On Friday morning last week, Sam Bankman-FriedAn American entrepreneur who was the youngest billionaire in the world. He had pledged to give most of his wealth to charity across his life, before being arrested on fraud charges. had a fortune of $16bn. By the end of the day, he had next to nothing.

How could this happen? Bankman-Fried made his money from a company called FTX, which allowed people to buy and sell cryptocurrencyA digital currency in which transactions are verified and records maintained by a decentralised system using cryptography, rather than by a centralised authority.. With an estimated 1.2 million users trading $10-15 billion a day, it was one of the biggest crypto platforms in the world.

But in September, questions began swirling about Bankman-Fried's management of FTX. Then on 7 November, its main competitor, BinanceAn online exchange where users can trade cryptocurrencies. It supports most commonly traded cryptocurrencies. Binance provides a crypto wallet for traders to store their electronic funds. , said that it would sell all its holdings of FTT, the cryptocurrency tokenA virtual currency token or a denomination of a cryptocurrency. It represents a tradable asset or utility that resides on its own blockchain and allows the holder to use it for investment or economic purposes. of FTX.

The result was a mass panic as people sold off their own holdings of FTT. Over three days, FTX lost $6bn. It was forced to suspend withdrawals from its accounts, and on Friday later it filed for bankruptcy.

The customers have borne the brunt of the crisis. It is thought that between $1bn and $2bn of their money was locked up in FTX and now cannot be retrieved.¹

The crisis has sent shockwaves through the cryptocurrency world. BitcoinA virtual currency that is "mined" using computers. Bitcoin was inspired by the idea that currencies' value should not be controlled by central banks. In truth, however, its value has fluctuated much more wildly than that of most centralised currencies. fell to its lowest price in two years. Other crypto exchanges saw massive losses.

That is why some think this spells the end of the cryptocurrency age.

Crypto began in the aftermath of the 2008 financial crashThe financial crisis of 2007-2008, or Global Financial Crisis, was a severe worldwide economic crisis that occurred in the early 21st Century. It was the most serious financial crisis since the Great Depression between 1929 and 1939. . Some people were disillusioned by the mismanagement of the banking system, and outraged that the bankers had been bailed out by the government. They wanted an alternative to the traditional banks and failed regulation.

Others thought the system had failed because it had been over-regulated. They dreamed of a money system that was completely free of government interference.

Crypto seemed like the answer. It is a completely decentralised system that only exists on a computer network, so it is not reliant on any government or bank.

But it has been a tumultuous ride since 2008. In September 2018, the value of cryptocurrencies dropped by 80%, one of the biggest crashes in any industry in history. Yet last year, the industry grew to a total value of $2 trillion, as its most well-known currency, bitcoin, more than doubled in value.

These crashes were not enough to bury crypto. But the FTX crisis is different. The company claimed to be a "responsible" crypto company, stepping in to stabilise an immature sector. Those who had been burnt by earlier crashes could trust them with their money.

Now, some argue, the FTX incident has proved that mature, stable crypto was a pipe dream. Crypto cut out the government and the big banks, but it has not ended up in the hands of the little people. Instead, it has become the plaything of irresponsible billionaires who end up costing the little people all their savings.

But others think this is just a blip. They argue that for as long as it is still possible to make a lot of money on crypto, the currencies will stick around. 

And they say instability is the point: unlike the carefully controlled stock market, crypto means people can win big, even if they can also lose big.

Yes: This whole crisis took place because of the foolish and selfish decisions of the billionaire owners of crypto exchanges. Now ordinary people have lost their money.

No: Crypto is still having teething troubles, but the basic idea of putting currency back in the people's hands has not lost its shine. It is just waiting for a technical solution to come and stabilise it.

Or... Crypto was never a con, but the buzz around it led people to make unwise financial decisions. Everyone got carried away, stopped thinking clearly, and lost their money as a result.