Bailouts in crypto are no good!

Companies, enterprises, businesses, exchanges, firms, what really is the difference? Just a bunch of differently spelt words defining nothing but institutions that's only after "making a profit"

There's been recent talks about crypto bailouts with several companies stepping in to support struggling ones amid market turbulence. The conversations surrounding this is mostly centered upon if it's a "do or not" situation.

When we look at the negative running balance sheets, skyrocketing bad debts, all the worst to observe in running companies, the space is exposed to massive failed projects. While some people may view bailouts as "support", it's frankly more of a weak link in the long run.

Every section tends to have more failed projects than successful ones, this is usually because the product being developed is either mismanaged or frankly not managed at all. However, a natural effect of trials and error also plays in, this role creates room for even more companies set up to tackle various product development.

That said, crypto shares that similarity in the current markets, poorly managed projects based on different points of flaws, extravagant spending, unsustainable offerings leading to bad debt, sometimes, just bad business planning whereas, in terms of crypto covers distribution, utility and marketing.

Loans are practically damaging, as observed over the years, there's always a 90% chance of incurring bad debts when running a business backed by loans. This is usually because the business exists just to make a profit only to pay debts. So then, building workable solutions or developing products that aids healthy business growth is difficult, bailouts are practically the same thing, given out to struggling companies, which in this case there's quite a number of them, including BlockFi as the most notable.

These loans have terms of issuance, these terms often include asset collaterals, which can be anything, life, houses, companies, whatever as long as it fits into the issuers definition of "asset class", and in crypto space, it's usually a fat bag of coin supply or a huge profit cut from the company's running balance. This directly centralizes the affairs of the project in mention, and most times places them on a negative running game.

This is the centralisation crypto doesn't need. This space is built to grow organically, and projects should frankly be better planned out. There's a good and bad side to these bailouts, and unfortunately, the bad is on the high side. BlockFi may not exactly grow in a better business environment and is really really at risk of losing a lot of customers…

Companies on green reserve funds are going to look out to buy out the industry with this, imagine as an exchange, owning a big stake in a lending platform, that business is practically bought and running under the large stake holder, cutting down profits and buying away customers, it is terrible, but there are just a lot more that we may see falling in if this crypto bloodbath isn't over just yet.

Regardless of handouts, most projects will still run out and into dust, the space may get scarier scaling up, but that's a good thing, considering the separation effect that falls in. Those really building and developing will come out strong, the best planned out project gets to keep the stage, bailouts are only going to cut profits and centralize most projects even more than some already were, venture capitalists are being born amongst crypto set ups