Ethereum co-founder Vitalik Buterin said the collapse of FTX has illustrated once again that the matter lies in people, not technology.
Ethereum co-founder Vitalik Buterin has spoken out in the wake of the FTX collapse, giving his thoughts and a few positives from one in all crypto’s biggest black swan events.
In a Nov. 20 Bloomberg interview, Buterin said that the collapse of FTX contains lessons for the complete crypto system. He acknowledged that the underlying stability of distributed ledger and also the technology powering the crypto quality economy has not get question. the matter during this instance (and many before it) has been individuals, not technology. Buterin additionally labelled the FTX collapse as a “huge tragedy” however adscititious that it reaffirms the position of the many within the Ethereum community regarding centralization:
“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.”
He added that this ethos includes trusting in open and clear code on top of humans. Over the weekend, Buterin posted a guide to having a “safe CEX” with proof of insolvency.
He said rather than relying solely on “fiat methods” like government licenses, auditors, company governance, and background investigations of individuals running exchanges, the exchanges may produce “cryptographic proofs that show that the funds they hold on-chain are enough to hide their liabilities to their users.
The problems for FTX are understood to own stemmed from the exchange’s use of client deposits for other functions. after a large flow of withdrawal requests came to the exchange earlier this month, it found itself unable to meet withdrawal demand with its current liquidity.
Vitalik Buterin isn't the sole business leader recently speaking out regarding the FTX fallout. On Nov. 17, Binance CEO Changpeng Zhao aforesaid that whereas regulation is critical, it's additional necessary for business players to steer by example.
During the Indonesia Fintech Summit 2022, Zhao said the complete FTX saga is probably going to own set back the crypto business by “a few years,” and can likely see regulators scrutinize the business “much, a lot of tougher, that is perhaps an honest factor, to be honest.”
( Martin Young, Cointelegraph, 2022 )