I will be honest, dear reader, that I had an entire 1300 word newsletter that I have mostly had to throw in the trash and set on fire. Since my last newsletter, more things have come to light about Sam Bankman-Fried, FTX, and the larger cryptocurrency industry that, while insane, were quickly overshadowed by the last few days' events.
I keep going back to Folding Ideas and his closing line from Line Goes Up: these are people who think the problem with the 2008 recession, and capitalism in general, is that there aren't enough opportunities to be the boot.
What do you think of the repeal of the Glass-Steagall Act? I was under the impression that gave banks somewhat carte blanche to gamble with customer money again.
What is somewhat egregious about this whole thing is once again the mainstream media completely failing to pick up on the red-flag and basically running PR for SBF and FTX. It seems to me that a lot of journalism is mostly about telling the stories the rich and/or powerful want told without any fact-checking (and most fact-checking also seem to mostly use appeal to authority to establish what is and isn't a fact).
The paragraph about hackers being perhaps partially foiled by a white-hat hacker made me want to write a short story about it. But I’m too lazy, so I want someone else to write a short story about it. When doing so, please make the backdrop more credible than reality.
Are there a couple of accidental reverse meanings in this? Like “ it would not be moved” should be “it would be moved” and “failed to push back against regulation” should be the opposite?
1. Crypto-nerds invent crypto-currencies that should save them from power of banksters and their schemings, albeit at the cost of comfort
2. Crypto-nerds invite consumers and fatcats to enter Bitcoin en masse, so they could "hide a leaf in a forrest" and because there is little point to hoard currency no one uses
3. Consumers and fatcats need comfort of use, so they invite banksters enter Bitcoin, that was invented as a refuge from those banksters.
What could go wrong?..
The very existence of places like FTX denies 2 of the 3 founding concepts of the cryptocurrencies - but people pretend it is a normal thing.
Etherium Classic is almost dead while Etherium-Rollback strives - people keep believing in Code-is-law.
Libertarians keep dreaming about world without laws like it never existed - while it actually was the starting point of mankind, the liberarian utopia was there when everyone lived in cages.
The world is sliding to new XIX century when electricity would be prohibitively expensive and cross-border communications banned by governments, people keep cheering for BTC which mandates that buying a cup of coffee in New York or Moscow requires approval from some "mining farm" somewhere in China, and stable electro-communication all the way there and back...
Standing from the outside, it's all felt like watching a friend navigate their way through a toxic relationship (when is the right time to say something?), except that it all got so big that the inevitable implosion will now have lasting affects on our whole society. What a fucking headache.
You say, “This is the concept of a bank run - when a bank is unable to keep up with the pace of withdrawals - and generally doesn’t happen to real banks because banks have laws that stop them from operating in careless ways with customer deposits.”
Come on. At the very best, that’s a gross simplification! The real deal is that the FDIC backstops most deposit account and steps in to take over banks when they become insolvent or illiquid. The rules about how banks invest money are intended to prevent that from happening, but they are far from perfect. The 2008 crisis is a great example of how they not only failed to prevent risk taking that failed spectacularly, but actually encouraged it.
I keep going back to Folding Ideas and his closing line from Line Goes Up: these are people who think the problem with the 2008 recession, and capitalism in general, is that there aren't enough opportunities to be the boot.
What do you think of the repeal of the Glass-Steagall Act? I was under the impression that gave banks somewhat carte blanche to gamble with customer money again.
How is it so boring and so fucked up and so funny at the same?
+1 for connection with US church membership & "faith-based" reasoning.
What is somewhat egregious about this whole thing is once again the mainstream media completely failing to pick up on the red-flag and basically running PR for SBF and FTX. It seems to me that a lot of journalism is mostly about telling the stories the rich and/or powerful want told without any fact-checking (and most fact-checking also seem to mostly use appeal to authority to establish what is and isn't a fact).
Logically, this should be seen as the ultimate refutation of libertarian political cosplay. Sadly, it probably will not.
The paragraph about hackers being perhaps partially foiled by a white-hat hacker made me want to write a short story about it. But I’m too lazy, so I want someone else to write a short story about it. When doing so, please make the backdrop more credible than reality.
Are there a couple of accidental reverse meanings in this? Like “ it would not be moved” should be “it would be moved” and “failed to push back against regulation” should be the opposite?
1. Crypto-nerds invent crypto-currencies that should save them from power of banksters and their schemings, albeit at the cost of comfort
2. Crypto-nerds invite consumers and fatcats to enter Bitcoin en masse, so they could "hide a leaf in a forrest" and because there is little point to hoard currency no one uses
3. Consumers and fatcats need comfort of use, so they invite banksters enter Bitcoin, that was invented as a refuge from those banksters.
What could go wrong?..
The very existence of places like FTX denies 2 of the 3 founding concepts of the cryptocurrencies - but people pretend it is a normal thing.
Etherium Classic is almost dead while Etherium-Rollback strives - people keep believing in Code-is-law.
Libertarians keep dreaming about world without laws like it never existed - while it actually was the starting point of mankind, the liberarian utopia was there when everyone lived in cages.
The world is sliding to new XIX century when electricity would be prohibitively expensive and cross-border communications banned by governments, people keep cheering for BTC which mandates that buying a cup of coffee in New York or Moscow requires approval from some "mining farm" somewhere in China, and stable electro-communication all the way there and back...
This all feels surreal...
Standing from the outside, it's all felt like watching a friend navigate their way through a toxic relationship (when is the right time to say something?), except that it all got so big that the inevitable implosion will now have lasting affects on our whole society. What a fucking headache.
You say, “This is the concept of a bank run - when a bank is unable to keep up with the pace of withdrawals - and generally doesn’t happen to real banks because banks have laws that stop them from operating in careless ways with customer deposits.”
Come on. At the very best, that’s a gross simplification! The real deal is that the FDIC backstops most deposit account and steps in to take over banks when they become insolvent or illiquid. The rules about how banks invest money are intended to prevent that from happening, but they are far from perfect. The 2008 crisis is a great example of how they not only failed to prevent risk taking that failed spectacularly, but actually encouraged it.
> I believe there is a degree of worship to empower this interest.
100% agree. also why I'm so concerned about what will happen when the dream is well and truly shattered by the coming events of the next few months.
"Have you ever considered why banks have not made their own cryptocurrency exchanges?"
They're testing that very thing over the next 12 weeks. With the Fed, Wells Fargo, Chase, JP Morgan and others testing and simulating a "digital dollar" and "tokenized money". Here's one (very brief) article https://www.reuters.com/markets/currencies/banking-giants-new-york-fed-start-12-week-digital-dollar-pilot-2022-11-15/