The Edited Latecomer’s Guide to Crypto

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By Kevin Roose, originally published in The New York Times on March 20, 2022
Annotations by Molly White, Matt Binder, Grady Booch, Amy Castor, Stephen Diehl, Dirty Bubble Media, Dr. Catherine Flick, David Gerard, Geoffrey Huntley, Bennett Tomlin, Neil Turkewitz, Ed Zitron, and some anonymous contributors

On March 20, 2022, the New York Times published a 14,000-word puff piece on cryptocurrencies, both online and as an entire section of the Sunday print edition. Though its author, Kevin Roose, wrote that it aimed to be a "sober, dispassionate explanation of what crypto actually is", it was a thinly-veiled advertisement for cryptocurrency that appeared to have received little in the way of fact-checking or critical editorial scrutiny. It uncritically repeated many questionable or entirely fallacious arguments from cryptocurrency advocates, and it appears that no experts on the topic were consulted, or even anyone with a less-than-rosy view on crypto. This is grossly irresponsible.

Here, a group of around fifteen cryptocurrency researchers and critics have done what the New York Times apparently won't.

Note: Annotations that are quoted directly are explicitly credited to their authors inline. Annotations without inline attribution are a summary of multiple comments.

Crypto is a lot of things – including terribly explained. We’re here to clear things up.

Until fairly recently, if you lived anywhere other than San Francisco, it was possible to go days or even weeks without hearing about cryptocurrency.
Now, suddenly, it’s inescapable. Look one way, and there are Matt Damon and Larry David doing ads for crypto start-ups. Swivel your head — oh, hey, it’s the mayors of Miami and New York City, arguing over who loves Bitcoin more. Two N.B.A. arenas are now named after crypto companies, and it seems as if every corporate marketing team in America has jumped on the NFT — or nonfungible token — bandwagon. (Can I interest you in one of Pepsi’s new “Mic Drop” genesis NFTs? Or maybe something from Applebee’s “Metaverse Meals” NFT collection, inspired by the restaurant chain’s “iconic” menu items?)
Crypto skeptic Ben McKenzie has argued that this is a sign that the bubble has become precariously large, not that crypto has become ubiquitous: "The celebrities are a symptom of a much bigger problem... You've got all this money and you're trying to get it out to more people and get more people to buy. And if one were to compare cryptocurrency to, say, an MLM or a ponzi, then you would need ever more people to come in to keep the thing going. Celebrities are sort of the natural endpoint for that. At its biggest, you need the biggest: you need Matt Damon and Larry David and sports stars to sell it." (Crypto Critics' Corner, episode 51)
Miami's mayor also introduced "MiamiCoin" to his city. The Miami residents and everyone else who still hold the coin have all lost money, and the coin is trading well below its initial price.
Roose fails to mention the many companies who have jumped off the bandwagon as quickly as they jumped on, after realizing that their users are not only uninterested in being sold NFTs, but actively oppose them. Countless video game projects, MeUndies, The Gorillaz, and the World Wildlife Foundation are just a few companies and groups who've canceled NFT projects after announcing them due to backlash from customers or supporters.
Note also: this is the NYT treating literally the paid marketing as news in itself.
Crypto! For years, it seemed like the kind of fleeting tech trend most people could safely ignore, like hoverboards or Google Glass. But its power, both economic and cultural, has become too big to overlook. Twenty percent of American adults, and 36 percent of millennials, own cryptocurrency, according to a recent Morning Consult survey. Coinbase, the crypto trading app, has landed on top of the App Store’s top charts at least twice in the past year. Today, the crypto market is valued at around $1.75 trillion — roughly the size of Google. And in Silicon Valley, engineers and executives are bolting from cushy jobs in droves to join the crypto gold rush.
This number came from a study with a sample size of 2,200 people, and which did not disclose anything about how subjects were recruited.
This isn't really representative of anything. People that buy crypto products don't tell us much about the general population. Other than a predisposition towards risk-tolerance in investing.
As David Gerard wrote in his 2017 book Attack of the 50 Foot Blockchain, "Cryptocurrency advocates and lazy journalists like to talk about the 'market cap' of crypto, which is the total number of coins or tokens in existence multiplied by today's price. This is a bogus number that's not actually applicable to anything — it's not money that was put into the crypto, it's not a realisable value like a company market cap, it doesn't affect prices — it's just an easily-calculated number that sounds good in a headline. Trading is so thin in any crypto, even Bitcoin, that you could never realise a fraction of the number."
Yeah, market cap is a meaningless number. It assumes everyone bought at the current price and could cash out at the current price.
As it’s gone mainstream, crypto has inspired an unusually polarized discourse. Its biggest fans think it’s saving the world, while its biggest skeptics are convinced it’s all a scam — an environment-killing speculative bubble orchestrated by grifters and sold to greedy dupes, which will probably crash the economy when it bursts.
I’ve been writing about crypto for nearly a decade, a period in which my own views have whipsawed between extreme skepticism and cautious optimism. These days, I usually describe myself as a crypto moderate, although I admit that may be a cop-out.

