Number Go Up: Inside Crypto's Wild Rise and Staggering Fall
Wider crypto reporting with FTX at its center.
Summary
Faux, a Bloomberg investigative reporter, spent two years reporting on cryptocurrency during the 2021 boom and 2022 collapse, initially trying to answer one question: whether Tether, the stablecoin backing most crypto trading, actually held the dollars it claimed.
The reporting takes him through the whole sector. He covers Tether's opaque reserves and its executives' refusal to demonstrate them, the NFT market and its wash trading, Sam Bankman-Fried and FTX before and after the collapse, Do Kwon and the Terra-Luna failure, El Salvador's bitcoin adoption, and a Cambodian compound where trafficked workers were forced to run pig butchering romance scams that converted victims' savings into crypto.
His conclusion is that he found almost no legitimate use for the technology beyond speculation and crime, and that the industry's stated purposes did not correspond to what anyone was actually doing with it. He reports that the scam compounds were the largest genuine use case he encountered.
The reporting is first-hand and Faux is funny about his own position as a sceptic embedded among believers. He is explicit that he could not prove Tether was insolvent and did not, which is a mark of honesty rather than a weakness.
The book is journalism and it argues a position rather than assessing the technology's potential neutrally. Readers who think blockchain has legitimate applications will find those unexamined. As reporting on what the 2021 to 2022 cycle actually consisted of, it is the best single account.
Key takeaways 7
- Tether, which backs most cryptocurrency trading, has never demonstrated that it holds the reserves it claims, and its executives declined every opportunity to do so.
- The 2021 boom was sustained by leverage and by a stablecoin whose backing nobody had verified, which made the whole market dependent on one unaudited entity.
- NFT trading volumes were substantially wash trading, in which the same parties traded with themselves to create the appearance of a market.
- Terra's algorithmic stablecoin failed for the reason its critics stated in advance, that the mechanism depended on continuous new demand for the paired token.
- Pig butchering scams run from trafficking compounds in Southeast Asia were the largest genuine use case Faux encountered for cryptocurrency transfers.
- El Salvador's bitcoin adoption was largely unused by its population, who continued to transact in dollars.
- The industry's stated purposes did not correspond to what participants were actually doing with the technology, which was speculating and moving criminal proceeds.
Who should read it
Investors who want first-hand reporting on what the 2021 to 2022 crypto cycle actually consisted of, from a sceptical position.
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