crypto, bad actors, innovation, and inflation
People often mistake kindnesses for weakness. That is not the case at all.
The FTX fiasco is just another reminder that centralization, lack of transparency, and missing regulation in ‘crypto’ is just another tradfi fraud. I was being lazy on another very good service but is also centralized. I got off my butt and moved my holdings to my ledger, except what I need for short term transactions. The lesson: defi is good and strong, and don’t be lazy!
Brian Armstrong on All-In Pod nailed the summary of SBF today. Very clear line was crossed when FTT was used to bail out Alameda. No board, no oversight, no regulations on tokens as securities, youthful hubris, “altruistic” donations to political parties...long way to go for CEX regulation and de-grifting the space.
Especially kindness and empathy towards those hurt
I often think we've lost the "honor system" where there is competition and free will but it's guardrails are some sense of integrity or at least loyalty to a social contract or a quality of product . I don't know if we ever had it. The past is glorified as a time a place more honorable but I wasn't there. Is it a myth? True? The advancement of libertarianism and instantaneous news from too many sources broke it ( lol , showing my beliefs, sry) ?
But then I read the last paragraph in your newsletter. And I think that's it. American business culture has been practicing/advocating a no integrity style that's driven by money/growth being the only metric of success . And it's become it. That's not a knock against capitalism, I don't think. I think it's a knock against the pursuit of money being the only objective measure. It should be a metric, or a goal, but not the only one.
There's obviously a core of folks that had parallel goals beside making money in the crypto market, but I think those goals got watered down so much that they had no impact. Is that preventable process? Or is it inevitable when there's enough zeros ? This is where I think culture ( both big and small) has a great impact on businesses. The culture determines the honor system.
For context I'm in a healthcare industry ( physical therapy ) that getting eaten up by PE. So this play between money/growth vs quality product is always on my mind because the culture in healthcare was balanced more on the quality product side and is moving towards money/growth side in a hurry and across the board. Which may sound weird for a sector that has not for profit hospitals as a big player but is the reality anyway. Example of process: There's a quality product so let's grow it. They practice growth strategy. They become growth strategy. Money determines amount of growth. They practice more emphasis on money as only metric because of forces in maximizing both growth and money. At some point the actual product becomes growth and money, that's what they ( they being normal human beings, not villains) start planning around. Are they selling an actual product, sure, but it has little to do with most of the decision making at this point because of this process.
So I worry of the parallels. That the opportunity of making bukoo ( spelling?) bucks can water down the original intent. I worry the process of becoming what you practice is always the case . So when the money/growth of PE/VC replaces integrity, or decision making around an actual product, with practicing a growth/money strategy then the result is a forgone conclusion?
I don't know if anything of that makes sense. But I'm worried about it none the less. I really like your newsletter btw. Thanks!
Love the quotes, Kyla! :)
World's mean, people are mean, and there are more mean, bad actors than good but one way life comes to equilibrium is by making mean people fail and just like economy, life also comes back to equilibrium, with too much demand, supply has to go up (naturally/artificially), with too much evilness, kindness has to go up in tandem, thus excess kindness is exploited by mean, bad actors (SBF, FTX, Almaeda, case in point).
I totally resonate with Vitalik, this kind of fraud cuts deeper because it was covered with so much pretend, got so many people (best of the best SV folks) to buy their story & had bad intentions. In the end, they died but unfortunately took every innocent person who believed, and once again proved that the system is rugged!
Skepticism stemming from logic & natural skepticism has a night & day gap. Crypto did challenge the status quo, people in crypto who're building a permissionless world did challenge the world to think different, that's the gutsiest thing, but crypto will have to deal with natural skepticism of people who believed in the idea/narrative of mean people, that's a deeper wound.
Read this the other day (http://paulgraham.com/mean.html). Do read if you get time!
Will buy the subscription plan soon. Thank you very much for being so kind in sharing your progress, thoughts, and vulnerabilities with us <3
Well said Kyla! You recaps are so great and also appreciate linking the Notion doc tracking everything happening with FTX.
in my experience, there reward for practicing kindness and thoughtfulness is a better feeling in one's gut and a good rep among one's peers
Another beautiful verbal and written experience from Kyla. Educational, inspirational and uplifting to me. I have many favorite excerpts relating to kindness as a practice and these thoughts should somehow be woven into both children's books and those in highschool so that they remember these wonderful truisms and thoughts. Thanks for your relentless thoughtfulness and brilliant insights.
That was a refreshing read. I like the idea behind asking the question “what would a better system look like?” We are seeing the fight (that’s what it feels like now) to answer that question play out before our eyes. What a time to be alive.
Can you say something about: how much of a factor stocks is bouncing back up (in response to ostensibly lower than expected inflation and expectations of Fed softening) going to be in pushing the Fed to raise rates higher... because we're going to spend that extra cash. (?)
And yes there were signs --> https://app.hedgeye.com/insights/122943-marc-cohodes-ftx-is-dirty-rotten-to-the-core-hedgeye-investing-s?with_category=17-insights