This is a statement desperately in need of some links. Although Roose has linked to his writing quite liberally throughout this article, it certainly doesn't show "extreme skepticism", nor for that matter does his optimism seem particularly cautious. This article notably doesn't seem to link to his August 2021 Times article about the "Pudgy Penguins" NFT project, which served to lend the project legitimacy and pump the price before the group later attempted to scam a prospective buyer of the company. No follow-up was ever published—this is a recurring theme for the articles Roose writes about various crypto projects, as you will see throughout this commentary.

Roose has publicly advocated for journalists who write about crypto to be able to buy and sell cryptocurrencies and NFTs, despite himself acknowledging the "strong biasing effect" it would have and that the traditional finance equivalent of this behavior is prohibited by most reputable publications. He holds the cryptoroose.eth ENS domain (which he bought in October for $21... plus another $136 in transaction fees.)

I agree with the skeptics that much of the crypto market consists of overvalued, overhyped and possibly fraudulent assets, and I am unmoved by the most utopian sentiments shared by pro-crypto zealots (such as the claim by Jack Dorsey, the former Twitter chief, that Bitcoin will usher in world peace).
"But other than that, Ms. Lincoln, how was the play?"
But as I’ve experimented more with crypto — including accidentally selling an NFT for more than $500,000 in a charity auction last year — I’ve come to accept that it isn’t all a cynical money-grab, and that there are things of actual substance being built. I’ve also learned, in my career as a tech journalist, that when so much money, energy and talent flows toward a new thing, it’s generally a good idea to pay attention, regardless of your views on the thing itself.
Let him bring evidence! Not empty claims of aspirations untethered to reality.
I can see we're going to need that "[citation needed]" stamp a lot
There are so many bubbles in tech that amount to nothing ... Can pay attention to them but mostly it's just noise.
Absolutely agree with this point—however he is conflating "keeping an eye on something" with "keeping an open mind about something," and "keeping an open mind about something" with "giving something the benefit of the doubt."
My strongest-held belief about crypto, though, is that it is terribly explained.
so brave
Because it's all a scam wrapped in technical and financial obscurantism. And the best case in point is probably this article which borders more on apologetics than journalism.
On the other hand, I observed that my strongest-held belief about crypto, though, is that it not that it is terribly explained, but rather, it is altogether terrible.
Recently, I spent several months reading everything I could about crypto. But I found that most beginner’s guides took the form of boring podcasts, thinly researched YouTube videos and blog posts written by hopelessly biased investors. Many anti-crypto takes, on the other hand, were undercut by inaccuracies and outdated arguments, such as the assertion that crypto is good for criminals, notwithstanding the growing evidence that crypto’s traceable ledgers make it a poor fit for illicit activity.
Why is it that critics are undercut by inaccuracies and outdated arguments, but pro-crypto people are just poorly-researched?
As I explored in my Spaces with Angie the other day, I come to this with a very different lens: from the point of view of software and systems architecture, cryptocurrencies are computationally inefficient, fragile, demonstrably unable to scale to global levels, and - most damning - introduce an incredibly broad and dangerous attack surface. Whether or not you agree with the philosophy/economics behind cryptocurrencies, they are - simply put - a software architecture disaster in the making.
According to Chainalysis, illicit addresses received $14 billion in 2021, almost twice the amount they did in 2020. Roose uses as an example the case of two alleged criminals whose level of incompetence reportedly includes storing private keys in Dropbox cloud storage, and keeping a file on their desktop called "passport ideas", and yet even they operated for 5 1/2 years before being arrested.
Illicit activity is more than financial: "Abuse and harassment on the blockchain". Blockchain is incompatible with GDPR and the transactions contain actual illicit content which makes hosting a node actually illegal.
So even if this is true:
  1. There are cryptos where you struggle to see on-chain activity: Monero/Zcash
  2. There are layer 2 designs that obfuscate transactions
  3. There is the ability to bridge between chains to make tracking increasingly more challenging
  4. There are on-chain obfuscation technologies like Tornado Cash and Samurai
  5. Part of the nature of the illicit activity that crypto enables is as a pretense for integration in money laundering

