Perhaps you are right: Creating a financial system for e-tulips was dumb in the first place.
But that discussion goes beyond the scope of this post. The fact of the matter is the financial system for crypto was created, and a major player crashed, and people not well versed in finance and crypto are somewhat interested in how it happened.
I think it’s directly relevant to what you wrote in the “What Happens Now” and “What Happens to Crypto” section, which I take to be the point that the rest of the post is kinda building up to. These sections seem to be written with some assumptions which I think are unwarranted and, at least, untrue in my opinion.
Comparisons with Enron, Lehman, etc → Assumption: There was some real value here that customers put in, that was lost/destroyed/stolen by fraud. I think this assumption is not true for other crypto assets, only for the USD that people put in.
“In reality I think it is good that these bad actors get flushed out.” → Assumption: there are good actors, i.e. that after bad actors get “flushed out” there will be a significant number of non-flushed actors
“the engineers working on figuring out ways that the technology can have utility are still working on the space.” → Assumption: crypto can have significant utility and thus has value
“I hope that this saga leads to more due diligence . . . . when it [comes] to internal accounting controls and good governance [at crypto firms]. . . .” → Assumption: It is possible for there to be crypto firms that have good internal accounting controls, good governance, and be well capitalized. IMO, doing due diligence on a crypto firm is like entering a cat in the dog show—sure you can list all the ways it does or does not conform to breed standards (pointy ears, upright tail, etc) but fundamentally the problem is that it’s a cat.
“People will always say that this is a story about crypto. In reality, this is a story about lending.” → No, I think it’s a story about crypto.
It is possible for there to be crypto firms that have good internal accounting controls, good governance, and be well capitalized.
Clearly this is possible because Coinbase exists, and in fact does the exact same thing FTX did except they don’t steal user funds. You may not like the fact that Coinbase exists, or that Bitcoin can currently be traded for 16,000$; those facts may confuse or frustrate you, but that does not make them untrue.
Perhaps you are right: Creating a financial system for e-tulips was dumb in the first place.
But that discussion goes beyond the scope of this post. The fact of the matter is the financial system for crypto was created, and a major player crashed, and people not well versed in finance and crypto are somewhat interested in how it happened.
I think it’s directly relevant to what you wrote in the “What Happens Now” and “What Happens to Crypto” section, which I take to be the point that the rest of the post is kinda building up to. These sections seem to be written with some assumptions which I think are unwarranted and, at least, untrue in my opinion.
Comparisons with Enron, Lehman, etc → Assumption: There was some real value here that customers put in, that was lost/destroyed/stolen by fraud. I think this assumption is not true for other crypto assets, only for the USD that people put in.
“In reality I think it is good that these bad actors get flushed out.” → Assumption: there are good actors, i.e. that after bad actors get “flushed out” there will be a significant number of non-flushed actors
“the engineers working on figuring out ways that the technology can have utility are still working on the space.” → Assumption: crypto can have significant utility and thus has value
“I hope that this saga leads to more due diligence . . . . when it [comes] to internal accounting controls and good governance [at crypto firms]. . . .” → Assumption: It is possible for there to be crypto firms that have good internal accounting controls, good governance, and be well capitalized. IMO, doing due diligence on a crypto firm is like entering a cat in the dog show—sure you can list all the ways it does or does not conform to breed standards (pointy ears, upright tail, etc) but fundamentally the problem is that it’s a cat.
“People will always say that this is a story about crypto. In reality, this is a story about lending.” → No, I think it’s a story about crypto.
Clearly this is possible because Coinbase exists, and in fact does the exact same thing FTX did except they don’t steal user funds. You may not like the fact that Coinbase exists, or that Bitcoin can currently be traded for 16,000$; those facts may confuse or frustrate you, but that does not make them untrue.