Number Go Up – Marginal REVOLUTION

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Number Go Up, Zeke Faux’s account of the wildest excesses of the crypto boom (2020-2022), is highly entertaining from page one:

“I am not going to lie,” Sam Bankman-Fried told me.
This was a lie.

Faux describes the scene on a yacht off the Bahamas owned or rented by Brock Pierce, the child actor who starred in the Mighty Ducks and who co-founded Tether, a stablecoin that Faux is on the hunt to uncover its origins and backing:

A crypto venture capital fund manager–wearing a mock souvenir T-shirt from convicted pedophile Jeffrey Epstein’s private island–joked about a scam that another yacht guest was running. A crypto public relations man offered what he called “Colombian marching powder” to a young woman. A small group of people dancing told me that they were philosophy students who’d come to the Bahamas to intern for FTX’s Bankman-Fried.

On Razzlekhan, the rapper, entrepreneur, and former World Bank economist-intern, who with her husband managed to pull off the largest heist in world history, some US $4.5 billion! (well, technically they stole  ~$69 million worth of bitcoin in 2016 but they couldn’t sell it very easily and by the time they were caught in 2022 it was worth $4.5 billion):

As a performer, Razzlekhan was both hypersexual and aggressively unappealing. She alternated jokes about diarrhea and sex with boasts about her edgy business practices. Her signature move, if you can call it that, was to throw up her hand with her fingers split into a “V” stick out her tongue, and say “Razzle Dazzle!” Then she would make a loud phlegmy cough.

Ironically, the US government now holds the recovered coin, making it one of the largest holders of bitcoin in the world.

On the collapse of Three Arrows

Court documents showed that the fund’s holdings included a portfolio of NFTs. Among them were a Bored Ape with a vaguely racist “sushi chef headband” and a pixelated image of a cartoon penis, called a CryptoDickButt, which, incredibly, was worth about $1,000 at the time.

It’s not all fun and games. Faux also travels to the Philippines to witness the bust of Axie Infinity game miners and to Cambodia to what investigate what amounts to slave labor camps run by Chinese gangsters.

One doesn’t get a favorable impression of crypto from Number Go Up but in fact one doesn’t learn much about crypto at all. Indeed, Faux’s book isn’t really about crypto it’s about the rise and collapse of a bubble and the consequent madness of crowds. It’s an old and familiar story. Not that different from the tulip mania (see the picture below), the dot-com boom, or the house flippers and mortgage boom of 2006-2008 (see the Big Short for similar stories of excess). The madness of crowds is fascinating, fun, and good for a morality tale but it doesn’t really tell us much about the underling asset. Tulips never amounted to much, the internet did great, house prices are back up. Crypto? Jury is still out. Thus, I was entertained by Number Go Up, but didn’t learn much.

Still, I agree with Faux on this, don’t put your money in Tether.

image of artwork listed in title parameter on this page

Wikipedia: Allegory of the Tulip Mania. The goddess of flowers is riding along with three drinking and money weighing men and two women on a car. Weavers from Haarlem have thrown away their equipment and are following the car. The destiny of the car is shown in the background: it will disappear in the sea.

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