Abhishek Kothari
4 min readNov 22, 2022

Why FTX is Not A Synonym for Crypto Currencies and Decentralized Finance (DeFi) and Lessons From The FTX Collapse

Jimmy Ofisia on Unsplash

“The truth isn’t always beauty, but the hunger for it is.”
Nadine Gordimer

Conflation is Seductive

Over the last few weeks, a lot of my friends have come up to me and predicted the demise of all things crypto. I don’t blame them. All of us live in a matrix that is created and fueled by the media and the media loves conflation.

Conflating the demise of FTX with the demise of crypto is like conflating a small fire with an end of the world apocalypse. It’s not the same. Of course, the conclusion is the same : there will be calls for regulation to protect the average investor and bring crypto tokens, NFT’s and the world of Decentralized Finance to the next generation. Make no mistake, our children will possibly hold crypto assets and NFT’s in their portfolio as viable asset classes.

There are three guiding principles to keep in mind while evaluating risky investments. This is me sharing my financial lessons and is not financial advice.

Understand the Fundamentals Before Investing

The power and promise of Bitcoin and its ilk i.e. crypto tokens such as Ether, Solana, Ripple etc. was to introduce the world to a new accounting mechanism (ledger) called the blockchain — the ledger just happens to be decentralized i.e stored on each and every computer (node) in the network and entries in the ledger are made by a computer solving an algorithm (Proof of Work) or holding enough tokens (Proof of Stake).

The concept of a decentralized ledger is so elemental that it can be applied to any task a modern day ledger does. In other words, the applications of the blockchain are limitless and so is its power. As I wrote before, Central Banks are now contemplating the use of the blockchain to mint their own crypto tokens i.e. Central Bank Digital Currencies.

Therefore, FTX may have collapsed but the core idea behind crypto i.e. the blockchain is fundamentally solid and is being applied around the world.

There are thousands of blockchains and there are over 21, 817 crypto tokens with a total

Abhishek Kothari

Futurist@The Intersection of Finance, Tech & Humanity. Stories of a Global Language: “Money”. Contributor @ Startup Grind, HackerNoon, HBR