It’s hard to imagine for the second time I find myself expressing that skepticism is necessary. I began publishing with a spotlight on Bitcoin and cryptocurrency — mainly focusing on the labyrinthian fraud schemes — back in 2017/2018. At that time, Bitcoin had entered a massive run up in price and my push back against Tether, Bitfinex, and other actors in the space was met with almost exclusively bad faith and name-calling.
Granted, back then I was more interested in shitposting and cracking jokes, but regardless, it was strange to see people who prided themselves on being their own bank defending a cryptocurrency bank that couldn’t prove it had banking.
Here We Go Again
Now, after a dramatic and glorious run up in price in the Bitcoin and alternative cryptocurreny spaces, the same people who heralded “Tether Truthers” as “conspiracy theorists” and “goal post movers” are back at it again. Why? Because Tether and Finex are on an intensive PR push — and it’s working very effectively.
So far, we’ve had a chief technology officer and the general counsel on a podcast (wherein they answer no pressing questions), OTC desk founders vouching for it, quant traders claiming redemptions (without proof), and investors in Bitfinex calling it “FUD.”
What are Skepticism and Cynicism?
Seems lousy to make a finance piece turn into a philosophy article, but…
The true reason this piece felt necessary was because of little tweet by someone I really respect, Nelson M. Rosario:
I think there may be some fun being had in the tweet, but it’s a good reflection on how people within fintech usually feel about their peers: criticism is easy and lazy, building is hard. Time to dismantle this argument.
Skeptic, etymologically, is rooted in Ancient Greek and means something along the lines of “a thoughtful, considerate examiner.” Meanwhile, cynic is also rooted in Ancient Greek and has a much simpler definition: dog-like. One is about thinking thoroughly to ask reasonable, fair questions, the other is more vague, but is defined a few interesting ways:
These two concepts, on the surface, appear to be world’s apart, but in truth are easy to combine.
The enemy of the skeptic is the proselytizing know-it-all who provides little-to-no proof for their adamant claims. If you are a cynical skeptic, it means you will, in a dog-like fashion, attack the arguments of these individuals while attempting to protect those who you believe they are trying to convert. It is a valiant philosophical code, and helps solidify the foundations to what stoics and builders create.
There are levels to skepticism and cynicism. Some is trolling, even in the Ancient Grecian days:
Gorgias, for example, reputedly argued that nothing exists, that even if there were something we could not know it, and that even if we could know it we could not communicate it.
According to Diogenes Laërtius, when Plato gave the tongue-in-cheek definition of man as “featherless bipeds,” Diogenes plucked a chicken and brought it into Plato’s Academy, saying, “Behold! I’ve brought you a man,” and so the Academy added “with broad flat nails” to the definition.
But this trolling served a purpose: to help move forward progress. While many skeptical and cynical claims are impossible to refute, they also force stoics to rethink their valiant efforts at creation, and without this objective outside perspective and source of (annoying) questions, the ideals would no longer be as strong.
It’s important to remember that even the creator(s) of Bitcoin sought out references and peers who would critique and question the new product. Instead, skeptics and cynics are hounded and harangued now.
Auditing and Skepticism/Cynicism
Auditing relies on both skepticism and cynicism. To audit a company or individual — financially or otherwise — means you are looking over their paperwork and asking them questions. Additionally, if you’re someone such as an auditor for the IRS or an internal auditor for a large corporation, one needs some degree of cynicism and untrustworthiness to the counterparty — if the individual is able to prove their truth, then the numbers or explanations are accepted and life goes on.
The goal of auditing, of course, isn’t to destroy companies or people, but rather to enforce honest action on the part of the person (or company) being audited and fair recourse for others.
And this is where we land in regard to the Finex/Tether discussion. On one side is the stoics, who see Finex as a market leader, unconquerable force for good, that has repeatedly done right by customers.
On the other side, are skeptics and cynics, who don’t only see a long trail of unanswered questions and extremely questionable behavior, but — if you’re old enough — you’ve probably seen all of this before. One only need look at what occurred with Theranos, Madoff, and WorldCom to see that just because someone is powerful or wealthy, doesn’t mean that they’re a reliable or trustworthy narrator.
Stay skeptical, friends.