Ethereum Co-Founder Vitalik Buterin Discusses FTX Collapse — Says 'Centralized Anything Is by Default Suspect'
Ethereum co-founder Vitalik Buterin says many people in the Ethereum community see the FTX collapse “as a validation of things they believed in all along: centralized anything is by default suspect.” However, he warned that automatically downgrading every single thing former FTX CEO Sam Bankman-Fried believed in “is an error.”
Vitalik Buterin on FTX Meltdown
Ethereum co-founder Vitalik Buterin shared his thoughts on the failure of cryptocurrency exchange FTX and former CEO Sam Bankman-Fried (SBF) in an interview with Bloomberg, published Sunday. FTX filed for Chapter 11 bankruptcy on Nov. 11. Buterin told the news outlet:
What happened at FTX was of course a huge tragedy. That said, many in the Ethereum community also see the situation as a validation of things they believed in all along: centralized anything is by default suspect.
The Ethereum co-founder emphasized that blockchain-based and decentralized finance (defi) protocols work “flawlessly.” He stressed the importance of putting one’s trust in “open and transparent code above individual humans.”
Buterin cautioned in a tweet last week: “The ‘centralized anything is evil by default, use defi and self-custody’ ethos did very well this week, but remember that it too has risks: bugs in smart contract code. Important to guard against it.”
In a different tweet, the Ethereum co-founder warned:
Automatically downgrading every single thing SBF believed in is an error. It’s important to actually think and figure out which things contributed to the fraud and which things didn’t.
Buterin also commented on the collapse of stablecoin terrausd and cryptocurrency LUNA, now called luna classic (LUNC). While noting that “crashes like that are on the one hand necessary for the ecosystem,” he stressed that on the other hand, “I really wish that it happened when terra/luna was like 10 times smaller.”
In an interview with the Straits Times, published Sunday, the Ethereum co-founder warned about Singapore’s approach to crypto regulation. He stated that the city-state’s “willingness to make a distinction between blockchain usage and cryptocurrency is like one of those weird things … The reality is if you don’t have cryptocurrency, blockchains that you’re going to have are just fake and nobody’s going to care about them.”
What do you think about the comments by Ethereum co-founder Vitalik Buterin? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.