Bitcoin will survive failure of ‘any giant’ in crypto, says Samson Mow
The collapse of FTX has triggered a remarkable drop in the price of Bitcoin (BTC), but that by no means means that BTC can be destroyed by failing cryptocurrency firms, according to Bitcoin proponent Samson Mow.
The cryptocurrency industry is still seeing the wave of FTX contagion play out, and it is likely to face more similar crashes in the near future, Mow said in an interview with Cointelegraph.
According to the executive, FTX contagion could be part of the Terra ecosystem collapse, which caused a domino effect on the industry, including major crypto lenders like Celsius and Voyager.
“More things like this will continue to happen in the crypto space because all these projects are worthless houses of cards,” Mow predicted. He added that FTX’s failure was “easy to see coming” because of FTX’s relationship with Alameda.
“A general rule of thumb is that 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 JAN3 CEO said.
Mow also argued that industry efforts to prove credibility — including exchanges that are increasingly releasing proof of reserves — don’t mean much unless they prove commitments. “Any system that can be gamed will be gamed,” he declared, referring to players faking their reserves by shuffling funds between each other just before producing a proof.
“Then you have to factor in the fiat side – which would require an audit, but that might not be helpful either as FTX also had an auditor,” he noted.
As FTX contagion continues to spread across the industry, one can expect worst-case scenarios for some of the world’s largest crypto firms. Addressing the question of whether Bitcoin would survive a hypothetical event where crypto giants like Tether or Binance collapse, Mow expressed confidence that Bitcoin is designed to defeat any problem, saying:
“Bitcoin will overcome any problem simply because of its design and the irrefutable need for good money in human civilization. A giant’s failure would only be a temporary setback, just as Mt. Gox’s impact is no longer relevant.”
Despite likely setting the crypto industry back a few years, the FTX collapse has done “wonders” for the Bitcoin industry in terms of the growing use of self-storage and hardware wallets, Mow stressed. “Unfortunately, most people cannot learn from the mistakes of others, only from their own suffering,” he added.
Related: FTX will be the last giant to fall this cycle: Hedge fund co-founder
Exec also suggested that Bitcoin newcomers are likely to make the same mistakes in the future despite the industry showing the biggest vulnerabilities of centralized exchanges during Bitcoin’s very first crash back in 2011. He stated:
“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 money. Rinse and repeat.”
Formerly Head of Strategy at Blockstream, Mow is a big proponent of Bitcoin and founder of game development company Pixelmatic. He is also the CEO of Bitcoin technology firm JAN3, which is focused on promoting Bitcoin and accelerating hyper-Bitcoinization. In April 2022, the firm signed an agreement with the government of El Salvador and President Nayib Bukele to help the country develop digital infrastructure and establish Bitcoin City.
