Greed, Lies and FTX: Is Crypto a Force for Good or Evil?

Despite the headlines, the industry still has a lot to offer the world, says the Giving Block's Pat Duffy.

AccessTimeIconDec 23, 2022 at 7:48 p.m. UTC

Pareidolia is a phenomenon where people see a pattern where there isn’t one (like a face on the moon). The tendency to look for patterns where there are none is helpful in the wild: It’s better to see illusory predators than to miss the ones that are out to kill you. When it comes to thinking clearly, however, it has its drawbacks.

Association fallacies are everywhere. From a red herring in a debate to the guilt-by-association that smears public figures, association fallacies skew your strongest-held opinions. At best, it’s why you dislike a rival quarterback. But more seriously it’s the nightmare fuel that allows otherwise reasonable people to resist social, political and technological progress.

Pat Duffy is the co-founder of The Giving Block. This op-ed is part of CoinDesk's Crypto 2023.

Crypto has been more victimized by association fallacies in recent history than any other technology – scandals including Mt. Gox, Bitconnect and now Sam Bankman-Fried and FTX taint a whole industry, whatever its part in the catastrophe. Take the instinct to see nefarious patterns where they don’t exist and combine it with default bias (preferring the devil you know to the devil you don’t) and you begin to see why the adoption curve for cryptocurrency is so fragile.

In 2021, crypto was at an all-time high and it finally felt like people were starting to see crypto as a force for good. Now, one bad actor is on the verge of undoing more than a decade of Web3 progress. The actions of one have overshadowed the incredible impact that crypto has had on society, and the number of lives that it has saved since its inception.

Crypto has saved people suffering from the fiat crisis in Lebanon, Venezuela and China – providing a way for the average person to buy food, water and medical supplies necessary to survive. Crypto is sparking crucial conversations around banking the unbanked and empowering women in places such as Afghanistan to control their own financial accounts without male guardians.

In the charitable sector, crypto is one of the fastest-growing donation methods, with the most generous donors of any investment community. Blockchain-based decentralized IDs are saving refugees from losing their life savings or being separated from their families. Crypto is leading the way on privacy and transparency simultaneously, shielding human rights advocates from retribution by tyrannical regimes, while creating a fully transparent Bitcoin blockchain that has lived for more than a decade without a single record being altered.

FTX was bad. But crypto is one of the greatest forces for good on the planet. If we allow the narrative to continue on this path, the association fallacy will snowball, systematically erasing any memory of more than a decade’s worth of positive crypto impact. So, what can we do about it?

Stop hiding

We can start by abandoning this strategy of sticking our heads in the sand and waiting for this to blow over. Talk to anyone in crypto right now and they’re in a holding pattern. Everyone’s worried about putting their foot in their mouth, so the only stories people see are negative stories about former CEO Sam Bankman-Fried (SBF) and FTX. This might be a good strategy for not putting our feet in our mouths, but it’s not doing anything about the feet that are kicking us while we’re down. If you’re not speaking up right now you’re a part of the problem.

Say something

Continue showcasing all of the good that crypto is doing around the world. Typically, the holiday season is full of heartfelt stories about the impact of crypto. Crypto is still saving lives every single day, but those stories aren’t being told the same way they were prior to FTX’s collapse. If the crypto community can come together to tell these stories they are less likely to be forgotten.

Do something

It’s one thing to discuss the positive impact that crypto has made on the world, it’s another to put your money where your mouth is and use your crypto for good. Though crypto philanthropy is such a small part of the crypto story, its impact has been felt globally. You don’t have to donate much, but every single donation shows the world that crypto can make real, tangible changes to this world.

From our side, at The Giving Block we’re going well beyond that, starting “The Crypto is Good Project,” which will focus on compiling data, profiles and reports on the ways in which crypto is a force for good. If you’re in crypto, now is the time to take a little time and build a use case that matters.

If the crypto community seizes this moment to shed light on the bright side of crypto, we’ll put FTX behind us and go back to changing the world. If we don’t, people will continue to look at us and see SBF. That’s our choice right now. I’m hoping more people make the right one.

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Pat Duffy

Pat Duffy created The Giving Block with co-founder Alex Wilson in 2018, developing solutions that charities, universities and other nonprofits use to fundraise cryptocurrencies like Bitcoin.