Notwithstanding that, yes, competent criminals can absolutely use crypto for illicit activity—isn't the flip side of this argument that blockchain ledgers are fundamentally privacy-less? If the argument is that it's easy to track criminals through crypto ledgers, then it would be easy to track anyone through them. Especially the average person, who doesn't know how to obfuscate their activity.

In what universe is it a good idea for everyone's financial transactions to be publicly available (especially to, as this very sentence implies, to law enforcement)? "Debunking" this anti-crypto argument only forms a stronger, much more critical one.

What I couldn’t find was a sober, dispassionate explanation of what crypto actually is — how it works, who it’s for, what’s at stake, where the battle lines are drawn — along with answers to some of the most common questions it raises.
No technology is "sober" or "dispassionate" in its creation, nor is it neutral or apolitical, and thus anyone who is claiming to view it from that perspective is DEFINITELY selling you something.
Roose claims to be giving "the view from nowhere" but his entire thesis here is loaded with all these assumptions that somehow somewhere there actually is a "there" there and yet he can't even point to it. Seems more like an article of faith than a reasoned position.

This guide — a mega-F.A.Q., really — is an attempt to fix that. In it, I’ll explain the basic concepts as clearly as I can, doing my best to answer the questions a curious but open-minded skeptic might pose.

Crypto boosters will likely quibble with my explanations, while dug-in opponents may find them too generous. That’s OK. My goal is not to convince you that crypto is good or bad, that it should be outlawed or celebrated, or that investing in it will make you rich or bankrupt you. It is simply to demystify things a bit. And if you want to go deeper, each section has a list of reading suggestions at the end.

Crypto will be transformative

Understanding crypto now — especially if you’re naturally skeptical — is important for a few reasons.

While I appreciate Kevin’s attempt to “explain” crypto to the masses, his very introduction is problematic. Why would understanding crypto be of particular importance for the “naturally skeptical?” Wouldn’t it make more sense to posit that understanding crypto was of greater immediate importance to those likely to invest money that perhaps they couldn’t afford to lose? Isn’t it more likely that the “naturally skeptical” are probably more familiar with how crypto works than the “naturally embracing” given the amount of pro-crypto propaganda to which we are constantly bombarded? And even the use of the term “naturally” is itself intriguing and telling—suggesting that skepticism is likely to stem from a certain form of romantic and emotional uniformed resistance to change a la Larry David rather than from the application of reason and the too-rare employment of critical thinking.

To fully explain crypto to the masses, one might be forgiven for thinking that priority number one should be to carefully and fully describe the manifest financial risks, and to explain to the innocent how crypto is anchored in, and supports, a vision of society in which public institutions and functions are replaced by private parties. And how that vision naturally aligns with, and advances, a political agenda that undermines progressive ideas of society and government, regardless of one’s personal views of how it might be employed to advance a particular noble or progressive cause. Kevin wants us to know that not every person that invests in crypto does so out of pure selfishness, or to support regressive frameworks of governance. That is undoubtedly true, but it entirely misses the point.

The first is that crypto wealth and ideology is going to be a transformative force in our society in the coming years.
Surprised this is a declaration that it is inevitable, not even couched with "is poised to be a transformative force".
This is where Roose goes from being objective to prescriptive. With no justification. Just that crypto is "inevitable" for no reason.
How is this at all demystifying/explaining? This is an opinion, unsupported by anything other than hopes and dreams of unicorns that fart rainbows.

Okay, so I sort of see what he's going for here in his clumsy way. There is a libertarian bent that's sort of meshing with crypto and web3 - crypto has been absorbed into the right wing part of tech.

The wealth could be interesting, but this is also something that is easily questioned.

