In the future, everyone will be famous for 15 minutes. — Andy Warhol
Crypto is now dying, largely because of SBF’s FTX/Alameda fraud. The crypto venture capital has now gone to AI. This upcoming trial is a first (& perhaps last) for crypto: a high profile criminal case that exposes the entire industry as a Ponzi scheme.
Bitcoin was founded after the 2008 sub-prime loan banking crisis, on the white paper notion that if you do some fancy math & computer programming, you’ve created digital gold. It was a brave new world in finance back then.
People who believe this anti-materialist nonsense don’t understand where money comes from. Money comes from human labor producing useful commodities. Nothing else. Of course, capitalism allows capitalists to monopolize money and use it as a tool of class warfare to exploit the working class. This is how obscene levels of wealth are accrued with massive inequality.
Crypto posits that a digital token can be minted and that it has value, even though there is nothing behind it. Gold is real, and it has use value. Thus it can be used as a store of monetary value, and has been for millennia. Modern governments issue fiat currency, which since 1971, floats on the value of that nation’s economy. Stronger economies have stronger (more valuable) currencies. Since WW2, the US dollar has been the strongest currency, globally.
But in this era of global competition, China & Russia are increasingly unwilling to allow themselves to be shackled to US dollars for international commerce & exchange, especially with its non-US aligned trading partners. Oil is this most prized commodity, and Russia continues to cut back its production & output available on world markets, which is causing gas prices to rise globally. Furthermore, Putin has convinced the Kingdom of Saudi Arabia & Iran to do the same. That worries US military planners.
Joe Biden has been exhausting US strategic reserves just to keep pump prices below $4.00/gallon. Once gas gets above that, American consumer anger increases, as the price of everything goes up.
This affects crypto mining, blockchain storage, processing, etc, as these activities are energy intensive. When electricity prices reach a certain level, bitcoin is no longer feasible. Interest rates have been increased by a hawkish Federal Reserve to cause a recession and weaken the labor market to control worker wage demands.
This macro-economic shift in ruling class policy (from near 0% interest rates for over a decade) has sent crypto into a death spiral. US intelligence agencies are keeping bitcoin alive because they have a use for it, but otherwise there is very little government support for crypto after the FTX collapse in November 2022. That’s why the SEC is now taking a hard line.
The hedge funds have moved into AI for their speculative urges. This is why the writers & actors strike must be crushed so ruthlessly. Venture capital is waiting to use AI in Hollywood to create its own vision, without having to pay actors. Just scan someone’s body and have them sign their likeness rights away, etc.
It’s the same vague concept for these libertarians & capitalists, whether its crypto or AI. Promote it as freedom & the future. Remain indistinct about rosy ideas such as effective altruism, while keeping the operational details secret. Keep all the money.
Everyone wants to get rich. Everyone wants to be famous & cool. This is how it’s pitched, and when so many people are desperate and see no future, this will resonate with a segment of them. The young people who actually believe in crypto are idealists. They lack seriousness of mind, and tend to look for (and settle on) easy answers. That defines the crypto community which less than a year ago held Sam Bankman-Fried as their boy genius savior.