Hi, this is Wayne again with a topic “What the FTX Failure Means for Crypto”.
But we should uh, we should jump into the FTX thing. I feel, like you have probably tracked this significantly more than I have sort of so like what I wanted to say about. The FTX thing is that you know before you go into it just for people that have no idea what they even are: oh yeah, oh FDX, so they uh FTX is a cryptocurrency exchange owned by uh or started by a guy named Sam bankman freed. Fried I don’t know how to say his name freed and uh. He was like viewed as sort of a prodigy became a huge billionaire.
Very rich um loves League of Legends, so that should tell you something about how where this is going degenerate. If you play League of Legends, everything else is fine. You can’t call anything else to degenerate nowadays, but League of Legends. That’S the thing you can say it’s degenerate. It’S fine! Oh okay! Yeah in case you didn’t know that they released.
What I do know is that he’s really bad at League of Legends. This was honestly, I think, the most disappointing part of this whole story to me, because we’re going to talk about how this guy screwed people over millions and billions of dollars and that’s really obviously disappointing. But the thing that impacted me, the most, is that this person apparently has hundreds of games potentially over a thousand hours like lots and lots of time in League of Legends and had is stuck at hard stuck in bronze.
I was trying yeah, which is just so cringe dude like I saw I just read an article. I just read an article uh that was saying. Well, I didn’t read it but like as I was about to come on set here.
I was like oh my gosh. I don’t know enough about this, to talk about it, so that I was like trying to look stuff up real quick and I found an article about how, when he was on business meetings, people would hear Clicks in the background and he had a reputation for playing League of Legends, while on conference calls for business wow, that’s uh, it’s 8 PM APM was huge, um still hard, sucking bronze, though so, basically, so, basically with the FTX thing uh. What I understand about it, I didn’t follow absolutely everything: every development, because, honestly, since the crypto crash earlier this year, I have not paid attention as much to crypto stuff, because I think that it has largely kind of passed out of the mainstream view. I mean I don’t want to say that, because yeah there are still like TX had their name on a sports arena. I don’t know for sure which one I don’t know, but you know like probably not going to be seeing Super Bowl ads for for crypto coins.
Anytime, soon again – or maybe we will – I I don’t even know when the Super Bowl is, is it in April, so it’s around there. I should know this as I expected you to know. But what am I thinking I actually don’t know um. All I know is I get a notification from my brother and my dad.
Every year and they’re like hey, we’re watching the Super Bowl it’s on this day and I show up yeah exactly my mom makes chili and it’s a family thing, um yeah, but nobody watches it before the Super Bowl anyways uh. Apparently, as far as I can tell, this is like the tldr Sam bankman freed was he’s the he started FTX The Exchange. He was using funds uh from that exchange as collateral on another one of his companies called Alameda research uh.
He made some wrong decisions uh. It caused the collapse of the exchange binance, one of the other huge crypto exchanges in the world, um uh at first. They were like arguing about it. It’S at first, they were like they were, they had animosity and then binance was like okay, we’ll bail you out, because these the two founders of these exchanges actually do know each other and they’ve been. You know they’re both in the same sphere and binance said we’d bail, you out, but then they backed out leaving.
You know: Sam begman freed uh in in Dire Straits and many coins. Many crypto coins uh lost a huge amount of value, including Solana and uh, and that’s basically like the super super tldr of the situation. As far as I understand it. As far as my understanding a couple just little juicy details – and this is alleged but allegedly on this – but as far as maybe standing goes, he said that he was not leveraging or like gambling with uh users, funds that were inputting stuff into the FTX exchange.
The problem is that FTX was was loaning out, money to Alameda research and then Alameda research was leveraging and gambling with that money, but he was like FTX is not going to do this right. He recommended the money to another group, so technically right he’s like technically they’re, not doing it but they’re doing it. They’Re they’re live yeah. There’S like okay. Were there some Degrees of Separation that somehow makes it okay and there’s a lot of things that you would expect a League of Legends player to to do in this story? Yeah, yeah um. I guess the main question one of the yeah.
