> there really is such a thing as a person with a lot of book-learning but less common sense than a sea slug
I don't even think SBF had the book-learning, just intellectual arrogance. "I don’t want to say no book is ever worth reading, but I actually do believe something pretty close to that. I think, if you wrote a book, you f---ed up, and it should have been a six-paragraph blog post."
The craziest thing to me is that when he was saying things like that noone in the mainstream media was questioning him. The FT had a very flattering lunch interview with him shortly before his demise. It was embarrassing how they were portraying him.
Honestly my completely outside the valley impression is that VC operates a lot on pedigree and connections.
SBF has an impeccable pedigree, so the thought that he was a Michael Fenne type was never even considered. Why would he lie, when he could live an honest life and be fabulously rich and comfortable (Jane St, wealthy connected parents, etc)
Maybe not the mainstream media but I feel like a lot people, especially in the Bitcoin community, were suspicious of him. He just screamed grifter to me. I never really bought his arbitrage story either and wouldn't be surprised if that was not his first scam.
The arbitrage story definitely seems bogus. People have been aware of difference in bitcoin price across Asia since like the beginning of bitcoin - I don't think it is any huge billion $ opportunity.
Now Tether on the other hand.. I would not be surprised if that has a lot to do with it.
I was running an arbitrage bot well before he claims to have started arbitrage and even back then, it was competitive enough that there weren't tons of money to be made, especially considering all the risks and costs involved. In those days, a relatively common scam involved setting up an investment scheme that promised high returns thanks to "arbitrage trading" (but which was really just a ponzi scheme). I wouldn't be surprised if he was involved in something like that.
Maybe you did, but check the subreddit for bitcoin and cryptocurrency for posts before the FTX collapse. The prevailing sentiment, I recall, was that FTX was less scammy than competitors such as Celsius and Voyager, because the rewards for staking on FTX wasn't quite as absurd as the others. I think a lot of crypto investors thought Sam was the real deal, and that's one reason why they were able to attract so many customers.
But you had Zeke Faux, a specialist, going there, looking at SBF screen and seeing nothing too special too.
Blame the "mainstream media" all you want but as long as we refuse (for good reason) to give audit power to journalists, mainstream or specialist, you'll keep reading positive pieces about frauds if they stay hidden purposefully.
I'm not sure why you would have wanted to NYT to destroy every company it interviews just for the sake of it. Wouldnt they need proof ? And how do you get them, when they're hidden by a conspiracy ?
Plus, the police in the US, Hong Kong and the Bahamas found nothing and waited for Coindesk to publish a leak by CZ, a competitor, to start looking...
I say that because at the peak of the crypto fever I couldnt distinguish SBF from, say, the CEO of Kraken, and I suspect it's hindsight convincing you something could have been done.
I don't suggest to "destroy" any company, or to say they are guilty of things without proof.
The FT did an impressive investigation of Wirecard, for example. There is a difference between destroying a company and making a couple of common sense questions instead of parroting whatever the interviewee wants. Some basic journalistic practices. It is really not so much to ask.
Agreed but we only ask that after the conspiracy was revealed and honestly it's so mindblowingly stupid it's hard to imagine anyone could have thought they used QuickBooks or just thad no accountant.
Again you re asking someth that had been done several times: many people did dig a bit deeper and couldnt find the Alameda hole or the real balance sheets, or the parents siphoning millions and all that stuff that took even time for prosecutors to find.
The role of the media isnt to uncover fraud I think, it's to give you a chance to expose one if you know one. If nobody was willing to talk, what s a journo gonna do?
Carreyrou, a personal hero, had tons of witnesses coming to him for instance.
> The craziest thing to me is that when he was saying things like that noone in the mainstream media was questioning him.
Well, what's the difference between an unhinged, drug-addled loony and an eccentric visionary genius?
The difference is having $26 billion.
Why not call him out on what seems like bullshit? That bullshit has convinced "informed" tech investors like Softbank and Sequoia Capital. And elsewhere at the same time, Andreessen Horowitz is investing $450 million in ape jpegs.
This is absolutely gourmet, Grade A, top quality wagyu bullshit.
He came very close to getting away with it all. If the investments had panned out a little differently he would have been able to stay solvent and no one would have really noticed the regulation breaking.
Right, and assumes he didn't abandon the Kelly Criterion for the mentality of "keep playing double-or-nothing even when you win":
>>Bankman-Fried’s error was an extreme hubris that led him to bite bullets he never should have bitten. He famously told economist Tyler Cowen in a podcast interview that if faced with a game where “51 percent [of the time], you double the Earth out somewhere else; 49 percent, it all disappears,” he’d keep playing the game continually.
