, I do think his decision to spend his fortune the way he has is a good one, and one that should be commended. The alternative is that, like most other billionaires, the money goes to houses, yachts, and other things which are far less positive for the world. On the other hand, SBF is in a different category: he was trying to be an effective altruist from the beginning. So if he did something massively harmful to earn his money (which, as discussed above, I don't think he did) we would need to consider that in figuring out his net impact. Additionally, it is pretty common for EAs to argue that you shouldn't do harmful things even if they are majorly profitable and allow you to do a lot of good through your donations.
- mtremsal 4y ago
  Thank you for the clarifications. This is very interesting. The parallel with Gates did come to my mind as well. > I'm not very knowledgeable about crypto, but I don't understand how the definition of crypto means this? Crypto doesn’t really power real-life use cases outside of trading crypto assets and associated financial services. For real money to come into the space there needs to be an influx from outside. Usually that means VCs and, more largely, retail. I’m not necessarily arguing here that the crypto space is a drain on society, as I think that’s contentious, but the claim that most real money in crypto originates from people outside of it should be a truism. To me this makes SBF’s approach something misguided, as they’re reallocating capital from people at large to a single person. Even with the best intentions I can’t see this as a humanist approach. Some charitable projects do require massive funding and opinionated goals, but isn’t that what nonprofits and politics are for? I guess it does come down to whether someone sees making money off of crypto as having strong negative externalities or not. If SBF was simply creating value by democratizing access then it’s just a regular job. If he was propping a scam industry that drains retail investors of real money then it’s a net negative even with EA as the goal. Still, the inherent long-termism within EA seems to make it easier for people to embrace very Kantian views that maybe discount their short-term impacts.

eru 4y ago

> Didn’t SBF make his fortune in the crypto space? By definition this would mean capturing real money from retail investors, right? No. What kinds of weird definitions are you using? (You might be right in practice, I don't know. But you are not right by definition.) > It all feels like Catholic indulgences… And that is wrong somehow? If you grant the assumption that the Catholic church was a worthwhile organisation doing good work, then the indulgences seemed like a perfectly good idea to me on a practical real-world level. (No clue about the intricacy of Christian doctrine, so I can't say whether they were kosher from a theological point of view.)

jefftk 4y ago

> Didn’t SBF make his fortune in the crypto space? Yes. Initially he worked in regular finance, at Jane Street, and then crypto, founding the Alameda Research trading firm and FTX exchange. > By definition this would mean capturing real money from retail investors, right? I'm not very knowledgeable about crypto, but I don't understand how the definition of crypto means this? The article we're commenting on describes one of the early successes of Alameda, where they saw that Bitcoin was consistently trading for much higher prices in Japan than in the rest of the world. In normal finance you mostly don't see this sort of thing for very long, because global markets are highly interconnected, but in this case it was logistically difficult to sell Bitcoin in Japan. In fixing this, Alameda lowered the price at which Japanese investors were able to buy Bitcoin, and raised the price at which people elsewhere were able to sell Bitcoin, keeping a fraction of the difference for themselves; I don't see how Alameda made others worse off? With FTX they're making money by providing a platform that makes it easier for people to trade with each others. A bit of, 'in a gold rush cell shovels'. Again, I don't see how they're making others worse off? > when I hear about an EA champion, there’s often this dynamic where how they made money doesn’t matter. Sort of! If someone is initially not altruistic and accumulates a bunch of money doing something questionable, then if they later come around to doing good things with their money I'm going to be happy about that. So while I am not a fan of, say, Microsoft's business practices in the '90s which made Gates a billionaire, I do think his decision to spend his fortune the way he has is a good one, and one that should be commended. The alternative is that, like most other billionaires, the money goes to houses, yachts, and other things which are far less positive for the world. On the other hand, SBF is in a different category: he was trying to be an effective altruist from the beginning. So if he did something massively harmful to earn his money (which, as discussed above, I don't think he did) we would need to consider that in figuring out his net impact. Additionally, it is pretty common for EAs to argue that you shouldn't do harmful things even if they are majorly profitable and allow you to do a lot of good through your donations.

mtremsal 4y ago
Thank you for the clarifications. This is very interesting. The parallel with Gates did come to my mind as well. > I'm not very knowledgeable about crypto, but I don't understand how the definition of crypto means this? Crypto doesn’t really power real-life use cases outside of trading crypto assets and associated financial services. For real money to come into the space there needs to be an influx from outside. Usually that means VCs and, more largely, retail. I’m not necessarily arguing here that the crypto space is a drain on society, as I think that’s contentious, but the claim that most real money in crypto originates from people outside of it should be a truism. To me this makes SBF’s approach something misguided, as they’re reallocating capital from people at large to a single person. Even with the best intentions I can’t see this as a humanist approach. Some charitable projects do require massive funding and opinionated goals, but isn’t that what nonprofits and politics are for? I guess it does come down to whether someone sees making money off of crypto as having strong negative externalities or not. If SBF was simply creating value by democratizing access then it’s just a regular job. If he was propping a scam industry that drains retail investors of real money then it’s a net negative even with EA as the goal. Still, the inherent long-termism within EA seems to make it easier for people to embrace very Kantian views that maybe discount their short-term impacts.