Technolibertarianism has been around longer than crypto, though—why are we now taking it on faith that it will be a "transformative force.. in the coming years"?
You cannot write this line then refuse to engage with the political thought that has influenced crypto. You just can't. You have to talk about what ideology that wealth is going to be used to advance. Talk about the candidates they are giving money to who support evil things. Talk about something please Kevin.
You’ve heard about the overnight Dogecoin millionaires and Lamborghini-driving Bitcoin bros. But that’s not the half of it. The crypto boom has generated vast new fortunes at a clip we’ve never seen before — the closest comparison is probably the discovery of oil in the Middle East — and has turned its biggest winners into some of the richest people in the world, essentially overnight. Some riches could vanish if the market crashes, but enough has already been cashed out to ensure that crypto’s influence will linger for decades.
This links to a Kevin Roose article in the NYT about Glauber Contessoto, who took all his savings and borrowed money to put ~$250,000 into Dogecoin, and was boasting holdings worth $2 million when this article was written in May 2021—which was also when Dogecoin reached its all-time-high of around $0.70. Dogecoin is currently priced at around $0.12 and the "Dogecoin millionaire" is back to being a hundred-thousand-aire who serves to inspire others to make enormously risky decisions and hold their positions beyond all reason. Roose, of course, has not written about this part.
Yeah, like Molly said, he's doing the thing where he's counting unrealized gains, which countless media outlets do in crypto puff pieces. Just completely inaccurate to say this.
The other "half of it" is that it's a zero-sum game so for every dogecoin millionaire there's hundreds of people who lost everything. All to produce ... nothing ... just a giant financial redistribution game with no economic output.
This is lunacy. Petroleum is a one-time endowment based on millions-year old organic material found beneath the earth's surface, whereas crypto is bringing in suckers in a zero sum game. It's really not a good comparison whatsoever, and it is deceptive to try to frame crypto in this way that portrays it as a free "found" natural resource.

In the sense that it has made a lot of already powerful and wealthy white men more powerful and more wealthy, this may be true.

And we know how well the discovery of oil in the Middle East did for global politics.

"Some" is doing a lot of work here. Considering it's all paper wealth tied up in fictitious assets. The whole thing could vanish overnight.
How was this conclusion reached?
Yet more of these pronouncements pulled from thin air, after he tried to portray himself as an honest broker at the start of the piece. We cannot be the only ones who see this huge discrepancy, can we?
I mean even if it's true, it's not doing him any favours. All it's doing is solidifying the problematic argument that some people have found someone else to hold the bag.
If taken as true, literally all he's done here is gesture at a far, far more important question than what he's talking about: who are these people that are now fabulously wealthy? What do they think about how the world should be run? What are they doing with it? If this influence will linger, what do they intend to influence?
Crypto’s madcap, meme-crazed online culture can make it seem frivolous and shallow. It’s not. Cryptocurrencies, even the jokey ones, are part of a robust, well-funded ideological movement that has serious implications for our political and economic future. Bitcoin, which emerged out of the ashes of the 2008 financial crisis, first caught on among libertarians and anti-establishment activists who saw it as the cornerstone of a new, incorruptible monetary system. Since then, other crypto realms have fashioned similarly lofty goals, like building a decentralized, largely unregulated version of Wall Street on the blockchain.

Please explain to me one unifying ideology of cryptocurrency that's also "robust." If it's libertarianism, sure, I actually believe that, but not for the reasons you think — crypto is the dream libertarian society, where people are tricked in a totally legal way into enriching the people that rigged the thing that people are tricked into buying.

If it's literally anything else, well, who knows what it is, he never says.

Also this is SO not "sober, dispassionate". This is an argument that gives it credibility.
Well-funded is an important observation. As I often observe, cryptocurrency is just the same old power structures but with shiny new technology.
I really wish he would describe this ideology he keeps referring to, rather than just vaguely alluding.
was built by
We are already starting to see a swell of crypto money headed toward the U.S. political system. Crypto entrepreneurs are donating millions of dollars to candidates and causes, and lobbying firms have fanned out across the country to win support for pro-crypto legislation. In the coming years, crypto moguls will bankroll the campaigns of crypto-friendly candidates, or run for office themselves. Some will peddle influence in the familiar ways — forming super PACs, funding think tanks, etc. — while others will try to escape partisan gridlock altogether. (Crypto millionaires are already buying up land in the South Pacific to build their own blockchain utopias.)
How's that going so far? Also pretty weird to describe libertarian seasteading as simply "escap[ing] partisan gridlock".
Yeah, I don't recall any of the founders of these citing "partisan gridlock" as the reason for anything that motivated them.
It's so weird how there's never any consideration of the efficacy of any of these efforts he cites.
This one REALLY annoys me. All the hype is around how it'll all be crypto etc. but yeah sure, the cleaners and caterers and boat drivers and all those jobs you feel are beneath you but which are totally necessary are totally not going to be accepting crypto, so how is that all going to work? Also irony of buying up islands that will be no doubt swamped by rising sea levels caused in part by massive environmental impact from energy use of crypto.
Crypto is poised to soon become one of a handful of true wedge issues, with politicians all over the world forced to pick a side. Some countries, like El Salvador — whose crypto-loving president, Nayib Bukele, recently announced the development of a “Bitcoin City” at the base of a volcano — will go full crypto. Other governments may decide that crypto is a threat to their sovereignty and crack down, as China did when it outlawed cryptocurrency trading last year. The divide between the world’s pro-crypto and no-crypto zones could end up being at least as big as the divide between the Chinese internet and the American one, and maybe even more consequential.
Roose also doesn't mention how this isn't going so well, either.

