Author and producer John Oliveron Sunday, addressed the state of cryptocurrencies as Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) in his show “Last week tonight.“
What happened: The focus this time was on the series of high-profile and expensive busts in the sector, with the most notable FTXa cryptocurrency exchange that collapsed at the end of last year and cost billions of dollars.
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The arrest of FTX’s billionaire founder, Sam Bankman-Fried, accused of defrauding investors was just the tip of the iceberg, according to Oliver, with many other dominoes falling in the crypto world.
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Oliver went on to investigate the collapse of three companies – Terra, Celsiusand FTX – each “based on the promise that they would replace part of our financial system.”
He reminded viewers that each cryptocurrency is simply something that “someone with a laptop computer created,” and its value is based on people’s trust in the person or group that created it. The story of each of the three companies was one of trust gained and ultimately squandered.
Taking Do Kwon: Launched in 2018 by South Korean entrepreneur Do Kwon, Terra was promoted as a stable cryptocurrency with each unit supposedly always equal to one US dollar, guaranteed by another cryptocurrency called Luna. Oliver compared this to someone offering to exchange your money for “blorps” – a supposedly valuable token that they created themselves and promised to always be worth $1, using a “special algorithm”.
Oliver noted that the concept may sound complicated and silly, but many are enticed when they hear the term “special algorithm” as it creates a perception of greater knowledge and expertise.
Oliver’s conclusion: “The truth is that in a financial system where the only real currency is trust, fraudsters are going to thrive […] We should realize that right now, the most important thing you can really do with crypto is to gamble with more crypto. This is still a casino.”
Price action: At time of writing, ETH was trading at $1,823, down 2.14% in the last 24 hours, according to Benzinga Pro.
Read more: Bitcoin, Ethereum, Dogecoin Decline Ahead Of FOMC Meeting: Analyst Predicts Deja Vu, Expects Apex Crypto To Hit $30K Soon
