Cryptocurrencies have become the most popular and traded among millions of users in the world, and their trading has made many people wealthy.
In a report published by the American "Bloomberg" website, writer Zick Fu said that Sam Bankman Fried, a 30-year-old cryptocurrency billionaire, will be the first billionaire to give up his fortune.
Five years ago, Bankman Fried was working for a charitable organization that promoted "effective altruism", where he uses scientific reasoning to figure out how to best benefit most people, which led him to discover that the right path was to make a lot of money to donate.
According to the Bloomberg Millionaire Index, Bankman Fried is currently one of the richest people in the world, with a fortune of more than $20 billion.
Despite his large fortune, Bankman still maintains his simple philosophy in life, and keeps enough money to maintain a comfortable life, which is estimated at 1% of his profits.
But he plans to give away every dollar, or bitcoin.
Sam Bankman Fried despite his great wealth, still maintains his simple philosophy on life (French)
Who is Bankman?
Bankman Fried is to some extent the richest person to come out of the Effective Altruism movement, but should someone who wants to save the world first accumulate as much money and power as possible, or will follow-up spoil them along the way?
Bankman lives like a simple college student. He drives a Toyota Corolla, lives in an apartment with 10 other people, and although he doesn't like wasting time saving, he doesn't see much value in buying things or spending money.
Bankman's peers describe him as a strange kind of capitalist monk, one says he worked so hard in the early days that he rarely showered, another says he didn't have time for relationships, and considers sleep an unnecessary luxury.
The writer says that the cryptocurrency industry may seem a strange option for good business owners, as it facilitates endless fraud, but Bankman does not see it that way, as he says that the “FTX” platform - which is its co-founder and CEO - runs a market Integrity where users buy and sell bitcoin, ether and other cryptocurrencies, check customer backgrounds, buy carbon credits to offset their emissions, and are more efficient than the mainstream financial system.
Bankman was influenced by utilitarian philosopher and professor at Princeton University, Peter Singer, regarding the donation of large sums of money, and although he was not sure what to do, he turned Singer's ideas into a movement called "effective altruism", which made him and his assistants aim to use accounts Some say the ends do not justify the means and that Wall Street entrenches inequality and undermines whatever benefit donations can bring, while others say the movement portrays the rich as champions and fails to address the root causes of poverty.
Prices differences
And in 2017, when the price of bitcoin rose 10 times more than its usual price and investors lost about $5 billion in hundreds of “initial coin offerings,” Bankman, like many on Wall Street, did not understand cryptocurrency, but what caught his eye was a page on CoinMarketCap.com displays prices from stock exchanges around the world.
Although proponents of cryptocurrency have talked about this decentralized financial revolution, most of the activity has been based on private exchanges to match buyers and sellers, where people who want to buy bitcoin, ether, dollars or euros send to the exchange, trade them for a while, then withdraw them, and here Bankman notes that Some cryptocurrencies were not sold at the same price on all exchanges, which was the kind of arbitrage opportunity of buying low and selling high that he learned to exploit at Jane Street, but he built complex mathematical models for trades aimed at making money from small price differences, despite The discrepancies in cryptocurrency exchanges were hundreds of times greater.
Some trades were impossible to carry out, as capital controls prevented traders from sending cash home, and in theory, anyone could earn 10% a day by buying bitcoin on an American exchange and sending it to a Japanese exchange to sell it, at that rate, in a while. In just over 4 months, $10,000 can become $1 billion.
After establishing his company, Alameda Research, American banks considered cryptocurrencies so shallow that some did not allow him to open an account, which made him open a subsidiary in Japan, but bank managers always raised questions about his remittances abroad, which is Which made him have a lot of trouble sending money.
Bankman built complex mathematical models of trades that aim to make money off price differences (Getty Images)
business boom
In 2018, Bankman went to a Bitcoin conference in Macau, where he met some of the other big players in the market and decided to stay in the center of the action, telling his colleagues on Slack that he was not going back to Berkeley.
Eventually, many joined him in Hong Kong, which has more permissive regulations than the United States.
By 2019, Alameda was providing hundreds of thousands of dollars in profits a day, enough to save a life every hour if Bankman Fried chose to give the money to the appropriate charities.
Instead, he and his colleagues decided to reinvest their winnings, in part, into building their own crypto exchange. Markets were in tatters, often crashing when prices fell or rose, and some charged fees from Alameda Group, to compensate exchanges for their losses in Margin loans to clients, an unheard of practice on the New York Stock Exchange.
It took the Bankman crew 4 months to write the basic code for a new exchange, FTX, that opened for business in May 2019 and caters to major traders.
The Effective Altruism movement
Confirming that he maintains an austere lifestyle, Bankman identifies with the beliefs of "effective altruism," a social movement that uses logic to determine the most effective ways to benefit others, and is estimated to have so far donated between $50 million and $100 million to causes such as the fight for animal welfare and animal welfare. Neglected tropical diseases and climate mitigation.
Young tech entrepreneurs like Bankman Fried have turned the Effective Altruism movement into a philanthropic force. More than 7,000 people have pledged at least 10% of their profits through a group run by the Effective Altruism Center, where they donate Dustin Moskovitz, one of the founders of Facebook, pays hundreds of millions of dollars a year to charities the movement considers effective, and Elon Musk, the founder of Tesla, has hired a professional poker player turned influencer to advise him on giving.
The author concludes with what McCaskill, founder of the Effective Altruism movement, says that Bankman Fried was temporarily excited by the idea of buying coal mines, to prevent emissions and to keep fuel on hand in case it was needed in a post-disaster scenario, but decided it was not cost-effective. “We should expect epidemics to get worse over time because of the potential for laboratory leaks,” Bankman-Fried says. “There is an opportunity to destabilize the world if we do not prepare for it.”