The traditional media quickly reverted to the tired and misguided accusation that all cryptocurrencies are cryptocurrencies. scam It follows the demise of FTX, Voyager, Celsius and BlockFi last year. But the problems faced by these failed companies were not due to blockchain. Instead, it was due to criminal behavior, greed, poor risk management, novice business processes, arrogance, and malicious behavior. All of this happened off-chain.

So, the “Bitcoin is dead” mantra has been revived, with widespread media declaring the top cryptocurrency “dead.” 27 times Interestingly, this is down about 50% from the previous year.

This is real world, not virtual currency.

Two of TradFi’s banks, Silvergate and Silicon Valley Bank, are now on the verge of bankruptcy, and the ripple effect on the crypto industry is most noticeable in Circle’s depeg of USDC, which has billions of dollars deposited in Silicon Valley banks. It feels like

Again, the factors currently affecting the cryptocurrency industry are not due to on-chain failures. Instead, these are traditional financial industry issues that have only affected cryptocurrencies due to government resistance to adopting distributed ledger technologies such as blockchain.

In fact, TradFi and legacy financial markets have hit the crypto industry harder than any other sector over the past two years. Blockchain solves many problems, but what was particularly evident during the FTX demise was that while off-chain centralized exchanges had a negative impact, DeFi loans related to contagion It operated as it should and liquidated without impacting the underlying DeFi protocol itself. DeFi has worked where TradFi has failed.

Same thing is happening again. Each time a bank is cracked down on Tether, it has survived and managed tens of billions of dollars in the last 12 months without fault. Similarly, despite countless investors skeptical of Tether’s reserves, the blockchain record of USDT’s supply has been proven time and time again.

However, Circle’s USDC may meet a different fate as the reserves stored in traditional banks are no longer available. As a result, their USDC on-chain token will continue to function correctly, but will not have access to the underlying assets in the physical world.

This is not a cryptographic failure.

This is not a blockchain failure.

This is the failure of the traditional banking system.

TradFi Dinosaurs

Satoshi invented Bitcoin after the 2008 global financial crisis. He may have worked on this project before, but this incident clearly spurred his motivation.For example, in 2009 directorhe wrote:

“The fundamental problem with conventional currency is all the trust it takes to make it work. The central bank must be trusted not to devalue the currency, but the history of fiat currency is that It’s full of betrayal of trust.”

We talk about the possibility of zk-proofs at ETHDenver, worry about bridging issues, and try to improve the abstraction of accounts, but TradFi falls into the same rudimentary mistakes over and over again. We are concerned that an interconnected global distributed ledger network of Turing-complete systems could be improved. Banks running ATMs on Windows XP, on the other hand, are making billions of dollars before they collapse, using split reserve banks and risky investments.

Back in 2008, everyone said banks were “too big to fail,” but all we did was kick cans, rarely getting arrested for financial crimes. So while we may be waiting for Sam Bankman-Fried to go on trial, to this day he could be hundreds of white-collar criminals working for TradFi or TradFi-adjacent businesses. .

Capitalist greed and an outdated financial system are poised to unleash a snowballing economic crisis that began more than 15 years ago.

Blockchain will fix this

Blockchain fixes this, even at the risk of being labeled a mere “cryptoblood”. Of course, blockchain won’t cure all ailments, but it’s very good at solving financial problems. Secure, proven and immutable.

problem? It is secure, proven, immutable and cannot be abused. If all of FTX’s financial activities were done on-chain, FTX would never have reached a position like this. SBF. Instead, he used his own in-house technology, sprinkled with QuickBooks, to address his alleged criminal needs.

Likewise, governments cannot waste money, take bribes, or misappropriate funds on-chain. I’m not blaming any particular government, but it’s naive to assume that in 2023 all governments will always operate with 100% efficiency and 100% integrity. A well-designed blockchain can do this and even maintain the privacy of private transactions in a trustless environment by integrating zero-knowledge technology.

not the time to be afraid

After the announcement of the Silvergate liquidation, the crypto fear and greed index is back in the “fear” category and could fall further following this weekend’s USDC event.But now is not the time to fear the crypto industry I do not think. The infrastructure being built surpasses the traditional financial industry at every level, and the usefulness of on-chain transactions exceeds what cash can do.

Now is not the time to fear cryptocurrencies. This is a scary time for FIAT.

I often hear people talking about crypto “use cases”. Where appropriate, we will discuss the countless applications of blockchain technology across numerous industries. However, the most important use case is to replace the current outdated pseudo-digital financial system.

My heart goes out to those who lost their savings during this banking crisis, but it is a reminder that the current system is broken and it is time for change.

new financial system

It won’t happen overnight, but don’t give up on technology that can help build a better, fairer, more inclusive world.

I entered the world of cryptocurrency and used the privileges afforded by my loving family in the UK, private school and attendance at top UK universities to make a real difference. For the most part, the current financial system worked for me, but I was in the minority.

As I write this, it makes me laugh that some may believe that I am stuck in a cryptocurrency “cult”, indoctrinated into a web of meme coins and Ponzi schemes. But it’s ironic.

A cipher has no leader. There are no centralized leadership, loyalty, demands, or shy requirements for criticism. However, cryptocurrencies hold firmly to beliefs such as decentralization, economic freedom, self-control, security and transparency. However, if you think you need to belong to a cult to hold onto these beliefs, then you probably belong to a cult yourself.

In fact I fully accept that the entire crypto industry is basically in beta right now – and in my view – this is the most exciting beta of all time. Screw Chat GPT; It covers security-backed interconnected EVM/IBC landscapes.

Posted in: Recommendations, Opinions

By Jules

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