Like many crypto Twitter users, I spent too much time watching FTX news last week. I've been paying attention to the revelations, rolling my eyes at disclosures about company culture. It's a collective ritual to express anger and doubt, and understandably so.
Looking deeper into the catastrophe, we see its fragmented horror. Zooming out, we see the in-house psychiatrist prescribing the designer a dope. Of course, there is also the main incident, the misinvestment of client funds. Zooming out, we see SBF lobbying in Washington for strict regulations, like the DCCPA (Digital Commodity Consumer Protection Act) he advocated, that would protect centralized exchanges and harm real DeFi.
We can't just keep our heads down and say good morning to each other as we eat popcorn, mourn, rage, support each other, and get on with our projects. We have to pause, take a breath, and consider that this moment is a turning point for the entire industry.
We live and breathe this space every day, and we can keep tabs on every twist and turn of lies, fraud, and liquidity crises that have brought down companies from 3AC to FTX. Outside the bubble, our friends and family heard the news, muttering to themselves while washing the dishes: I know crypto is a scam! A shell game scam of a rich man destroying the planet. I can't wait until they make this whole scam illegal.
What people need to remember is that, starting with Satoshi Nakamoto's white paper , cryptocurrencies were never designed to make people rich. It was designed to set us free.
Cryptocurrency is used as a currency with the promise and freedom of an autonomous, decentralized exchange of value. Its promise began with Bitcoin and has deepened and broadened with the development of blockchains such as Ethereum, which are essentially meant to be distributed virtual computers. Blockchain offers autonomy, privacy, and security, and in the hands of a decentralized community, it presents the opportunity to extend the inherent human self-sovereignty to the global digital arena.
This is a valuable and important technology. It brings us many good things - royalties on smart contract execution for creators, fully transparent decentralized transactions, and true digital ownership. It helps those who are marginalized and do not have equitable access to banking services to participate in the digital economy. This technology will provide a lot of powerful things in the future, such as secure, private zero-knowledge identity proofs - without the need to disclose information to governments and regulators. In a world where we are becoming the "data cows" of big tech companies, blockchain technology offers an unbiased solution. What the technology offers is not a casino, a surefire investment, or another field to be monopolized and occupied by an oligopoly.
The FTX debacle was an opportunity for reflection and rectification. There are too many builders creating Ponzi schemes, liquidity traps and scams. We cannot technically take them off-chain, but as a community we can recommit to the norms and culture embodied in Satoshi Nakamoto’s white paper.
Just last week, Mastercard, Wells Fargo and Citigroup launched a 12-week digital dollar pilot . This test will not be done in the real world, but with simulated data. A central bank digital currency could offer some of the benefits of cryptocurrencies, namely convenience and fast settlements, but the risks are clear: the currency would be censorable, meaning that anyone's wallet or currency could be hacked at the behest of its controllers. Prohibited use.
This prospect terrifies me. On the face of it, this seems cool enough to deter thieves, scammers, criminals and terrorists by cutting off funds. But that requires trusting that the government won't use such tools to crack down on behaviors and groups it doesn't like. It is unrealistic to believe that any entity (let alone a country) has the power to directly control our money when research has repeatedly demonstrated systemic bias in organizations such as the police.
But countries will continue to try to rein in cryptocurrencies. While attacking the technology, they will cite serious and real problems in the encryption culture. To defend this technology, we must change the culture.
We all like to say that bear markets are for building. We need to prioritize how to expand the adoption of cryptocurrencies in the real world - be able to use USDC in Apple Pay (note that USDC is a censorable token), securely use NFTs as access passes through services such as Tokenproof, It's easier, cheaper, and safer to delegate NFTs securely using services like delegate.cash, or to spend cryptocurrencies directly as money.
There are many actors across the globe who are tackling this task. For example, El Salvador has adopted Bitcoin as its official currency. Unfortunately, even this approach has its flaws, as it is based on rising numbers. The numbers did not go up, and now El Salvador is signing a free trade agreement with China, which has agreed to buy El Salvador's foreign debt.
So how do we encourage mass adoption without price increases? Of course, I have no answers - just some questions and thoughts.
One of the things I've been thinking about is the circular economy . It's a concept that emerges from the philosophy of systems thinking, where entities like companies take an approach to materials management to ensure that as much material as possible is reused, recycled or otherwise put back into production.
Circular economy adopters, including large corporations and successful companies, can use blockchain to track materials to ensure they are managed and reused efficiently. From here it’s just a short step to adopting cryptocurrencies as units of account and using them in day-to-day operations – from company cafeterias to mass purchases.
This can be scaled up little by little, especially if companies, cities, institutions, and eventually even countries prioritize doing business with other entities that are doing the same thing.
There are also many local projects that can take advantage of decentralized digital currencies. Some cities have instituted local soft currencies to encourage people to spend within their own neighborhoods, offering various incentives and discounts to initiate and encourage this desirable activity. There is no reason why municipalities should not use a stable, well-backed cryptocurrency for this purpose.
As individuals in the space, we can use the momentum of this moment to re-establish the norms when cryptocurrencies were invented — security, transparency, community, education, and social change. These are not in conflict with the goal of protecting consumers and the ability to fight crime and sanction bad actors.
We can vote with our feet and wallets (“voting with our feet” refers to the flow of capital, talents, and technology to administrative areas that can provide better public services), and participate in projects that uphold these values. We can also organize as a community to call for higher standards of accountability for the platforms, infrastructure services and tools we use every day.
Many people join this field in search of opportunity and fortune. This is very understandable - the nature of the society we live in means that the pursuit of profit is a survival strategy. But the reason for the price increase should reflect the utility and promise of blockchain technology, not casino logic.
In the chaos following the FTX debacle, it would be one of the greatest tragedies if countries implemented regulatory responses that actually protected giant, opaque centralized exchanges. Bills such as the US DCCPA cannot prevent another FTX incident from happening. KYC regulations are unlikely to deter crime any more than existing mechanisms. What will help everyone is regulations that protect DeFi and put in place transparency standards for disclosing assets and liabilities, on-chain open source code with strong security reviews, protections and clear risk education for individuals and communities involved in the space .
It also involves profound cultural and political change in governments—no more collecting our human data and using it to control us. Our rights to privacy and liberty are not about ideology. They are too important to align with conspiracy theories or pre-existing political agendas. Various ideologies have pro- and anti-cryptocurrencies members, but the decentralization movement has the potential to transcend ideology.
Right now, when the average person on the street thinks of cryptocurrencies, they think of scams and hackers. It’s up to us to emphasize the truth of another narrative, the way cryptocurrencies are making the world a better place. The field is so full of energy, optimism and enthusiasm, I know we can make it happen. We need to put more effort into telling good stories, just like we do in finding the latest alphas.
I keep thinking about the FTX debacle and the livelihoods that have been destroyed by other debacles from Luna to 3AC to BlockFi. People with disabilities, unbanked families from the "Global South" (used mostly to refer to low- and middle-income countries, mostly in the Earth's South), communities and businesses around the world entrust their life savings to these august leaders , mainly because they believe it is safe. We are not yet at a point where everyone can confidently self-custody their funds, but we will. What can we do together to get closer to this?
cryptopotato
Beincrypto
Darren
Coinlive 
Nell
Cointelegraph