Centralized Entities are not Blockchain

In a competitive market, the race selects for the banks that take the most risks, and this is doubly true for crypto-adjacent middlemen who take your money into a black box, like FTX and Celsius:

The money has to come from somewhere. Issuing yields in a currency you don’t control, such as a stablecoin, is not a smart game unless you are investing in revenue-generating businesses that serve the public, and even then, it’s a gamble that sometimes requires government to step in and print more of that currency. In a bull market, ponzi schemes can keep obfuscating this fact — but as soon as the market turns sour, the yields are impossible to sustain.

This is what I discussed with multiple people on our show, including Richard Heart:

But make no mistake — these companies are not blockchain. They are exactly what blockchain was invented to replace! So given that they’re the opposite of blockchain and decentralization, it’s ironic that their failures have given Web3 a bad name. That’s why we have started to call what we do “Web5”: