I have a half-baked, three-quarters-joking theory of cryptocurrency, which is that it is a magical incarnation of a sort of male internet grievance. People — mostly men — sit around on Reddit complaining that they are underappreciated geniuses and that it is unfair that they have not been rewarded with vast wealth. They feel dispossessed and betrayed: They expected the modern world to reward computer literacy, but then they grew up to realize that the modern world, much like the old world, rewards mostly people skills and creativity and emotional intelligence. And then Bitcoin came along, and paranoid computer-literate people who spent a lot of time on the internet were the early adopters, and it became the world’s first economic system that allocates wealth basically for hanging around on Reddit. What [venture capitalist Alexia] Bonatsos describes is not an accident; cryptocurrency seems almost custom-designed as a way for the men to get all the wealth, again.
I know you are going to email me to complain about this theory, but what I want to propose here is: What if you didn’t?
Matt Levine on grievance.
So apparently there’s child porn in Bitcoin’s blockchain ((Two instances that the researchers found, one of which is a links list to other child abuse material, the other of which is “an image depicting mild nudity of a young woman” that the researchers declined to investigate the legality of. Oh, and there’s also just regular porn in there too.)) which, because of the way blockchains work, could mean that by mining or otherwise transacting in the currency? Congratulations. You are now in possession of criminal material. Enjoy jail! Not to mention getting the material out is also going to be next-to-impossible, for the same reason.
I mean, seriously. Who could’ve seen this coming, right? Except, like. Oh. Pretty much anyone.1 That who could’ve seen it coming.
- Except blockchain fanatics, apparently. ^
A person could, of course, at least in theory, purchase a huge percentage of a given cryptocurrency. Many observers of the markets think this already happens, especially in the tokens other than the big five or so, but even then. So what? What if one person owned every single bitcoin in existence, or at least every bitcoin that is currently being traded? What would they be able to do? As far as I can tell, absolutely nothing, beyond selling them to other people or crashing the market, thereby losing much of whatever money the person had used to buy up the bitcoin to begin with.
David Golumbia on imaginary value.
An interesting primer on cryptocurrencies, comparing them to actual currencies and to shares. It walks through the basic concepts of what both currencies and shares actually are—stripped free of all the libertarian market-worship nonsense—and considers whether cryptocurrencies meet the definition of either.1 It also describes the concept of market cap, and why it’s nonsensical to talk about it in the context of cryptocurrencies (see quote above).
Given that Golumbia is the author of the right-there-on-the-tin The Politics of Bitcoin: Software as Right-Wing Extremism, it’s not like the guy doesn’t have a horse in this race, and you can make some arguments that he glosses over the potential technical benefits of blockchain—as distinct from cryptocurrencies per se—particularly as they might relate to being implemented in an existing, regulated financial structure. Which… okay. Fine. But if the question is less about that and more about, “Is bitcoin an investment?”2 or “Should I use it to buy a pizza?” then the answer is a very definite, “A-har har h— oh you’re serious. Then no.”