Let’s move on from the FTX crash and back to basics

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Experts are calling the collapse of the FTX exchange the end of cryptocurrency and related venture capitalism. But is not. Some of them anointed Sam “SBF” Bankman-Fried “The King of Crypto,” then summarily murdered the king. But in reality, cryptocurrencies never had a king. The end of FTX may mark the end of Americans using unregulated exchanges, and it certainly is the end of the exchange’s native tokens, but the crypto itself hasn’t changed one bit.

Actually, the FTX collapse it’s a symptom of a deeper problem, which is the “profit at any cost” mentality of traditional finance. Despite all the mumbo jumbo paid to FTX as a regulated entity, at the end of it all, the exchange fell into a profit-driven fraud like many of its traditional counterparts. The stain left by FTX has no more to do with actual crypto than Enron had to do with actual oil in the ground.

That brings us to SBF and its roots in quant trading firm Jane Street. SBF was a quant trader who asked why he would ever use a decentralized exchange and then answered his own question about mishandling billions in client funds.

However, SBF did not fail due to its background. Warren Buffett, who is not a fan of cryptocurrency, has an oft-repeated quote that applies here: “You only find out who’s swimming naked when the tide goes out.” Turns out SBF had no trunk in those turquoise Bahamian waters. He miscalculated the risk he was taking or ignored it entirely, over-leveraging the FTT (his own company’s loyalty point disguised as a $4 billion market cap store of value) and lost big on that bet.

Related: 5 reasons why 2023 will be a difficult year for global markets

It is time for us as the crypto industry to drop the 10x mindset of looking to make huge profits and focus on the fundamentals that brought so many of us into this world. Crypto was never about the next meme coin or the next x-to-earn app, and it’s absolutely not about minting your own tokens to fund risky business practices. It was about financial self-sovereignty and cutting out the middlemen.

It is time to return to this maxim.

Crypto is not a game of exponential gains and speculative gambling. Crypto is all about recapturing the 3% rent that the financial services industry demands from businesses and consumers around the world, on a daily basis. Crypto is all about programmability and exploring which thousands of smart developers do when you give them an honest API for money.

The promise of cryptocurrency is not just about profit: it is a system in which access to financial services is not determined by geography, race, gender, or creed. It is a system free of intermediaries who extract dollars from our pockets at every turn, and where greedy players cannot treat our life savings as if they were their funds at the roulette table. By embracing FTX, we’ve just found a new player to get behind.

Crypto winters are always a turning point for digital assets. While winters destroy value and decimate lives, each winter also leaves us with the legitimate innovations of the last bull cycle. We can choose to let speculation and trading continue to drive our industry, or we can work to disrupt credit card companies, destroy payday lenders, and bank the unbanked.

We may continue to be obsessed with personality, or the adults in the room may finally stand up.

It is time for us, as an industry, to mature our processes, systems, profitability expectations and our objectives. There is a trillion dollar industry waiting to be created, reshaping the global financial system. Financial infrastructure and business software may not be all that exciting to some, but it is the marginal efficiencies that will eventually bring cryptocurrency to every household in the world, one penny per transaction at a time.

Related: Binance’s victory over FTX means more users are turning away from core exchanges

JPMorgan’s recent entry into DeFi is a notable silver lining to this whole cloud. JPMorgan did not rush into cryptocurrency to make multi-legged option bets. They have many ways to earn money through trading. No, its first foray was into a chain lending pool, using a low-cost, high-speed network like Polygon to show how, in the near future, you won’t need data centers, mainframes or landlines to function. sophisticated financial transactions – you only need the blockchain. Regulated public entities such as JP Morgan are demonstrating that Trading system it can be updated in a reflective, compliant, and auditable manner.

It’s time we focused on a future where sophisticated businesses using sophisticated software and processes cut the middlemen out of online transactions. A future where people can borrow money at the best price +1% instead of the abusive rates charged by banks. A future where people get paid every second of the workday via a smart contract instead of once every two weeks.

The industry is ready. Sophisticated tools exist to monitor and account for your assets (instead of using local business systems with back doors). There are forward-thinking operators who can design compliant fund-flow models and auditing practices to ensure digital assets remain secure as use cases grow. There are best practices for portfolio management and for custodians who are legally required to protect your funds and not lend them to others for unhinged transactions.

The industry is ready to mature, and if we really want others to opt out of the current broken system and embrace digital assets, it’s time we mature with it.

white pat is the CEO of Bitwave, a back-office digital asset platform that offers accounting, finance, and tax services. He previously founded and served as CEO of companies, including Synata, an enterprise search engine, and worked as chief architect at Cisco. He has a degree in computer engineering and computer science from the University of Southern California.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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