Crypto Is a Luxury Good

Crypto Is a Luxury Good

About 20 minutes into his latest interview with Bloomberg, crypto’s favorite entrepreneur Sam Bankman-Fried said something revealing about the industry: Crypto is mostly a shell game.

“You know, where do you start? You start with a company that builds a box and in practice this box, they probably dress it up to look like a life-changing, you know, world-altering protocol that’s gonna replace all the big banks in 38 days or whatever. Maybe for now actually ignore what it does or pretend it does literally nothing. It’s just a box,” Bankman-Fried said.

Crypto, specifically “yield-farming,” or the generative process of turning tokens into more tokens, is filled with machines that print money, or grant voting rights over money printers or promise future returns through things like airdrops. You put a token into the “box,” you take some out, he said. And anyone can make their own box.

The exchange – prompted by a question from Bloomberg financial maven Matt Levine for a “sophisticated” explanation of yield-farming – went on for a bit longer. “Sophisticated investors” were mentioned, but the definition stayed pretty rudimentary. (“You’re just like, well, I’m in the Ponzi business, and it’s pretty good,” Levine said, summing up.)

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