It's difficult to tell exactly how much Bitcoin they have and what their average cost basis is. Protos attempted an analysis several months ago (though it doesn't include the newest buys) that showed Bukele is down 15% on his Bitcoin purchases. The IMF also basically said "no loan if you have crypto", and they have crypto.

It is the HEIGHT of ignorance to not include how badly it's going there. Just an absolutely insane thing to not include, especially if you're trying to give a "sober" look at it.
How does he mention El Salvador without talking about how corrupt and conniving the entire effort is? It's unconscionable. I can't believe Roose is truly this ignorant. He knows just what he is selling.
It's amazing in no small part because Bukele is so obviously self-serving that even Bitcoin maxis on Reddit, who have been waiting for a country to adopt bitcoin with baited breath for a decade, are like "yeah, that's a scam."
The NBC News article that Roose cites inline states, "But several analysts and experts say it's impossible for a project of that magnitude to materialize in the coming years. No technical plan for the project has been disclosed." Furthermore, the first $1 billion that Bukele hopes to raise through "volcano bonds" are earmarked for purposes unrelated to building this supposed Bitcoin City, though those bonds were just paused due to unfavorable market conditions.
There's a lot of army helicopter tours for his wealthy European and American friends, not a lot of road building or pipe-laying.
The vast majority of El Salvadoreans aren't using crypto, and never will!
This is one of the few times I actually want a journalist to talk to an academic because the academic would say "what are you talking about?"
As an academic I would love to ask that question, because it's a good one and what the hell??
In America, we have already seen how crypto can scramble the usual partisan allegiances. Former President Donald J. Trump and Senator Elizabeth Warren, the Democrat from Massachusetts, are united in crypto skepticism, for example, while Senator Ted Cruz, Republican from Texas, is in the same bullish camp as Senator Ron Wyden, the Democrat from Oregon. We have also seen what can happen when the crypto community feels politically threatened, as happened last summer, when crypto groups rallied to oppose a crypto-related provision in President Biden’s infrastructure bill.
Donald Trump just shouted out the Let's Go Brandon Coin at his rally yesterday. Literally promoted its web address to supporters on stage.
It would have been considerably more compelling if Roose could have pointed to some numbers around who has come out in support of or against crypto and in which parties. One could also cherrypick a Republican who supports abortion rights and an anti-abortion Democrat, but most reasonable people wouldn't try to argue that opinions on abortion rights don't heavily follow partisan lines.
What I’m saying, I guess, is that despite the goofy veneer, crypto is not just another weird internet phenomenon. It’s an organized technological movement, armed with powerful tools and hordes of wealthy true believers, whose goal is nothing less than a total economic and political revolution.
This is a lot of crystal balling for someone who was trying to provide something in the neighborhood of "sober and dispassionate".
Also, it's totally another weird internet phenomenon. Just because it's making some people money doesn't change that. It's still impenetrable to most.
Contradicts the "decentralized" message, no?
Absolutely baffling that an editor let him get away with such a handwavy statement about unspecified tools.
I suspect there is much less overlap between the "wealthy" and the "true believers" than Roose posits here. The true believers don't tend to be the ones hoovering up VC investments or spinning up new shitcoins to pump and dump. Some of the wealthy (e.g. some of the folks behind exchanges like Binance and Kraken) parrot true believer talking points, but I suspect those are not so much strongly-held convictions as they are convenient ways to launder their work as ideological rather than money-driven. I talked a little bit about the true believers and those who just repeat the true believers' talking points in This Week In Startups last month.
Yeah, this is the thing, the ideological talking points are very palatable covers for the underlying greed. So it's actually quite hard to tell which is which.

Crypto could be destructive

The second reason to pay attention to crypto is that understanding it now is the best way to ensure it doesn’t become a destructive force later.

In the early 2010s, the most common knock on social media apps like Facebook and Twitter was that they just wouldn’t work as businesses. Pundits predicted that users would eventually tire of their friends’ vacation photos, that advertisers would flee and that the whole social media industry would collapse. The theory wasn’t so much that social media was dangerous or bad; just that it was boring and corny, a hype-driven fad that would disappear as quickly as it had arrived.
Was this really the case? I don't recall this "collapse" scenario whatsoever, as FB has until 2022 had phenomenal growth year on year, and FB had staying power because everyone's photos were captive to their platform.
This is a bit like the claim that everyone hated the internet in 1993.
The skepticism that I remember from 2009 was largely focused on the fact that Facebook didn't seem to have a viable path to profitability based off straight ad sales... which was true. They had to become a vast data harvesting machine rather than a mere social media platform. Ditto for Twitter.

This is easily the most egregious "citation needed" yet, because I cannot think of anyone outside of a circle of complete doofuses who would have predicted this before like, 2011?

It's Writing 101 to cite anything you use as an argument. Who edited this?

This is kind of dramatic - I'd like to see the proof that a "collapse" was a commonly discussed scenario.
No one in "the early 2010s" argued that social media would just go away. The prototypes of social media were already over a decade old, and the core product, micro-updates, chat functionality, and asynchronous communication, was already a deeply well proven feature for a decade before that via message boards, IRC, ICQ, and MSN messenger. The arguments revolved mostly around specific companies surviving the churn cycle of the 00s, but "will Facebook be the next Friendster?" isn't as useful for painting these un-cited critics as dinosaurs who just didn't get it.
This is absolutely untrue. Maybe mainstream outlets ignored it, but there were plenty of pundits warning about the privacy implications of Facebook way back in 2010. Even mainstream tech outlets couldn't avoid covering it.
What nobody was asking back then — at least not loudly — were questions like: What if social media is actually insanely successful? What kind of regulations would need to exist in a world where Facebook and Twitter were the dominant communication platforms? How should tech companies with billions of users weigh the trade-offs between free speech and safety? What product features could prevent online hate and misinformation from cascading into offline violence?
People absolutely were asking these questions (see Matt Binder's comment above), though Roose seems to have set himself up for the defense of "well sure, but they weren't being loud enough". What does "loud enough" look like? Are the people asking these questions of crypto being loud enough?
Quite a few ethicists were talking about this, but we were mostly in academia so I guess that's not loud enough for him. Here's the entire list of abstracts from ETHICOMP 2011, for example, with plenty of ethical analyses of social media that assumed it would be successful.
By the middle of the decade, when it was clear that these were urgent questions, it was too late. The platform mechanics and ad-based business models were already baked in, and skeptics — who might have steered these apps in a better direction, if they’d taken them more seriously from the start — were stuck trying to contain the damage.
I'm trying to better understand what he is obliquely referring to here. Is he talking about how there was a disincentive to root out fake users, because more users always look better to investors and advertisers? I wish he would be more specific.
I'm totally lost. Why are we still talking about this? I thought this was meant to be a sober explanation of crypto? This feels as if it's extremely subjective and personal commentary.
Aren't platform mechanics and business models pretty well baked into crypto systems too?
Bizarre to place blame on the skeptics not taking the problems seriously, rather than, say, the platforms not taking the skeptics seriously.
Yeah, he's setting up to blame the skeptics for the crooks.
So I've been in tech ethics for almost 20 years now and I was bashing down doors trying to get someone to talk to me (and colleagues too); it's only really since AI came in that we've been actively sought after because finally the big companies realised maybe this tech thing needs a bit more than technical know-how. So yeah, we were there, nobody was listening.

This whole section seems to oscillate between referring to "pundits," which I assume means media and commentator types, and "skeptics," which could include more researchers, academics, or other experts in the fields. (Where it's referring to anyone in specific at all, that is.) But which of those groups are supposed to have the power to "steer" anything?

