FinTech is Dead, Long Live FinTech

Bill didn't feel he had the expertise to share new insights on the FTX affair. Never stopped me.

FTX is nothing short of corporate malfeasance in a poorly regulated industry, and since Bill had posted, Sam Bankman-Fried was arrested and charged with fraud and conspiracy. The whole affair has rippled through the cryptocurrency ecosphere and will likely lead to a much higher regulatory framework than the industry was hoping for.

Cryptocurrencies have had an interesting 2022 starting with the Superbowl ads Bill was rallying against. FTX even sponsored baseball umpires, sports arenas and fortune cookies including this prescient one

Those were in the glory times of FinTech, i.e. early 2022. Even before FTX had its problems, we had the Three Arrows Capital bankruptcy and the TerraUSD stablecoin collapse. Bitcoin lost over 60% of its value during the year. 

Of all the problems we've seen with cryptocurrency, it's never because of the crypto. I'm still shocked how the person or people called Satoshi Nakamoto got it mostly right on the first try. They did fail to account for the energy needed to mine bitcoin once bitcoin became valuable, but on the other hand who could have predicted bitcoin would become so valuable. Certainly not me.

I still don't see much of a market for most cryptocurrencies beyond speculation and illegal activities, though we have much of both. Nevertheless it feels weird in 2022 that we still use physical bills and coins. I am hopeful for a CBDC (Central Bank Digital Currency), not a stablecoin tied to a dollar, but US currency itself just in digital form.

We now use digital tickets for most events and transport. Even driver's licenses and passports are moving digital--they only gets scanned anyway. There are a few remaining uses of paper--property titles, legal wills, social security cards, birth, death, marriage and divorce certificates. Perhaps we could use blockchain or even centralized databases to eliminate these as well.

Blockchain could also be helpful to track our digital goods, so we can use the music, movies, books, games, virtual clothes and accoutrements on different platforms without having to buy them twice. (HT Siva)

The most important use of FinTech will be for those who have the least, those who pay large fees to have a bank account, cash a paycheck or send money to family overseas. FinTech can be a great democratizing tool, if we use it that way and not just as another get rich scheme.