site banner
Quantumfreakonomics  1yr ago (text post)   Edited 1yr ago   5214 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?

20
Top Bottom Old Controversial Comments
Jump in the discussion.

No email address required.

I have spent a lot of my time in neckbeard libertarian circles, so I have heard a lot about cryptocurrencies in the past 10 years.

I made an early decision that I would not touch them with a bargepole for the foreseeable future. No subsequent event has made me regret that decision.

I like my investments like my taste in paintings: safe, traditional, and matched to my low time preference.

No subsequent event has made me regret that decision.

If you had bought bitcoin or ethereum in 2012 you would likely have much greater wealth now. So this seems a very odd statement, unless you don't care at all about money

I care about money, but I also care about risks.

Think of it with ex post/ex ante. I don't regret my ex ante decisions in 2012, because I couldn't have rationally anticipated that (thus far) I would be making money buying bitcoin.

Similarly, if I'd put the right numbers into a lottery ticket, I could have won all sorts of lotteries, but I don't regret not doing that.

Same here, and I DID put money into Crypto back then, and it DID pay off in numerous ways, but my risk tolerance was low so I never made any bets I wouldn't have been willing to make at, say, a poker table at a casino.

People don't realize how many crises early crypto endured, and how many points it hit where any normal person would have pulled out their money either because they wanted to take profit on their absurd gains or they lost too much to stomach.

I don't know how many people got wiped out by losing private keys or from sketchy exchanges collapsing or bad altcoin bets in the last 6 years. The deeper you got into the space (beyond just BTC and ETH) the higher chance you'd get burned HARD.

So ex post it is entirely possible to have zero regrets about not jumping on the train. Ex post I am happy with how well my Crypto career paid off (legitimately the main reason I could buy my house when I did) but also well aware it could have gone differently had I decided to put in more money on riskier bets.

I have almost entirely released all my Crypto holdings and put more money into tangible things where the risks are much more straightforward.

Good points. And to make it clear, I was joking when I said above that I felt "superior" to anybody. My aversion to crypto, like my aversion to gambling, is a subjective preference. It is as subjective as my taste in art, which is why I mentioned that in my first post.

As it happens, I am very sympathetic towards crypto as a political mission (non-gov cash is cool and anonymous non-gov cash would be very cool) but that's different from my investment choices.

I was joking when I said above that I felt "superior" to anybody. My aversion to crypto, like my aversion to gambling, is a subjective preference. It is as subjective as my taste in art, which is why I mentioned that in my first post.

I mean, when I've been perusing the Crypto subreddits the past few years, a sense of superiority is hard to avoid when you see newbies making the same mistakes over and over again, whilst you've learned your lesson (hopefully by observation and not experience) in the early days. And I'll speak up and be like "Guys I've seen this exact scenario develop before and here's what you should watch out for" only to be drowned out by "FUD, WHEN MOON? NGMI, HODL HODL HODL!"

As it happens, I am very sympathetic towards crypto as a political mission (non-gov cash is cool and anonymous non-gov cash would be very cool) but that's different from my investment choices.

Bingo. I'm crypt-optimist but at some point during the NFT craze I realized how hard 'we' had lost the plot.

What is this place?

This website is a place for people who want to move past shady thinking and test their ideas in a court of people who don't all share the same biases. Our goal is to optimize for light, not heat; this is a group effort, and all commentators are asked to do their part.

The weekly Culture War threads host the most controversial topics and are the most visible aspect of The Motte. However, many other topics are appropriate here. We encourage people to post anything related to science, politics, or philosophy; if in doubt, post!

Check out The Vault for an archive of old quality posts. You are encouraged to crosspost these elsewhere.


Why are you called The Motte?

A motte is a stone keep on a raised earthwork common in early medieval fortifications. More pertinently, it's an element in a rhetorical move called a "Motte-and-Bailey", originally identified by philosopher Nicholas Shackel. It describes the tendency in discourse for people to move from a controversial but high value claim to a defensible but less exciting one upon any resistance to the former. He likens this to the medieval fortification, where a desirable land (the bailey) is abandoned when in danger for the more easily defended motte. In Shackel's words, "The Motte represents the defensible but undesired propositions to which one retreats when hard pressed."

On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.


New post guidelines

If you're posting something that isn't related to the culture war, we encourage you to post a thread for it. A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a submission statement. A submission statement is required for non-text sources (videos, podcasts, images).

Culture war posts go in the culture war thread; all links must either include a submission statement or significant commentary. Bare links without those will be removed.

If in doubt, please post it!


Rules


Recommended Posts And Communities

Recommended Realtime Chats