The biggest lie in cryptocurrency, peddled by the biggest names in tech.
Renowned tech reporter and Elon Musk apologist Kara Swisher received vast amounts of flack this week for defending her podcast co-host Scott Galloway’s crypto-shilling advertisement, using the least-rigorous argument that the crypto world has:
Writer and friend of the newsletter David Gerard dug into the company in question, one that invests your retirement in cryptocurrencies, including Axie Infinity’s (a play-to-earn Ponzi scheme) token. Galloway, who has made a successful career of saying extremely obvious stuff to an adoring audience of people with no object permanence, has stayed relatively quiet, I assume, because it’s fairly obvious that he either doesn’t give a shit or doesn’t understand what he’s talking about - or, of course, both.
What frustrates me about Swisher - who I have admired previously, but appears to have become the standard-bearer for defending powerful interests (like pulling punches when questioning Microsoft over Bobby Kotick and the disgusting things that he and Activision have done) - is that this argument barely rises to the level of “an actual argument.” Gerard has also written an exhaustive piece about this subject, debunking specific ideas about why Bitcoin and cryptocurrency are not “the early days of the internet,” but I want to take a slightly different tack, in that I very much grew up in the early days of the internet.
While not the earliest - I’m sure the greasy pedants that wish for my suffering are excited to correct me - I started using the internet in the late 90s, logging onto Compuserve on a 33.4kbps connection via a PCMCIA card. It was slow but enthralling, with every click having a real purpose (because you knew whatever you clicked would take a little bit to load), and, most importantly, you could draw direct lines from what was happening in 1999 to what would happen 23 years later.
“The early days” I experienced involved chatrooms, web forums, bulletin boards (both those on Compuserve and eventually web-based ones like vBulletin), LiveJournal, mIRC (I used Polaris if anyone remembers it), and eventually AIM - all things that were direct precursors to Facebook, Snapchat, Discord, and other products that have truly become the foundation of the internet.
The surprises mostly came from a lack of imagination on my part based on how slow connections were - it was unthinkable to imagine being able to hold, say, a video call or even have a phone call using a dial-up connection. Similarly, it was hard to conceive (though obvious, perhaps, if I was not a child) that one would eventually “stream” content rather than download it - it’s almost impossible to imagine the chaotic disconnections that would happen based on everything from bad weather to someone picking up the phone when you were connected.
Sidenote: To be clear, this sucked, and nobody should be nostalgic for it. I love that my internet is always on. I love that I don’t have to use a phone line. Things download quickly rather than slowly. If you’re nostalgic for the “old internet,” you’ve just forgotten how to make friends with people online.
However, had I been pushed to (and been smarter), I could have conceived the idea of what the internet is today - fast, social, with video or audio delivered to your computer (Ventrillo was an early example of how possible this was). MySpace got big because it let you be “yourself” online, but an extremely-manicured one - Facebook got bigger because it realized that people wanted a digital presence rather than a digital scrapbook where you could offend someone because you didn’t put them in your “top 8.”
What I’m getting at is that the things that are “like” the early days are so because they resemble it. Facebook profiles are not entirely dissimilar to vBB profiles - different, but the idea of a digital identity made sense. Zoom would have seemed space-age, but one can say that a person in the 90s wouldn’t have needed convincing that it was an important piece of technology.
I will tell you that there is no direct comparison I can think of, like a nasty little internet goblin from the old times that Bitcoin or Ethereum resembles. As someone that repeatedly had to convince my father to buy random new technology stuff, my arguments were usually, “this stuff is very cool; look at what it can do!” and he’d agree because it was all stuff that made sense - I could store my stuff (and thus access it in the future), or I could play computer games with people thousands of miles away - these were all things that made sense as extensions of things we already did with our lives.
Cryptocurrency doesn’t resemble any of it because it doesn’t have a real purpose. It is not replacing anything, nor is it doing a better job at anything. It’s fun to remember the early internet because you can see how it lead to today - and, as of yet, cryptocurrency has yet to make an indelible mark on society other than the ability for venture capital companies to find more sources of liquidity. Bitcoin is also 13 years old, meaning that it’s far past the point at which one can forgive it for not having done anything.
Considering what Twitter and YouTube alone have grown into in the last 13 years, it’s remarkable how little cryptocurrency or Bitcoin has changed. We are not in the “early days” of anything anymore, yet when compared to almost any other major technology, cryptocurrency has just staggeringly, painfully failed to prove itself as anything other than an asset class based on rigged knife-catching. Even the failed companies and pieces of software from the early internet days - say the Mosaic browser that integrated graphics and sound into your browsing experience - can be traced to today’s successes like Chrome or Firefox.
In the case of cryptocurrency, the basic idea - digital money, sent instantly (well…) and without waiting for the bank to approve it - has already been done by Venmo and Zelle. Cryptocurrency is barely anonymous anymore, and I have yet to see one crypto project that justified the blockchain's complexity and lack of speed. And again and again, I see projects that are simply regular web-based apps that have been jammed into some horrible decentralized monster that functions terribly and looks awful.
I am exactly the kind of big, stupid idiot who loves to see the future and get excited about it before everybody else, and I cannot work out what to be excited about. The very nature of decentralization isn’t fast - even the single fastest blockchain in the world is going to be slower than an internet connection - which means the fundamental crappiness of cryptocurrency (the reliance on a horde of people crunching numbers rather than a content delivery network or centralized compute source) is a feature rather than something to be fixed.
This is not a technological problem, as the very core of the technology is flawed when it comes to delivering any of the experiences that have been promised. One could easily have seen that a faster internet connection or faster computers could have created the internet today - to me, whatever the “future of the blockchain” is, it is not something that has any actual lasting technological benefits.
And, frankly, what is “new” about cryptocurrency? What new things have we done with it, other than finding new and inventive ways to con people? Having the world’s largest questionably-legal foreign currency exchange platform is not “new,” it’s simply “more of a bad thing that already existed and was, in many cases, inaccessible due to how dangerous it is to the average investor.” The reason that we didn’t have markets that resembled cryptocurrencies is that if you tried to do this in any other way, it would be so incredibly, obviously illegal that the SEC would wear your skin like a suit.
Using the tools and software of the early internet was fun because you could sort of see the future happening around you. Downloading a game to your computer without having to go to the store was really cool. Staying up late to play EverQuest because of timezone differences was exciting, because of the possibilities of these new friendships I would have never otherwise seen. You could see that this was the future because the actions you were taking were new but natural - making friends, communicating with people, consuming media, playing games, and learning new things were all extensions of the human experience.
If anything, cryptocurrency feels regressive. Cryptocurrency-based blockchains are slower, uglier and altogether worse ways to do anything. NFTs are more expensive and uglier than buying a piece of art off of just about any site that sells art. The only real use cases I can think of are unique to cryptocurrency only because in any other context they would be a form of fraud, or at best an extremely onerous way to trade stocks. Nothing about it feels new, or exciting, or like the future, other than the opportunity for someone to make a lot of money (which is unlikely) - an idea sold by those who simply want more people to exploit.
I wrote a paragraph that started with “there are some ideas that are exciting adjacent to cryptocurrency, such as digital collectibles,” then stopped myself because that’s not very exciting at all. Digital status exists (blue checkmarks on Twitter, large follower accounts), but that does not mean that digital art is going to become a new frontier outside of those buying it as a speculative investment, nor does it mean that a monkey picture is the new Rolex. Decentralization is interesting as an idea, but does not have any real exciting thing it can do that I have imagined or been told of.
What makes a kind of technology so exciting is imagining what more you could do with it as a result. I got the Ayn Odin pro recently, and I’m excited about it because it lets me play old games using the speed and form factor of modern gaming. It lets me do things I used to do faster, better, and in a more portable way. On the other side of the wow-factor spectrum, the original iPhone changed the cellphone industry because consumers suddenly realised that one device could do many things, and that cellphones could be like little computers.
Conversely, cryptocurrency is the innovation equivalent of quicksand, trapping talented people in an intellectual abyss where their efforts go to creating increasingly more complex ways to do things that were done ten years ago. It pays very well, it has a certain future-adjacent “feel” to it (Web3! It’s one more than Web2!), and it’s something that can make you sound very smart without actually saying anything at all. This is not an issue of intellectual capacity or imagination but an industry-wide failure to admit that there is no real cryptocurrency product, just an endless economic entropy as people enter and exit based on who has lied to them at any given moment.
People like Swisher are either intellectually corrupt, lacking in curiosity, or too scared to make the call that something is stupid. Kevin Roose’s terrible New York Times “latecomer’s guide to crypto” was disgusting on many levels, but one of the worst was how it acted as if this was an inevitable future. Instead of aggressively interrogating the substance of this possibly-fake trillion-dollar asset class, powerful reporters are instead deciding that perhaps it’s best to give the benefit of the doubt to an industry that has and will continue to, burn holes through the savings of millions of people.
And they should be ashamed. The job of any reporter is to speak truth to power and actively interrogate evangelists' agendas of any new technology. It is not hard to spot the agendas behind those who are rich, powerful, and influential in cryptocurrency, nor is it easy to find any solid argument for why cryptocurrency needs to exist. Swisher has reported for decades and seen huckster after huckster, but seems to have intentionally or otherwise ignored the well-documented and obvious problems of the industry.
It’s a huge shame, and a deep disservice to the public.