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Comment by thrillgore | Hacker News Reader

It continues to baffle me why anyone would want to deal with Crypto if a failure like FTX causes the entire "decentralized" ecosystem to collapse.

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Exchanges and trading firms are not "Crypto". They're human institutions which happen to sit atop cryptocurrency instruments. What we're seeing play out in realtime is what happens when unregulated human institutions come to possess fantastical amounts of wealth -- in short, they go pathological.

"Happen to sit atop" is so far from an accurate accounting of the multi-headed hydra that is the crypto/defi space. Good thing I'm not expecting much in the way of accurate accounting.

It's almost as if the unregulated anti-establishment ethos of crypto allowed this to happen, and allows it to keep happening.

If crypto has an "ethos", it's decentralization and departure from human institutions. The FTX fiasco is the opposite of that.

What percent of crypto activity happens on centralized platforms. 90%? 95%? Whatever the precise number, it's really high.

It's hard to argue that 95% of people in Scotland aren't true Scots.

Around 15%

It's a two-faced ethos, praising decentralization and thumbing its nose at banks while simultaneously entrusting the bulk of its assets to entities that are strictly worse than banks.

> They're human institutions

Anything that involves a person one both ends of a transaction chain inherently has one or more 'human institution' dependencies.

>the entire "decentralized" ecosystem to collapse.

Because it doesn't? While all centralized exchanges are suffering from FTX's collapse, decentralized ones like Uniswap aren't facing any existential risks from it.

Because it doesn't?

In fact, many crypto proponents are happy that these centralized pseudo-banks get all flushed the out.

Claim to be happy. There's a reason "this is good for Bitcoin" is a meme.

And rightfully so.

Competing with centralized entities is hard.

If a person wants an industry to succeed, they will want companies in the industry to behave honestly. And if a company behaves dishonestly, they will want the dishonest company to leave that industry. Why is that so hard to believe?

Because shills exist, who claim something is good when they know it's bad. Typically due to a vested interest, like wanting the industry to succeed. "This is good for Bitcoin" is a meme precisely because these people exist, publicly trying to spin any negative into a positive.

Pretending collapses like FTX don't impact the cryptocurrency space in negative ways is dishonest.

Companies like FTX collapsing do negatively affect the space. But what's even worse is companies like FTX that are irresponsible and haven't collapsed yet. What's a guy to do?

I warned people last year not to use FTX. Now FTX is gone. Please tell me what feelings I'm allowed to feel now that they're finally gone.

Feel however you like. I will continue to feel that most "this bad news is actually good for crypto" claims involve quite a bit of at least motivated thinking and pure shillery at worst.

Because it's easy to convince people of anything if you promise that it'll get them rich quick.

Banks fail, too. See Bear Sterns and Lehman brothers.

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