I’ve listened to SBF on several podcasts, and I haven’t gotten the impression that he thinks all cryptocurrencies are useless. I would recommend this one in particular https://clearerthinkingpodcast.com/episode/038. I’m personally skeptical about the value of cryptocurrencies (relative to their current valuation), and my opinion on some things differs from SBF’s, but I find him to be one of the few people who work in the crypto space that articulate balanced and insightful views on crypto.
Also, SBF did not use the work “Ponzi.” That was Matt Levine’s interpretation. I think what SBF was describing would be better characterized as a speculative bubble, since “Ponzi” implies an intent to defraud. A well intentioned founder might have a crypto-based idea they are excited about. If investors/speculators bid the value of their coin/token to unreasonable values, that doesn’t mean the founder has devised a Ponzi scheme. Note that SBF said “ignore what it does or pretend it does literally nothing” about the “box,” which implies that he thinks most crypto projects are at least trying to do something.
I would respectfully recommend editing your post where it says that SBF admitted cryptocurrencies are a Ponzi scheme. I believe strongly that it is not accurate as stated.
As for current EA spending vs. wealth, I think we are in a situation where, as a rough guess, 40% of EA wealth is in crypto, and current spending is 2-3% of wealth. If the crypto portion were mostly wiped out, current levels could be sustained by donors who are less invested in crypto. In the event of a crypto crash, fewer new projects would be funded, and the bar for continuing to fund existing projects would be higher, but I think non-crypto donors would step up to continue to fund projects that are going reasonably well. In the meantime, there is benefit from funding some new things and learning about what works well. If current spending were 5% of wealth, and if it seemed unlikely that new EA-aligned donors would emerge, I would be more concerned.
This is like being the owner of a casino, which is itself a perhaps benign thing. Let’s say poor uneducated people lose billions of dollars of wealth at said casino. Regardless of the casino owner’s admitting that his business is a speculative bubble or a ponzi scheme or whatever, he’s still profiting off of peoples’ losses at said casino.
most crypto projects are at least trying to do something.
But whether something amounts to anything is the true question, right? There are so few uses for cryptocurrencies, and nearly none of the people that invest in them are truly invested in the mission of decentralized finance.
as a rough guess, 40% of EA wealth is in crypto
Woah...if 40% of wealth were wiped out, that would have no impact on investment? I think we have different assumptions about the elasticity between wealth and donations (my prior is that it’s fairly elastic). This is an empirical question, but I would tend to be more biased in favor of over-estimating the negative effects of wealth depletion on investment.
I think whether crypto is a bubble—whether crypto is a ponzi scheme—are irrelevant. The key is that crypto is an extremely volatile asset that is now a significantly sizeable portion of EA wealth, and has negative optics implications (all of which you agree with), and when it falls, has negative implications on future funding flows (which you disagree with).
On future funding flows, I specifically said “[i]n the event of a crypto crash, fewer new projects would be funded, and the bar for continuing to fund existing projects would be higher,” so I don’t think we disagree about that. But I disagree with the “lots of good projects (would) have to be ended” statement in your original post.
Woah...if 40% of wealth were wiped out, that would have no impact on investment? I think we have different assumptions about the elasticity between wealth and donations (my prior is that it’s fairly elastic).
This Open Phil blog post is interesting in this context. (Though note in this case the underlying wealth change was, I believe, not driven by crypto and instead mostly by the bear market for tech stocks.)
I’ve listened to SBF on several podcasts, and I haven’t gotten the impression that he thinks all cryptocurrencies are useless. I would recommend this one in particular https://clearerthinkingpodcast.com/episode/038. I’m personally skeptical about the value of cryptocurrencies (relative to their current valuation), and my opinion on some things differs from SBF’s, but I find him to be one of the few people who work in the crypto space that articulate balanced and insightful views on crypto.
Also, SBF did not use the work “Ponzi.” That was Matt Levine’s interpretation. I think what SBF was describing would be better characterized as a speculative bubble, since “Ponzi” implies an intent to defraud. A well intentioned founder might have a crypto-based idea they are excited about. If investors/speculators bid the value of their coin/token to unreasonable values, that doesn’t mean the founder has devised a Ponzi scheme. Note that SBF said “ignore what it does or pretend it does literally nothing” about the “box,” which implies that he thinks most crypto projects are at least trying to do something.
I would respectfully recommend editing your post where it says that SBF admitted cryptocurrencies are a Ponzi scheme. I believe strongly that it is not accurate as stated.
As for current EA spending vs. wealth, I think we are in a situation where, as a rough guess, 40% of EA wealth is in crypto, and current spending is 2-3% of wealth. If the crypto portion were mostly wiped out, current levels could be sustained by donors who are less invested in crypto. In the event of a crypto crash, fewer new projects would be funded, and the bar for continuing to fund existing projects would be higher, but I think non-crypto donors would step up to continue to fund projects that are going reasonably well. In the meantime, there is benefit from funding some new things and learning about what works well. If current spending were 5% of wealth, and if it seemed unlikely that new EA-aligned donors would emerge, I would be more concerned.
I mean, ok, to be more technical SBF is “charging commissions to people in the ponzi and trading against them”.
This is like being the owner of a casino, which is itself a perhaps benign thing. Let’s say poor uneducated people lose billions of dollars of wealth at said casino. Regardless of the casino owner’s admitting that his business is a speculative bubble or a ponzi scheme or whatever, he’s still profiting off of peoples’ losses at said casino.
But whether something amounts to anything is the true question, right? There are so few uses for cryptocurrencies, and nearly none of the people that invest in them are truly invested in the mission of decentralized finance.
Woah...if 40% of wealth were wiped out, that would have no impact on investment? I think we have different assumptions about the elasticity between wealth and donations (my prior is that it’s fairly elastic). This is an empirical question, but I would tend to be more biased in favor of over-estimating the negative effects of wealth depletion on investment.
I think whether crypto is a bubble—whether crypto is a ponzi scheme—are irrelevant. The key is that crypto is an extremely volatile asset that is now a significantly sizeable portion of EA wealth, and has negative optics implications (all of which you agree with), and when it falls, has negative implications on future funding flows (which you disagree with).
On future funding flows, I specifically said “[i]n the event of a crypto crash, fewer new projects would be funded, and the bar for continuing to fund existing projects would be higher,” so I don’t think we disagree about that. But I disagree with the “lots of good projects (would) have to be ended” statement in your original post.
fair. let’s agree to disagree.
This Open Phil blog post is interesting in this context. (Though note in this case the underlying wealth change was, I believe, not driven by crypto and instead mostly by the bear market for tech stocks.)