Saw this post for the first time after it was linked from one of the recent FTX posts, and wanted to say thank you for having taken the time to write and express these concerns, which clearly weren’t very popular but turned out to be...prescient. I’m a bit frustrated this didn’t get more karma or engagement at the time.
I’m also frustrated that I probably just scrolled past without clicking or considering because it didn’t have that much karma and seemed ‘against the mood.’ It feels important for everyone (like me) who was caught off guard this week to recognize that this was not, actually, unforeseeable. It’s humbling to realize how much work our cognitive biases must have been doing . Anyway, thanks!
Thanks for taking the time to comment. The details of the interaction between Alameda and FTX were very hard to pinpoint. And the timing was such that it was very hard to profit off of the collapse, even if you were very skeptical of cryptocurrencies to begin with. Hence, the whole misplaced discussion on the forum of, “Institutional investors, who have a profit motive, didn’t foresee this. How could we have?” For example, exchanges like Binance have not experienced similar meltdowns.
But to make money, you not only have to be right, but be right at the right time. Imagine you saw the COVID pandemic in 2018 and shorted the market starting in 2018. By 2020 you would be broke and have no more cash.
On the other hand, EA is not trying to make money. So, the EA community doesn’t care about the timing as much as a trader does. EA cares about preparation. If we know that the COVID pandemic is going to happen in 2018, we start preparing in 2018, and when it does happen, in 2020, we are prepared.
Thus, for the EA community, what was really more salient to prediction was the quotation by Paul Krugman:
stablecoins...resemble 19th-century banks,...when paper currency was issued by largely unregulated private institutions. Many of these banks failed, in some cases due to fraud but mostly due to bad investments.
Saw this post for the first time after it was linked from one of the recent FTX posts, and wanted to say thank you for having taken the time to write and express these concerns, which clearly weren’t very popular but turned out to be...prescient. I’m a bit frustrated this didn’t get more karma or engagement at the time.
I’m also frustrated that I probably just scrolled past without clicking or considering because it didn’t have that much karma and seemed ‘against the mood.’ It feels important for everyone (like me) who was caught off guard this week to recognize that this was not, actually, unforeseeable. It’s humbling to realize how much work our cognitive biases must have been doing . Anyway, thanks!
Thanks for taking the time to comment. The details of the interaction between Alameda and FTX were very hard to pinpoint. And the timing was such that it was very hard to profit off of the collapse, even if you were very skeptical of cryptocurrencies to begin with. Hence, the whole misplaced discussion on the forum of, “Institutional investors, who have a profit motive, didn’t foresee this. How could we have?” For example, exchanges like Binance have not experienced similar meltdowns.
But to make money, you not only have to be right, but be right at the right time. Imagine you saw the COVID pandemic in 2018 and shorted the market starting in 2018. By 2020 you would be broke and have no more cash.
On the other hand, EA is not trying to make money. So, the EA community doesn’t care about the timing as much as a trader does. EA cares about preparation. If we know that the COVID pandemic is going to happen in 2018, we start preparing in 2018, and when it does happen, in 2020, we are prepared.
Thus, for the EA community, what was really more salient to prediction was the quotation by Paul Krugman: