Though it can be depressing to consider the worst in tech each year, sometimes naming some of the losers can actually bring some schadenfreude. In 2022, watching the long-overinflated crypto bubble burst was like staring at a pimple being popped in slow motion: oddly and grossly satisfying. And though some of us were sad to see Stadia go, no one in the tech and gaming industries was surprised when Google sent it to the graveyard. More frustrating, though, were the debacles that unfolded this year with very real and sometimes dangerous repercussions for the most vulnerable communities. As we recap the worst things that happened in tech in 2022, let’s hope that the year ahead brings more positive developments for us all.
Even before Elon got his hands on Twitter, the service was being mis-handled by its leaders. As soon as Musk floated the idea of a $44 billion takeover earlier this year, Twitter CEO Parag Agrawal and the company’s board seemingly jumped at the potential payday. Who cares if it’s a singular social network, one of the few platforms for under-served communities to get their voices heard? Agrawal alone reportedly received $57.4 million from the sale. (Founder Jack Dorsey ended up rolling over his investment in the site, rather than nabbing a near $1 billion payout.)
And now we have Musk’s Twitter, an increasingly toxic pit of the internet’s worst, driven entirely by the richest man in the world’s id. Advertisers are leaving in droves, and Twitter obsessives are making their way to whatever alternative they can find. Meanwhile, Musk is learning just how difficult running a social network is (what’s that, you actually need content moderation?!). At this point, we can only hope Twitter will go the way of Tumblr: Mismanaged until it’s sold at a fire sale price to someone who actually cares about the internet. — Devindra Hardawar, Senior editor.
Crypto, FTX and everything related
2022 saw the value of major cryptocurrencies fall by a significant margin, with billions of dollars being wiped off the industry in minutes. Major crypto companies saw that a winter was coming, and started running layoffs in the hope of staunching the flow. But that winter got turned into a blizzard when FTX collapsed, pulling the already downward trends even further south. The year also saw plenty of other crypto exchanges get hacked, or burn up quite spectacularly when things got hairy. It was only then that the air started pouring out of Sam Bankman-Fried’s bubble, and we’re living through the consequences of that right now.
An Aside: I studied company law and finance for two years, and while I’d never pretend to be a high-minded finance type, even a cursory look at FTX should have aroused suspicion. The business was structured so opaquely that it seemed like an obvious ploy to mask something, be it amateurishness, or criminality. No company that drew in just $388 million in profit needed to be structured into 100 wholly-owned sub-businesses – only a megacorporation like Disney could possibly justify such a sprawling structure.
The other thing that FTX’s collapse should remind us all is that, while the current banking system is hardly a paragon, it does it least function. The fact that FTX was allowed to hold so much money in a system run by a bunch of comparatively unqualified figures is ludicrous. Maybe there’s a reason we don’t let a bunch of relatively young kids with little real-world experience in the banking world run major financial institutions.
If you want to know how bad FTX was, just look at what John Ray III, who famously nursed Enron through its bankruptcy, wrote in the Chapter 11 filing. “Never in my career have I seen such a complete failure of corporate controls,” he said, adding that the founders were “inexperienced, unsophisticated and potentially compromised.” It gets worse when you reach the bit where it turns out the company had no idea how much cash it had at any one time. Which is surely table stakes for most financial institutions?
Then there’s the, ahem, alleged prevalence of wash trading in the NFT sphere, as holders swap assets amongst their wallets to give the appearance of a healthy market. Or the fact that a number of major crypto billionaires recently passed away in mysterious circumstances. But there’s no proof, friends, that this is tied to crypto’s usefulness in laundering cash for major criminal networks. None at all.
I do think, however, that what will really hammer the nail into crypto’s coffin in 2023 is the recession, as people need to cut down on their luxuries to pay for the essentials. Sure, you could justify buying a Bored Ape as an “investment” when there were stimulus checks rolling around the economy. But when you’re deciding between getting $100 bucks to cover your fuel bill this month or a JPEG of Jimmy Fallon as a monkey, a lot of people are going to make the sensible choice. — Daniel Cooper, Senior editor.