Last Updated on November 22, 2022 by Bitfinsider
The failure of FTX has resulted in a significant decline in the price of Bitcoin, but Samson Mow, a proponent of the cryptocurrency, claims that BTC cannot be destroyed by failing cryptocurrency companies.
According to an interview with Mow, the cryptocurrency market is still experiencing the effects of the FTX contagion wave, and more crashes resembling this one are probably in the horizon.
The CEO claimed that the Terra ecosystem collapse, which had a cascading effect on the industry and large crypto lenders like Celsius and Voyager, could be a factor in the FTX contagion.
Mow said as a prediction that “More things like this will continue to happen in the crypto space because all of these projects are worthless houses of cards.” Due to FTX’s affiliation with Alameda, he continued, the failure of the company was “easy to see coming.”
According to the JAN3 CEO, “A general rule of thumb is if a company prints a token out of thin air and either sells it to retail, or relies on it as an asset, you should expect them to collapse eventually.”
The industry’s efforts to establish credibility, such as the increasing release of proof of reserves by exchanges, according to Mow, are ineffective unless liabilities can also be demonstrated. Declared in reference to participants fabricating their reserves by moving money around between each other right before presenting a proof, “Any system that can be gamed, will be gamed.”
He continued, “Then you have to factor in the fiat side — which would require an audit, but that may not be useful either as FTX also had an auditor.”
One may anticipate the worst outcomes for some of the biggest crypto enterprises in the world as FTX contagion continues to spread throughout the industry. In response to the hypothetical scenario in which crypto juggernauts like Tether or Binance fail, Mow expressed certainty that Bitcoin is built to overcome any problem, saying: “Bitcoin will overcome any issue simply due to its design and the irrefutable need for sound money in human civilization. The failure of any giant would only be a temporary setback, just as Mt. Gox’s impact is no longer of relevance.”
The FTX crash has certainly set the cryptocurrency industry back a few years, but Mow underlined that it has done “wonders” for the Bitcoin business in terms of the rising popularity of hardware wallets and self-custody. He continued, “Unfortunately, most people cannot learn from the mistakes of others, only from their own suffering.”
The CEO added that despite the industry revealing the worst risks of centralized exchanges during Bitcoin’s initial fall back in 2011, newbies to the currency are likely to continue making the same mistakes in the future. He declared: “Then things will settle down over the next few years, and newcomers in five or six years will make the same mistakes again and lose their funds. Rinse and repeat.”
Mow, a prominent proponent of Bitcoin and the founder of the game production company Pixelmatic, was previously the chief strategy officer of Blockstream. Additionally, he serves as the CEO of JAN3, a company dedicated to advancing hyper-Bitcoinization and supporting Bitcoin. With the goal of helping El Salvador create Bitcoin City and improve its digital infrastructure, the company and president Nayib Bukele struck a deal in April 2022.
Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.