Crypto.information – Famend actor and writer Ben McKenzie just lately joined OddLodds Bloomberg to share his journey into the world of cryptocurrency, and his candid ideas reveal a skeptical and intriguing outlook. This exploration led to his guide, “Simple Cash,” a dive into the idea of cash, lies, and the distinctive operate of cryptocurrencies.
McKenzie’s foray into crypto started throughout the pandemic when he noticed individuals reap substantial earnings. Regardless of a nasty earlier funding expertise, a good friend’s advice led him to bitcoin (BTC) and additional into the depth of cryptocurrencies.
McKenzie argues that cryptocurrencies do not work like conventional currencies in his guide. To completely perceive the topic, he took half in a free on-line course on blockchain and crypto taught by Gary Gensler, the top of the Securities and Trade Fee (SEC).
Through the podcast, McKenzie expressed concern in regards to the popularization of bitcoin and different cryptocurrencies, suggesting they might be an enormous Ponzi scheme. He in contrast his skepticism to the story “The Emperor’s New Garments”, the place obvious knowledge and recognition disguise an underlying insanity.
The podcast additionally touched on the enchantment of cryptocurrencies, particularly for younger males. McKenzie posited that the subprime mortgage disaster and the following launch of the bitcoin white paper in 2008 created mistrust in conventional monetary techniques, making the concept of a decentralized forex interesting.
Regardless of the enchantment of cryptocurrency as an answer for the unbanked and as a possible wealth creator, McKenzie questioned their authenticity and commodity standing. He famous that the true cash in crypto is way smaller than the inflated market capitalization suggests, typically pushed by hypothesis and leverage relatively than true funding.
Cryptocurrency lending firm Celsius was given for instance as an example this discrepancy. McKenzie claimed that solely 10-15% of the market capitalization might signify actual cash, whereas the remainder is usually speculative and leveraged.
One of many principal considerations with cryptocurrencies is their liquidity. McKenzie identified that abroad exchanges like Binance generate most buying and selling volumes. Nonetheless, the validity of this quantity is unsure as a result of prevalence of fictitious buying and selling (synthetic buying and selling exercise) in unregulated exchanges. The ensuing illiquidity and potential manipulation create market dangers.
Moreover, limitless leverage within the crypto markets is feasible as people can create as a lot cryptocurrency as they want, which might result in market instability. Cryptocurrency change FTX has been accused of making new tokens, borrowing in opposition to them, and manipulating their worth with the washout commerce.
Conflicts of curiosity additionally come up when exchanges subject their tokens or stablecoins. McKenzie highlighted his skepticism about utilizing the USDT stablecoin, questioning its legitimacy and the character of the client relationships concerned. Regardless of doubts and allegations of monetary misconduct, the stablecoin supervisor has managed to keep up its peg to the US greenback.
The writer additionally referred to Binance, one of many largest cryptocurrency exchanges, which has come underneath scrutiny for practices similar to no head workplace and the alleged Tai Chi crafted doc. to distract regulators.
Through the chat, McKenzie described a baffling interview with Sam Bankman-Fried, the CEO of FTX. Bankman-Fried struggled to articulate the advantages of cryptocurrencies and made explicit statements about yield farming within the crypto trade. McKenzie expressed considerations in regards to the lack of trade regulation and confusion surrounding the classification of cryptocurrency as commodities or securities.
The dialog then turned to these affected by volatility within the crypto market. For some, cryptocurrencies symbolize freedom and monetary self-determination. Nonetheless, McKenzie identified the risks of playing habit within the crypto area. He likened the crypto market to a on line casino with no leisure worth, arguing that it’s a zero-sum sport.
In a shocking connection, McKenzie linked the top of on-line poker to the start of bitcoin. The 2 industries share hanging similarities, with the preliminary bitcoin code together with a poker foyer.
When the federal government cracked down on on-line poker, a few of these concerned, similar to Stuart Hogner and Daniel Friedberg, moved into the cryptocurrency trade. McKenzie recommended that there are parallels between the 2 areas, with bitcoin probably seen as a option to facilitate abroad playing.
Furthermore, he observed similarities within the ways and language used within the two industries. Notably, each make use of “neighborhood” and infrequently depend on peer strain. Whereas acknowledging that neighborhood constructing might be a constructive facet of cryptocurrency, McKenzie identified that sturdy communities might additionally type amongst plaintiffs at school motion lawsuits in opposition to fraudulent firms.
Close to the top of the interview, McKenzie mentioned the concept of some individuals pushing an “anti-crypto” narrative. He acknowledged that the decentralization of bitcoin and the direct entry granted to house owners offers some safety. Nonetheless, he additionally identified limitations, similar to scalability points and the environmental influence of excessive energy consumption.
Moreover, McKenzie raised considerations in regards to the usefulness of cryptocurrency for unlawful actions. Simply as it may be used for professional transactions, it may be exploited by individuals with malicious intent.
This text initially appeared on Crypto.information
