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Quantumfreakonomics  1yr ago (text post)   Edited 1yr ago   5249 thread views

FTX is Rationalism's Chernobyl

You may be familiar with Curtis Yarvin's idea that Covid is science's Chernobyl. Just as Chernobyl was Communism's Chernobyl, and Covid was science's Chernobyl, the FTX disaster is rationalism's Chernobyl.

The people at FTX were the best of the best, Ivy League graduates from academic families, yet free-thinking enough to see through the most egregious of the Cathedral's lies. Market natives, most of them met on Wall Street. Much has been made of the SBF-Effective Altruism connection, but these people have no doubt read the sequences too. FTX was a glimmer of hope in a doomed world, a place where the nerds were in charge and had the funding to do what had to be done, social desirability bias be damned.

They blew everything.

It will be said that "they weren't really EA," and you can point to precepts of effective altruism they violated, but by that standard no one is really EA. Everyone violates some of the precepts some of the time. These people were EA/rationalist to the core. They might not have been part of the Berkley polycules, but they sure tried to recreate them in Nassau. Here's CEO of Alameda Capital Caroline Ellison's Tumblr page, filled with rationalist shibboleths. She would have fit right in on The Motte.

That leaves the $10 billion dollar question: How did this happen? Perhaps they were intellectual frauds just as they were financial frauds, adopting the language and opinions of those who are truly intelligent. That would be the personally flattering option. It leaves open the possibility that if only someone actually smart were involved the whole catastrophe would have been avoided. But what if they really were smart? What if they are millennial versions of Ted Kaczynski, taking the maximum expected-value path towards acquiring the capital to do a pivotal act? If humanity's chances of survival really are best measured in log odds, maybe the FTX team are the only ones with their eyes on the prize?

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I have no idea what you're talking about and a quick googling only tells me something about a hacked cryptocurrency platform. What does that have to do with rationalism or EA and why should anyone care?

The main person behind the FTX situation is Sam Bankman Fried, a very influential donor and prominent figure within the Effective Altruism movement. His exchange blew open due to his financial crimes and the movement he is tied to is taking heat. He allocated millions into Effective Altruism while embezzling from his exchange. What is currently happening is a Bernie Madoff level collapse. A company that had ads with Larry Davis on the Super Bowl this year is imploding overnight and all it's customers are turbo fucked.

Thanks!

https://youtube.com/watch?v=WHgGSeNY7Dw

Here's a good recap of it so far. There's a lot more that has happened since but it's not settled yet.

I appreciate the breakdown of what happened, and man, Changpeng Zhao is right now living the best life according to Conan:

To crush your enemies, to see them driven before you, and to hear the lamentations of their women.

All the shade he's throwing on FTX and SBF, and now I understand why he first issued and then withdrew that letter of intent about buying/taking over FTX - it was to steady the market before people started a run on Binance, and to point up that Binance was okay, was strong, and had no problems unlike FTX. Smart guy, his strategy seems to be working (so far).

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