Truly though I have a lot of sympathy for users of these platforms, the portion that thought they were on the ground floor of something that would change how the economy functions, and any speculators who were not simply operating on the "greater fool" theory.
I myself thought "heck, this could work, if institutional money gets involved and the stronger coins find a real economic outlet." After all, pure faith in the entrenched financial systems of the world is a big part of what keeps them going when times get tough too. Though I was still entirely too cynically skeptical to risk my own money, I was cautiously optimistic that some interesting shakeups could be in the works.
As it turns out, crypto was still entirely too much of a closed system to sustain shocks like this, assets entirely too correlated with each other, fraudsters entirely too prevalent, many who were entirely too ready to throw the baby out with the bath water when it came to ignoring lessons learned by traditional finance, and on and on.
I think part of what this all reveals is that blockchain transparency of coin transactions is not enough. The rebuilding phase to come needs to focus on the next level up. A blockchain providing a level of brutally clear transparency into all the layers of their own dealings that operating on top of or along side of or in connection to coins/tokens. This is needed for all of the somewhat centralized entities that are useful (and, IMHO necessary) to reduce friction & increase usability of crypto.
^^Regarding that, maybe it's not even a problem that tech can, by itself, solve. Though often derided, legalese is professional jargon that has developed over the course of centuries in an attempt to minimize ambiguities in transactions between people, and we still need courts with human judgement to sort things out around edge cases, oversights, etc. It may simply be impossible to solve, at least at the level of "code is law", issues like we see with FTX and its contagion to all levels of crypto that were (either deliberately or in good faith) not operating carefully.
I don't know. I'm conflicted on the topic, as perhaps the above rant-ish ramblings show. I was rooting for this generation of crypto tech to take hold as it shook off the scammers and other barnacles of the industry, rooting for it to find a bridge to utility with the actual economy, but even as I rooted for things to go well I am unsurprised by this outcome.
I think what it comes down to is that the folks who really want to make this happen and change the way financial systems run society (rather than only to become rich themselves) need to take a step back reassess their philosophy. They need to determine if technology really can address the goals derived from their philosophy. If it can then they start the hard work of building it. If it can't, then there's the even harder work of pruning away the goals derived from their philosophy that can't be achieved by tech, software, etc.
For myself, the core part of the philosophy that I think is fundamentally flawed is the "trustless" pillar. I think it may be fundamentally impossible to build something systemic to the infrastructure of society that does not, at a fundamental level, also rely on trust to one degree or another. Bruce Schneier's book Liars and Outliers is an excellent exploration on the topic of trust, and it's hard to come away from that book & still believe in the vision of a truly trustless financial system which, at some level, underpins a great majority of our lives.
The classics never die: https://media.tenor.com/SgK-2pYa_bEAAAAC/casablanca-shocked....
Truly though I have a lot of sympathy for users of these platforms, the portion that thought they were on the ground floor of something that would change how the economy functions, and any speculators who were not simply operating on the "greater fool" theory.
I myself thought "heck, this could work, if institutional money gets involved and the stronger coins find a real economic outlet." After all, pure faith in the entrenched financial systems of the world is a big part of what keeps them going when times get tough too. Though I was still entirely too cynically skeptical to risk my own money, I was cautiously optimistic that some interesting shakeups could be in the works.
As it turns out, crypto was still entirely too much of a closed system to sustain shocks like this, assets entirely too correlated with each other, fraudsters entirely too prevalent, many who were entirely too ready to throw the baby out with the bath water when it came to ignoring lessons learned by traditional finance, and on and on.
I think part of what this all reveals is that blockchain transparency of coin transactions is not enough. The rebuilding phase to come needs to focus on the next level up. A blockchain providing a level of brutally clear transparency into all the layers of their own dealings that operating on top of or along side of or in connection to coins/tokens. This is needed for all of the somewhat centralized entities that are useful (and, IMHO necessary) to reduce friction & increase usability of crypto.
^^Regarding that, maybe it's not even a problem that tech can, by itself, solve. Though often derided, legalese is professional jargon that has developed over the course of centuries in an attempt to minimize ambiguities in transactions between people, and we still need courts with human judgement to sort things out around edge cases, oversights, etc. It may simply be impossible to solve, at least at the level of "code is law", issues like we see with FTX and its contagion to all levels of crypto that were (either deliberately or in good faith) not operating carefully.
I don't know. I'm conflicted on the topic, as perhaps the above rant-ish ramblings show. I was rooting for this generation of crypto tech to take hold as it shook off the scammers and other barnacles of the industry, rooting for it to find a bridge to utility with the actual economy, but even as I rooted for things to go well I am unsurprised by this outcome.
I think what it comes down to is that the folks who really want to make this happen and change the way financial systems run society (rather than only to become rich themselves) need to take a step back reassess their philosophy. They need to determine if technology really can address the goals derived from their philosophy. If it can then they start the hard work of building it. If it can't, then there's the even harder work of pruning away the goals derived from their philosophy that can't be achieved by tech, software, etc.
For myself, the core part of the philosophy that I think is fundamentally flawed is the "trustless" pillar. I think it may be fundamentally impossible to build something systemic to the infrastructure of society that does not, at a fundamental level, also rely on trust to one degree or another. Bruce Schneier's book Liars and Outliers is an excellent exploration on the topic of trust, and it's hard to come away from that book & still believe in the vision of a truly trustless financial system which, at some level, underpins a great majority of our lives.