Sam Bankman-Fried: belief

Transcript context

…There're two ways of thinking about the impact of crypto on financial innovation. One is the crypto maximalist view that crypto subsumes tradfi. The other is that you're basically stress-testing some ideas in a volatile, fairly unregulated market that you're actually going to bring to tradfi, but this is not going to lead to some sort of decentralized utopia. Which of these models is more correct? Or is there a third model that you think is the correct one? Who knows exactly what's going to happen? It's going to be path-dependent. If I had to guess I would say that a lot of properties of what is happening crypto today will make their way into Trad Fi to some extent. I think blockchain settlement has a lot of value and can clean up a lot of areas of traditional market structure. Composable applications are super valuable and are going to get more important over time. In some areas of this, it's not clear what's going to happen. When you think about how decentralized ecosystems and regulation intersect, it's a little TBD exactly where that ends up. I don't want to state with extreme confidence exactly what will or won't happen. Stablecoins becoming an important settlement mechanism is pretty likely. Blockchains in general becoming a settlement mechanism, collateral clearing mechanism, and more assets getting tokenized seem likely. There being programs written on blockchains that people can add to that can compose with each other seems pretty likely to me. A lot of other areas of it could go either way. Let's talk about your proposal to the CFTC to replace Futures Commission Merchants with algorithmic real-time risk management. There's a worry that without human discretion, you have algorithms that will cause liquidation cascades when they were not necessary. Is there some role for human discretion in these kinds of situations?…

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