Tuesday, November 15, 2022

The Heart of "Crypto"

Crypto weirdos are always trying to differentiate between "blockchain" and "cryptocurrency" and "exchanges" and "stablecoins" and "centralized" and "decentralized" and, yes, I suppose it matters whether it's a clip or a magazine, or whether AR stands for "assault rifle" or "Armalite" (it's assault rifle). Your nerd languages should be respected. But the heart of guns is most of them exist for the purpose of killing humans, and the heart of crypto is The Box.
Perhaps the most inexplicable thing about the gross lack of diligence was that Bankman-Fried wasn’t shy about what he was doing. In an April interview with Bloomberg’s Matt Levine, Bankman-Fried, then worth $20 billion and “the world’s richest 29-year-old,” was asked to explain the concept of yield farming: a strategy for earning massive windfalls that Bankman-Fried had reportedly mastered at his homegrown trading firm, Alameda Research. In his answer, he chaotically described how crypto yields could be squeezed from a metaphorical black box that “does literally nothing.”

That should tell you all you need to know. If it doesn’t, consider Levine’s reply: “I think of myself as a fairly cynical person. And that was so much more cynical than how I would've described farming. You're just like, well, I'm in the Ponzi business and it's pretty good.”