Culture Wars/Current Controversies

Is crypto just fraud?

You’ll enjoy this week’s episode with guest Matt Stoller on antitrust politics in the age of Ticketmaster and crypto, whether or not you’re a Swiftie (although, to any Swifties out there in the KK&F listenership, this is your week). From the “Lehman Brothers” of crypto crashing (and what that reveals about the state of crypto more broadly) to the antitrust argument underlying this week’s Ticketmaster fiasco, we’re looking at how the giants of online companies are anything but too big to fail — and when they fail, they fail hard. Watch below:

Matt Stoller has written extensively about monopolies, from his Substack (called BIG — and for a deeper dive into this week’s topics, he’s got a thread entitled “I Told You So”) to his book Goliath: The 100-Year War Between Monopoly Power and Democracy. He brings us into the complex story of FTX’s crash by answering the fundamentals (if you’re looking for an answer to “What is crypto?”, and aren’t we all, head over to 24:26). How a “shitty spreadsheet” caused a massive collapse and uprooted a market with famous, powerful financial backers is the story of the week. Matt situates this story in the greater timeline of crypto, reaching back to the market’s early beginnings in 2009 to the growth of crypto exchanges in the past few years. His takeaway is that crypto, despite the prestige it’s been accorded by many people with available wealth to invest, is a fraud, and the FTX crash is proof of that.

Krystal offers the counterargument to the idea of crypto as a scam: Can’t we apply all of the negatives of crypto to fiat currency? Isn’t it all made-up on some level? Matt argues that the governmental institutions that support fiat currency, as well as its societal usage, draw an important distinction between, say, the dollar and the bitcoin. He also responds to the contention that crypto’s strengths lie in its decentralization and frictionless transfer by making the case for a stronger U.S. banking system in general. There’s nothing necessary or unavoidable about the woes of our financial system, which he traces to corruption. So the problem then becomes: What do we do about that corruption? And what will come from our taking it on?

We hope you enjoy this latest episode of KK&F. Remember that you can listen to it as a podcast tomorrow on Spotify, Pandora, Apple Podcasts, and more.

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