As cryptocurrency rose in popularity during the pandemic, new converts bought into the idea that crypto would not only make them rich, but would usher in imminent revolutions across art, finance, politics, and gaming. Cryptocurrency caught the zeitgeist through figures like FTX CEO Sam Bankman-Fried, who only two years later would be convicted of one of the most calamitous acts of financial fraud in U.S. history.
During his meteoric rise, Sam Bankman-Fried outflanked idealists in the movement like Vitalik Buterin, who sought to build fairer, more democratic systems through Ethereum. Bankman-Fried pursued a growth-obsessed, by-any-means approach to crypto, which proved seductive to those who just wanted to get rich. But this Silicon Valley-like approach also drove the creation of a spate of high-risk financial instruments that mirrored those of the 2008 financial crisis. Accused of misleading investors and mishandling funds, Bankman-Fried became a target of prosecutors.
Now, Cryptomania unfolds the tumultuous twenty months inside this male-dominated, overhyped industry that led to its downfall. Drawing on exclusive reporting and an extensive network in the global NFT community, Andrew Chow chronicles the battle for crypto’s soul, and the human toll of its economic meltdown—from the conmen and eccentrics driving the bubble to the victims caught in its burst.
![Andrew Chow (portrait by Moshe Zusman)](https://www.skeptic.com/michael-shermer-show/images/Andrew-Chow-by-Moshe-Zusman-4x.jpg)
Andrew R. Chow is a correspondent for Time who covers technology, culture, and business. He has written four Time cover stories, including about the impacts of the AI corporate arms race and a prescient profile of Vitalik Buterin months before the 2022 crypto crash. He has previously written for The New York Times, Pitchfork, and NBC News. His first book is Cryptomania: Hype, Hope and the Fall of a Billion-Dollar Fintech Empire.
Shermer and Chow discuss:
- What is money?
- Fiat money without a gold standard
- Cash, coins, and credit cards
- Bitcoin and crypto currencies as the next step in financial transactions
- Crypto’s utopian philosophies
- What triggered crypto’s pandemic-era bull run.
- How the popularity of Non-Fungible Token (NFTs), served as a gateway to crypto, helping to fuel its rise—and then became one of its victims
- How NFTs were originally about the democratization of artistic creation and had the potential to help artists across the globe
- Sam Bankman-Fried’s (SBF) backstory, his interest in “effective altruism” and the “earn-to-give” philosophy, and his early career at a Wall Street trading firm where he developed his obsession with taking huge risks
- Did SBF believe his lies? Was he self-deceived?
- How SBF used his autistic-like behavior to convince people he was a misunderstood genius
- Risk-neutral behavior and crypto
- Effective altruism, utilitarianism, and deontological ethics
- Comparisons of SBF with Elizabeth Holmes
- SBF’s arrest and dramatic trial. Rather than plea guilty and take a deal, Sam, true to his risk-taking nature, gambled it all and took his case to trial
- The parallels between crypto and the problematic financial system it was meant to replace
- While crypto promised to dislodge predatory middlemen, all it did was create new ones, with less oversight and many of the same painful fees
- How the 2022 crypto crash closely mirrored the 2008 financial crisis. The 2008 bubble had been caused by risky mortgage loans repackaged into financial derivatives. The 2022 crypto crash was likewise brought down by hidden, interconnected chains of leverage, in which hedge funds, exchanges, and lenders played dangerous money games because they thought the market might keep expanding forever.
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This episode was released on August 10, 2024.