The mass-scale fraud Sam Bankman-Fried of FTX committed was made possible by the guise of good and the veil of crypto.
Crypto gave him a platform to commit this fraud, which wouldn’t have been possible in traditional markets.
That then begs the question, is crypto genuinely a good, game-changing technology? What impact can and does it have on the world? Why should we facilitate its growth, if at times all it seems to do is allow bad actors a free pass?
- Crypto is in its early stages – a lack of regulation attracts bad actors.
- They exploit crypto. Crypto isn’t the issue, they are.
- Because of the technology, billions of lives can be changed for the better.
- The possibilities for good are endless.
The Good, The Bad, and The Ugly
After a potentially industry-defining moment, there is always a reflection period. Sam Bankman-Fried has perpetrated one of the most prolific public deceptions and scams ever committed. The poster boy of crypto proved to be nothing more than a narcissistic criminal.
It’s easy, at times like this, to forget the positive impacts that are inherently possible in our industry. Our The Mission Has Never Been Clearer article reminded us of the importance of controlling our own finances, but that is only one aspect. This article will shed light on the others.
Crypto Is Good For Me
The title and image refer to this viral video – in case you’re confused.
Let’s be honest, the majority of people who get into crypto are enticed by the gigantic gains that are possible. That’s what captures our attention.
What keeps us around, even through painful bear markets and mass-scale, multi-billion-dollar frauds, is the “tech”.
The good that is possible through crypto would have been unthinkable 20 years ago.
Banking the unbanked:
Crypto allows people without access to a bank account to safely hold and transfer digital funds, anywhere in the world. All they need is a mobile phone and internet connection.
Examples of benefits include:
- Sending money to family across the world (no matter where they are) safely.
- Storing and travelling (or fleeing) with funds, preventing theft and exploitation.
There are many more, but you get the idea.
Funds existing outside of centralised trusted control:
This doesn’t just refer to governments, but all centralised parties requiring trust.
Humans are flawed. Power-hungry, greedy, misguided. Time after time, “trust” is proven to be a wildly inappropriate tool for financial freedom.
Governments utilise idiotic policy, whether well-meaning or sinister, that impacts the value of your hard work. Savings are inflated away, debt rates rise rapidly, and everything you fought so hard to secure can be gone in a heartbeat – all whilst you sit there powerless.
Bitcoin, and any other decentralised store of value, cannot be affected by decisions made by the “powers that be”.
Sure, it’s correlated to other asset classes now. But this point is becoming clear to institutions, billionaires, and ordinary people alike. The future is bright.
Rivalling an entrenched system:
The entire financial system is flawed and corrupt. Banks operating 10x leveraged (they only hold 1/10 of what they lend out). Private companies print money and lend it to governments. The same private companies control the interest rates. Investment managers and institutions earn huge amounts off the back of allowing access to financial tools. This is only the tip of the iceberg.
For hundreds of years, citizens have had no option but to bow their heads and say “yes sir”.
Imagine if there was only 1 food company in the world. You had no option but to buy from them. Would they be incentivised to keep the price low and taste good, or to maximise profits knowing you have nowhere else to go? That monopoly has long existed around the value in the world. Until now.
Crypto presents something that governments cannot control. They can try, but ultimately, they will fail.
Now that the ability to escape the financial system exists, it provides competition. No longer are we entirely reliant, we have options. This means malpractice and poor decisions will not be tolerated anymore.
Financial regulation is a joke, to put it simply.
The approach is ineffective, and quite honestly, dumb. Terrorism financial is almost impossible to detect. Money laundering is a walk in the park. It’s extremely rare for someone to be imprisoned for even the most severe financial crimes. When they are, they’re usually a scapegoat.
Crypto forces a rethink. The current financial regulation doesn’t fit, and they can’t force it to. Hopefully, this necessary change will cause improvements.
The ability to directly interlink systems through code, without the need for trust, is a game-changer. Integration and real-time communication, without any manpower or trust necessary, offers huge efficiencies.
Let’s use finance as an example. Different financial products, such as staking, liquidity providing, quantitative trading, can be interlinked. Structured products can be built utilising this network, earning previously impossible returns. All whilst hedging their risk automatically.
Crypto is shining a light on a massive number of sub-optimal systems (storing value, managing money, transferring data etc). Decentralising companies is doing the same thing for company structures and operations.
There is a long, long way to go before DAOs are battled tested amd refined from abuse (which is rife). But, when that happens, they will run in direct competition to standard companies.
Some examples of benefits include:
- Ability to hire experts for individual jobs/tasks.
- Removal of bureaucratic red tape and outrageous outsourcing fees.
- 1000x+ productivity. Anyone can propose improvements, which the proposer executes (meaning they don’t use limited resources).
- Community incentivised to put forward proposals that improve the company. They get paid, plus they increase the value of the tokens they hold. If the protocol improves and generates more revenue, earn more through revenue share.
Centralisation ISN’T the Enemy
The fact of the matter is no matter what, people will still opt to use centralised, trusted parties.
We can shout till the cows come home about self-custody and the risks inherent in trusted systems. Karen isn’t going to change her ways.
The use of Karen is satirical, but there is always a use for centralised parties. They can look after funds, create innovative products and offer great services. The issue is when there is no option but a centralised, trusted party.
Above I’ve touched on some of the most obvious benefits crypto can bring to the world. There is no doubt many more.
Clearly, it’s a fight worth having. There will be hiccups along the way, but the end goal is worth the battle. We are leading the charge towards a better world for everyone.
Crypto is a big-picture power shift. It is set to change the world. Those who embrace it are helping create a fairer, brighter future. Those who aren’t are fighting in vain.
Whether you like it or not, it’s coming. And we, for one, are ready.
This is just some of the possibilities. If you have any other exciting use cases and possibilities for crypto, drop them in the comments!