Exactly. Evading disaster doesn't make someone like this reconsider their decision making process and act smarter next time, it shows them that they're a goddamn genius who can do no wrong.
> Well, what's the difference between an unhinged, drug-addled loony and an eccentric visionary genius?
One big factor is who your parents are. SBF coming from an upper-class background, that tilts the scales towards eccentric genius. After all, we know that the children of these families are all extremely special.
To be frank, the value proposition of those investments was never what the companies claimed they did but how much money they could bring in before going bust. And of course some of those companies were also useful by fostering acceptance of ideas those investors benefit from: for example, a big part of the "blockchain" and "smart contracts" narrative was privatization (or "democratization") of government functions (e.g. managing land deeds, educational certifications and other claims).
Not to mention that a big part of investing in start ups is just ape jpegs with extra steps (i.e. "greater fool" theory).
It is mainstream culture to not question (at least temporarily) financially successful businessmen. Financial success in the eyes of many must mean, that they are doing something right. But that "something" quickly is left out and the conclusion becomes "doing all things right". Basically ethics is supplanted by how capitalism works.
It is not brought up too often, that often one of the most important differences between them and the viewer of mainstream media is, that this person is vastly more ruthless with regards to ethics.
> Musk claims to be self-made; he moved to Canada at age 17 with $2500 and worked his way up from there. For a while he supported himself by cutting logs, Abe Lincoln style. Nobody paid for his college and he took out $100,000 in debt. Musk’s father invested $28,000 in his first company, but Musk dismissed this as a “later round” and claimed he was already successful at that point and would have gotten the money anyway. The total for that round was $200,000, so Musk’s father’s contribution was only about 15%.
> Obviously there’s still some sense where he benefited from a privileged upbringing or whatever, but in a purely business sense he’s mostly self-made.
The difference being Elon has a history of multiple successful business and products. And didn't defraud anyone in the process. (Note he is still a narcissistic asshole but he is a successful narcissistic ass and we generally value competence higher than personality)
Think that's crazy? Read what HN commenters were saying about FTX before the collapse. There were skeptics, for sure. But plenty of people here who thought sam was smart, good at business, and more prudent and above board than other crypto CEOs. Many users here have a blindspot when it comes to detecting bullshit. Sam reminded us of ourselves, so we believed him.
If you like that, you should hear what he had to say about Shakespeare:
"I could go on and on about the failings of Shakespeare ... but I really shouldn't need to: the Bayesian priors are pretty damning. About half the people born since 1600 have been born in the past 100 years, but it gets much worse than that. When Shakespeare wrote almost all Europeans were busy farming, and very few attended university; few people were even literate—probably as low as ten million people. By contrast there are now upwards of a billion literate people in the Western sphere. What are the odds that the greatest writer would have been born in 1564? The Bayesian priors aren't very favorable." [Going Infinite, p29]
Now I get that Shakespeare doesn't appeal to everyone and is definitely an acquired taste, but to judge his work on probability when the work itself is right there to judge on its own merits is like the joke about an economist who sees a hundred dollar bill on the street and says, "If that were a real bill, someone would already have picked it up."
He also dismisses the "plot twist" in Much Ado About Nothing (when Beatrice asks Benedick to kill Claudio) as "illogical" and the province of characters who are "one-dimensional and unrealistic" because "I mean, come on—kill someone because ... his fiancée is cheating on him?" As if no actual human being had ever killed out of jealousy, when it's usually one of the main motives for murder. It's like he's visiting from another planet or something.
That's really insightful into how this guy works.
He's judging everything off probabilities to an egregious degree.
He's also utilitarian, which doesn't really offer a foundation for any kind of morality because there's no provision against the ends justifying the means.
As I mention in a thread below I'm using "book-smart" as a concise idiomatic way of saying "educated and talented in a traditional academic field", such as mathematics in this case. Kind of unfortunate that I had forgotten that SBF is not actually a big reader. But he did graduate from MIT: perhaps they'll let him hang his diploma on the wall of his cell.
He seems smart and excellent at everything he sets his mind to. He just opted to set his mind to math and things that relate to math. That's an easy way to grow up and become a jerk.
But on the other hand, I can think of a few books that really might have helped him. The Emperor's New Clothes, and also Extraordinary Popular Delusions And The Madness Of Crowds (dated now, still a good read).
I don't even think SBF had the book-learning, just intellectual arrogance. "I don’t want to say no book is ever worth reading, but I actually do believe something pretty close to that. I think, if you wrote a book, you f---ed up, and it should have been a six-paragraph blog post."