Greed, Lies, and FTX: Is Crypto a Force for Good or Evil?
Pareidolia is a phenomenon where people see a pattern where there is none (like a face on the moon). The tendency to look for patterns where there are none is useful in nature: it is better to see illusory predators than to miss those out there to kill you. When it comes to thinking clearly, however, it has its drawbacks.
Association errors are everywhere. Whether it’s a red herring in a debate or the guilt-by-association that taints public figures, errors of association skew your strongest opinions. At best, that’s why you don’t like a rival quarterback. But seriously, it’s the nightmare fuel that allows otherwise sane people to resist social, political, and technological progress.
Pat Duffy is the co-founder of The Giving Block. This editorial is part of CoinDesk Crypto 2023.
Crypto has been the victim of more misassociations in recent history than any other technology – scandals such as Mt. Gox, Bitconnect and now Sam Bankman-Fried and FTX taint an entire industry, regardless of its share in the catastrophe. Take the instinct to see nefarious patterns where they don’t exist and combine it with a default bias (preferring the devil you know to the devil you don’t know) and you begin to understand why the curve of Cryptocurrency adoption is so fragile.
Read more: David Z. Morris – There’s Less Money in Crypto, and That’s a Good Thing
In 2021, crypto was at an all-time high and it finally felt like people were starting to see crypto as a force for good. Now a bad actor is about to undo over a decade of Web3 progress. The actions of one have overshadowed the incredible impact crypto has had on society and the number of lives it has saved since its inception.
Crypto saved people suffering from the fiat crisis by Lebanon, Venezuela and China – allowing the average individual to buy food, water and medical supplies necessary for survival. Crypto is sparking crucial conversations around bank the unbanked and empower women in places like Afghanistan to control their own financial accounts without male guardians.
In the charitable sector, cryptography is one of the fastest growing donation methodswith the most generous donors of any investment community. Decentralized blockchain-based IDs are save the refugees losing their savings or being separated from their families. Crypto leads the way in privacy and transparency simultaneously, protecting human rights defends retaliation from tyrannical regimes, while creating a fully transparent Bitcoin blockchain that has lived for over a decade without a single record being altered.
FTX was bad. But crypto is one of the greatest forces for good on the planet. If we allow the narrative to continue on this path, the misassociation will snowball, systematically erasing any memory of over a decade of positive crypto impact. So what can we do about it?
We can start by letting go of this strategy of sticking our heads in the sand and waiting for this to end. Talk to anyone in crypto right now and they’re in a holding pattern. Everyone is afraid to put their foot in their mouth, so the only stories people see are negative stories about former CEO Sam Bankman-Fried (SBF) and FTX. This might be a good strategy for not putting our feet in our mouths, but it does nothing for the feet kicking us while we’re down. If you’re not talking right now, you’re part of the problem.
Keep showing all the good crypto is doing to the world. Typically, the holiday season is full of heartfelt stories about the impact of crypto. Crypto is still saving lives every day, but these stories are not being told in the same way they were before FTX collapsed. If the crypto community can come together to tell these stories, they are less likely to be forgotten.
It’s one thing to discuss the positive impact crypto has had on the world, it’s another to put your money where your mouth is and use your crypto for good. Although crypto philanthropy is such a small part of crypto history, its impact has been felt globally. You don’t have to give a lot, but every donation shows the world that crypto can bring real, tangible change to this world.
On our side, at The Giving Block, we are going much further, launching “The Crypto is Good Project”, which will focus on compiling data, profiles and reports on how crypto is a force for good. If you’re into crypto, now is the time to take some time and build a use case that matters.
If the crypto community seizes this moment to shine a light on the good side of crypto, we will leave FTX behind and start changing the world again. If we don’t, people will continue to watch us and see SBF. It’s our choice right now. I hope more people will do the right thing.
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