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“People want an authority to tell them how to value things, but they choose this authority not based on facts or results; they choose it because it seems authoritative or familiar.”
–Michael Lewis, The Big Short.
Renowned author Michael Lewis published his book, Going Infinite: The rise and fall of a new tycoon, about the rise and fall of FTX on the first day of the trial of its notorious founder Sam Bankman-Fried (Bankman-Fried). The book has received strong criticism from commentators for its apparently favorable portrait of millennial cryptocurrency founder.
It’s funny because, at its core, the Bankman-Fried story is very old school, Big short-That’s a tale of a privileged actor who took advantage, for his own benefit, of our society’s predilection to make value judgments about people not because of their history –– or as Lewis said, “facts” –– but rather based on a set of heuristics and approval from “sophisticated” people.
Bankman-Fried’s ability to convince those we trust that they are the “smart people” in our society – including Lewis – is astonishing. But why did they fall in love with him?
Maybe it’s because Bankman-Fried was someone they understood. He was an expert who, like them, saw cryptocurrencies as a community they could leverage, rather than an ecosystem to nurture.
crypto colonialism
Fortune Magazine in crypto-sam-bankman-fried-interview/”>your profile of Bankman-Fried, wrote that the Bay Area native doesn’t seem like the most powerful man in crypto. But is that really true?
If anything, a twenty-something man oozing social awkwardness, a degree from MIT, and little fashion sense is the wet dream of many modern “sophisticated” tech investors. Bankman-Fried could easily be a character from the hbo show Silicon Valley.
Add to that his birthright (two parents who are law professors at a modern commerce basilica), Stanford University, and you get an almost messianic figure of modern capitalism.
One need look no further than Kevin O’Leary’s praise for him, saying, “I’m a big supporter of Sam because he has two parents who are compliance attorneys.” said the Shark Tank investor. in 2022.
O’Leary continued, “If there’s ever a place I could be and not get in trouble, it’ll be at FTX.” We later discovered that the Canadian investor was payed about a million dollars an hour for being Bankman-Fried’s public spokesperson.
But beyond Bankman-Fried’s bona fides, the real selling point that caught investors’ attention was Bankman-Fried’s mission.
No “effective altruism –– subscribing to fashionable and falsely empathetic movements is certainly a good marketing strategy for elite financiers. But what really excited his investors was his belief that cryptocurrencies were not a serious industry worth developing, but rather a great opportunity to grab a bag full of gamblers’ money.
As a venture capitalist from Sequoia Capital put it on a now deleted profile According to Bankman-Fried, “Yes, cryptocurrencies could eventually replace money and, yes, they may eventually decentralize the web,” the investor said.
He continued: “But all those things are not true today. And then, what do people do today? They trade. And if people trade and like trading, what is the business model that will make tons of money? “It would be an exchange.”
This quote shows that Bankman-Fried investors did not consider the crypto community serious. For them, cryptocurrencies themselves have the same social meaning as landing three sets of cherries in a row on a slot machine in a Las Vegas casino. It is better to invest in the casino than in the photos of cherries.
Agree or disagree with them, the cryptocurrency community, and specifically the bitcoin subsection, takes its goals seriously. They are largely a group of libertarian and highly principled people. They take seriously their vision for how blockchains can be used to liberate the currently unbanked, protect the value of everyone’s work from rising inflation, and connect people around the world through payments and, specifically, eliminate government interference with money.
As Erik Voorhees says –– in what it is now one of the final debates with Bankman-Fried –– “what we are doing here is, in fact, bringing the same separation that occurred between church and state between the state and payments. In fact, freeing people all over the world.”
The seriousness of the beliefs of people like Voorhees does not count for people like Sequoia VC or Bankman-Fried. To them, those beliefs were useful because they got a community to work hard for almost no reward until the first bitcoin bull runs. But the belief itself? For the jaded elite, a company’s mission is often a means to a single end: enriching the bank account.
To them, a mission is as important as doing a “charity” or taking a service trip in high school to look good to an Ivy League admissions officer. It’s just part of the “game.”
This is quite problematic, since your investments nft-yuga-funding-round-1235211728/#:~:text=Yuga%20Labs%2C%20the%20company%20that,Andreessen%20Horowitz’s%20a16z%20crypto%20fund.”>in immature crypto companies –– and childish behavior in general, such as when FTX increase $420,690,000 from 69 investors –– is a big part of the reason why the “cryptocurrency” industry It is not respected by the general public..
Furthermore, Bankman-Fried done regularly Statements criticizing bitcoin for being “slow and bulky.” Note that the bitcoin community not only gave rise to cryptocurrencies, but therefore bitcoin“>Better or worse –– perhaps the most ideologically pure people in technology.
Additionally, Bankman-Fried sought to influence legislation that would affect serious bitcoiners. Since he was ––before the collapse of FTX–– one of Washington’s biggest donors, he would probably be able to pressure the government to follow his point of view.
But this here is a form of colonization. The crypto community was a vibrant ecosystem before Bankman-Fried’s entry. It was a group of misfits who came together to build something unique and important. An opportunity to feel empowered in a system in which they feel marginalized. That Bankman-Fried and her cohorts came in with the goal of taking a percentage of trading fees from investors –– rather than creating products and businesses in the spirit of bitcoin–– was their original sin.
Should we be so surprised that it finally fell apart?
A silicon socialist
In a similar vein to a small child asking “why doesn’t the government just print more money and give it to the homeless?” –– Bankman-Fried’s goal was to make a lot of money and give it away. Like a benevolent patrician. Andrew Carnegie in shorts.
But was it really a genuine charitable impulse or was his empathy simply a kind of game strategy to increase his social capital?
In a phone call with crypto reporter Tiffany Fong, Bankman-Fried, said she donated as much money to Republicans as Democrats, but did so quietly to curry favor with journalists who he they felt they were predominantly left-wing. In other words, Bankman-Fried manufactured a public image of humanitarianism, but in reality his raison d’être was to gain more power and influence.
His former business partner Anthony Scaramucci he said that He considered Bankman-Fried to have a kind of “superiority complex.” So maybe in Bankman-Fried’s head he thought that he could single-handedly solve all the world’s problems if he had all the money.
Whatever the truth, what made Bankman-Fried think he had the right to use other people’s money at his own discretion? Or for him to enter a space that he, once again, had almost nothing to do with creating it. What made you think that he should be the authority to decide? crypto-environmental-impact-russia-ukraine-helping-unbanked/#:~:text=%E2%80%9CIf%20we%20do%20end%20up,think%20one%20of%20the%20most”>what aspects Are they kosher or haram? EITHER crypto-legislation-backed-by-ftx-founder/”>draft legislation for it?
In essence, there is a belief that he was the smartest person in the room. A believer certainly had the innate privilege of feeling given the social status of his parents and their undeniable analytical genius. But what was missing from the Bankman-Fried matrix was a soul. A soul that would allow him to truly respect the community he entered as a stranger.
History is full of examples of people like Bankman-Fried, who came to power promising to be stewards of a new, more just utopia. When in reality the main change they seek is to be the ones in power. Bankman-Fried took that trope and incorporated it into Silicon Valley culture.
As Michael Lewis writes, for Bankman-Fried, most of life crypto/”>It’s just some kind of game. One that –– if most legal experts They are right –– will not restart.
This is a guest post by Jacob Kozhipatt. The opinions expressed are entirely their own and do not necessarily reflect those of btc Inc or bitcoin Magazine.
