SBF

Chapter 35Savior Complex

At the beginning of June 2022, SBF would announce that he had signed The Giving Pledge, an initiative led by Warren Buffett, Bill Gates, and Melinda Gates, by which very wealthy people promise to give their wealth away. CoinDesk quoted his pledge later as saying:

A while ago I became convinced that our duty was to do the most we could for the long run aggregate utility of the world.

Then, on June 22, bitcoin proponent Pierre Rochard would make a forecast on Twitter:

Easiest prediction I'll ever make:

Fiatbrained bozos try fractional reserve banking with #BTC and get rekt

SBF fancies himself to be a savvy JPM, bails out the bozos (u r here)

Which only encourages more bad risk‐taking

SBF needs a bail out, but can't print #BTC

He could have been more civil about it, but you can't fault his accuracy.

To translate Rochard's point: one of the chief services that firms such as Voyager and BlockFi offered was the ability to make deposits of bitcoin and other cryptocurrencies, earn interest for doing so, and also, for those that wanted to, borrow against it as collateral.

The theory, like in any such arrangement, was that it could broker enough deals between lenders and borrowers to make it profitable for everyone. And, like any lender, the hope was to lend out most of what was deposited.

That's what Rochard means by “fractional‐reserve.” Modern banking keeps ...