Exactly get them drag him! Um uh one of the questions that this kind of brought up for me, I guess was like people have been talking about cryptocurrency and like regulating it for so long and obviously that kind of goes against. I mean, like you, guys, brought up the Tweet earlier, that I thought was hilarious from Jeff geerling just being like. It has never made sense like the whole idea.
The whole point you would get into cryptocurrency is to have a decentralized currency and then, if, when you put it in an exchange, it’s just like what what’s the benefit. If now, it’s just centralized now it’s just different money. I think I can kind of answer that.
Actually it’s it’s people that don’t care about that aspect. Um they want it as a monetary vehicle. They want something that they can effectively gamble with uh, that’s an investment. They don’t care about. The fact that it’s decentralized, they don’t care about any of the the features of the different coins. They know they’re not into the technical aspect of it at all. Um.
They just go okay. Well, the line has gone up for a while uh and then it went down and I’m gon na buy the dip. And then it’s gon na go up and I’ll sell it again.
Yeah so they’re not worried about taking off exchange or the decentralized aspects, and then obviously there are tons of people that do care about those. But I think a lot of the people on exchanges are people that see the Super Bowl ads and whatever else they see the line going up and they hear about billionaires that are made off of crypto and they’re like okay I’ll buy some and then they leave It on the exchange because they’re not they’re, not Technical, and they don’t care about those yeah and to me I mean that’s the main, because, like I every time we talk about cryptocurrency, I feel a bit bad because way back in the early 2000s. You know, and people were talking about oh or before then I forget, I thought it was like early 2000s when this stuff really or like 2011 or something um. You know it wasn’t a scam really back then, like people actually were trying to. You know they had some like libertarian ideas about finances and the whole goal was yeah about government control, speculating yeah, which is like you know, I’m not a Libertarian, but I can understand that as a as a political ideology.
You know you’re, like hey, that we think the government should have less say in what we do with our money and how we, you know what we’re allowed to do, and so, let’s make these cryptocurrencies and like we’ll free people, especially in in areas of the world Where you know there are really oppressive governments, it would give some sort of freedom to people to do the things that they want destabilization yeah so like when you go all the way back. The idea of cryptocurrency was I’m sure some people were in it just because they thought they could get rich, but for some of them no doubt it was like a noble goal could be and and for a considerable amount of people. It still is.
I I just don’t think those are the people that largely got screwed over by this. Oh for sure. So, let’s go over by this are speculators and people that are in it to make that money. You know yeah yeah and some people are pointing out in the chat that, like those people do still exist, and you know that’s true of course.
Of course, there are people who are still involved in the in it because they have a hope that it has. It could improve uh Society in some way, but I think that, like that’s the funny thing with these centralized exchanges, it it allowed uh it allowed the the Bad actors who are in on the thing in on things early to leave normies holding the bag. It’S like. Oh, we got you all hyped up for this stuff and then we got your investment and now we’re gon na get out, while the getting’s, good and you’re screwed. That’S one of the roughest things about crypto is there’s been so many bodies on the path you know.
Um, this is just another one of those scenarios where, like uh, the people that I know that are really into it and they’re doing it properly. I’M certain they weren’t pushed by this uh other than the fact that a lot of different cryptos took a hit right. Yeah um yeah but like but like they didn’t, lose their coins. Their coins may have lost USD value, but they didn’t lose their coins right. It’S still.
What do you mean uh with the you’re saying with the collapse of this exchange? Oh right, because they didn’t get hacked or anything, it was just the value Tanked there was. There was well okay, no, oh! Maybe it was on FDX. I think they lost their coins. What I’m saying is people that don’t deal with exchanges because they’re like no I’m into the decentralization right yeah sure have it on cold wallets stuff like that those people didn’t lose their coins physically um right, but they might have lost some value or not.
I don’t know it depends on what coins they’re in um, but it it just. It makes the whole space look gross when this type of stuff happens, and I think that’s something that a lot of crypto people have had a bit of a hard time either accepting or understanding – or I don’t know this whole time. Uh is, I think, the reaction by a lot of the hardcores when stuff like this happens. Is it owned Noob.
You should have been on a cold wallet which fair to a certain degree um, but as much as you want to react that way, as as long as this type of stuff happens, it’s I don’t think it’s gon na hit the type of market adoption that they Want it to no um, so .