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The issue is that we don't believe the crypto industry seeks to improve the financial system, on any scale. It's not just that so many of them have turned out t

The issue is that we don't believe the crypto industry seeks to improve the financial system, on any scale. It's not just that so many of them have turned out to be scammers — it's that the industry as a whole has not put in any work to prevent that, and often has actively worked to prevent any sort of guardrails.

jjulius 4y ago
Right. In many of the "OMG What Happened to SBF?" articles this week, it's mentioned over and over that SBF ran afoul of many of his industry counterparts because he cozied up to Washington and pushed for regulation. I don't know how someone can feel comfortable handing their money over to anyone who essentially says, "I don't want there to be any rules around what I can do with this, and people who can punish me for abusing this need to stay away". That's INSANE to me. I don't doubt that there are a few companies in the space that are trying to do some genuine good. But I'd wager that I can count them on one hand. Edit: And if someone's going to say, "This industry has potential, don't cheer it's demise," then show me the potential. Show me the companies doing that good stuff, because we're not seeing it.
psychlops 4y ago
This is a very interesting point. Traditional banking would certainly be able to come together (and often do) to serve their own interests by restricting entrants. It's not clear to me how open source projects like a bitcoin might prevent scammers from cloning the source and opening a discord channel to people leading to an eventual rugpull. The success of bitcoin has led many to think that duplicating network effects is the path to easy riches. I guess they are not wrong.
- jakelazaroff 4y ago
  We’re not just talking about open source, though. Crypto is propped up by billions of dollars from some of the most powerful people on the planet. The fact that funds like Sequoia and a16z are showering crypto companies like FTX with money — while doing minimal due diligence and without taking any meaningful action to fight scammers — is incredibly revealing. But even insofar as we are talking about “little guys”, so to speak, one very simple thing they could do would be to actively call out people and projects that are scams.
  - psychlops 4y ago
    I imagine the ability of those in crypto, big or little, to identify or pursue criminality will remain limited. The problem hasn't been solved in traditional finance. SBF testified in front of Congress. I have no attachment to FTX and didn't even know its name a week ago, but it seems pretty legit knowing that one fact. As for Tether, a few moments of reflection on how a stablecoin stays stable in crypto should be enough for people to worry. I won't even go into the trust placed in exchanges. But there is evidently an endless supply of fiat that will continue to go into these scams. Perhaps a better focus would be on pursuing negligence on the part of the founders and investors such as Sequoia and a16z. Frequently these scams are only obvious after they fail and are merely unprovable suspicions before.

jjulius 4y ago

Right. In many of the "OMG What Happened to SBF?" articles this week, it's mentioned over and over that SBF ran afoul of many of his industry counterparts because he cozied up to Washington and pushed for regulation. I don't know how someone can feel comfortable handing their money over to anyone who essentially says, "I don't want there to be any rules around what I can do with this, and people who can punish me for abusing this need to stay away". That's INSANE to me. I don't doubt that there are a few companies in the space that are trying to do some genuine good. But I'd wager that I can count them on one hand. Edit: And if someone's going to say, "This industry has potential, don't cheer it's demise," then show me the potential. Show me the companies doing that good stuff, because we're not seeing it.

psychlops 4y ago

This is a very interesting point. Traditional banking would certainly be able to come together (and often do) to serve their own interests by restricting entrants. It's not clear to me how open source projects like a bitcoin might prevent scammers from cloning the source and opening a discord channel to people leading to an eventual rugpull. The success of bitcoin has led many to think that duplicating network effects is the path to easy riches. I guess they are not wrong.

jakelazaroff 4y ago
We’re not just talking about open source, though. Crypto is propped up by billions of dollars from some of the most powerful people on the planet. The fact that funds like Sequoia and a16z are showering crypto companies like FTX with money — while doing minimal due diligence and without taking any meaningful action to fight scammers — is incredibly revealing. But even insofar as we are talking about “little guys”, so to speak, one very simple thing they could do would be to actively call out people and projects that are scams.
- psychlops 4y ago
  I imagine the ability of those in crypto, big or little, to identify or pursue criminality will remain limited. The problem hasn't been solved in traditional finance. SBF testified in front of Congress. I have no attachment to FTX and didn't even know its name a week ago, but it seems pretty legit knowing that one fact. As for Tether, a few moments of reflection on how a stablecoin stays stable in crypto should be enough for people to worry. I won't even go into the trust placed in exchanges. But there is evidently an endless supply of fiat that will continue to go into these scams. Perhaps a better focus would be on pursuing negligence on the part of the founders and investors such as Sequoia and a16z. Frequently these scams are only obvious after they fail and are merely unprovable suspicions before.