Or to quote Max Read on this one: "I'm also increasingly less convinced that a 'better' tech journalism, by any definition of the word, would have made a particular difference in how the internet of the 21st century has unfolded so far. What strikes me looking back at tech journalism of the 2000s is how fast Facebook (to take the most prominent example) was growing: zero to 500 million users in just five years. I'm not sure any analysis or criticism, no matter how damning, could have slowed that kind of planetary momentum — and there was plenty of good analysis and criticism of Facebook at the time. What was missing was a coherent, organized, well-resourced political movement that could have matched Facebook's size, speed, and capital."

Are we making the same mistake with crypto today? It’s possible. No one knows yet whether crypto will or won’t “work,” in the grandest sense. (Anyone who claims they do is selling something.) But there is real money and energy in it, and many tech veterans I’ve spoken to tell me that today’s crypto scene feels, to them, like 2010 all over again — with tech disrupting money this time, instead of media.
Plenty of technologists have already pointed out long lists of issues around scaling, unsustainable environmental cost, etc. that point to it not working. Proponents, for their part, have mostly responded to those with "it's early days!", handwaving at things like Ethereum's eternally 6-months-away shift to PoS, or pointing at some theoretical concepts that have never been put into practice (for years now), partially because some of them rely on breaking laws of mathematics or solving as-yet-unsolved computer science problems.
I find this "selling something" point odd and inconsistent with the gleeful rundown of the wonders of crypto in the previous section. In fact, ironically, isn't it that most of the pundits are not trying to sell something, and in fact are trying to keep people away from selling/buying/trading crypto? It's a lazy rhetorical device that paints the entire set of skeptics as being self-interested and just descends into "both sidesism". The more I write about it, it makes me more annoyed.
This reminds me a bit of that recent Vice article about nocoiners which spoke about "the rise of a nocoiner industry", which seemed to overstate things just a bit (particularly if compared to the money people are trying to make in the "coiner industry"). There are hardly piles of money to be made in crypto skepticism.
This is incredibly hand wavy and meaningless — which veterans and veterans of what? In fact, what's striking is the huge number of veterans of the dot-com and the actual computer science field who have been outspoken critics of crypto. But here, all that is related are the supposed views of some amorphous, undefined set of "tech veterans" in order to lend credibility to this idea that this crypto has staying power.
Vague appeal to authority... No mention of the tech veterans (David S. H. Rosenthal, Grady Booch, Nicholas Weaver, James Mickens, many others) who are deeply skeptical.
"Many tech veterans I've spoken to"? This would get me a call from an editor. The call would ask me who they were, and why their arguments were so bland that I could not quote at least one of them in my piece.
If they’re wrong, they’re wrong. But if they’re right — even partly — the best time to start paying attention is now, before the paths are set and the problems are intractable.
The gist of this piece does not feel like "pay attention to crypto so you can make sure it's responsibly developed", it feels a lot more like "put your money in and buy some apes while it's still early".
It frustrates me that Kevin says the solution is to pay attention to the problems and then does not pay attention to the problems.
The third reason to study up on crypto is that it can be genuinely fun to learn about.
Sure, a lot of it is dumb, shady or self-refuting. But if you can look past the carnival barkers and parse the convoluted jargon, you’ll find a bottomless well of weird, interesting and thought-provoking projects. The crypto agenda is so huge and multidisciplinary — drawing together elements of economics, engineering, philosophy, law, art, energy policy and more — that it offers lots of footholds for beginners. Want to discuss the influence of Austrian economics in Bitcoin development? There’s probably a Discord server for that. Want to join a DAO that invests in NFTs, or play a video game that pays you in crypto tokens for winning? Dive right in.
This is what he warned about with his social media analogy. This should not be "looked past" but should be a major part to keep in mind during your "research" into crypto.
That's a dead giveaway: Austrian economics has been largely rejected by every contemporary economist. It's like Ayn Randian money.
Would you tell anyone to just dive right into the stock market like he's doing right here? Whatever the window dressing is on the particular crypto project (it's a game! a community!), it's a speculative asset. This is so irresponsible to his readers.

The earth-shattering whiplash from "Join a discord server to talk about a thing!" to "Get financially involved in a project with absolutely no information." The previous paragraph described how fun it is to "study up" on crypto. How in the world did this jump happen?

The last near-decade of tech journalism has almost started to do a decent job of questioning the financial incentives of companies that collect massive amounts of user data to profit off its customers. And somehow after years of "If you're not paying, you're the product," NYT is suggesting playing a game that claims you'll financially benefit from playing it, with absolutely no interrogation of how that model works or is sustainable. Just galling.

Crypto is a generational skeleton key

Mind you, I am not suggesting that the crypto world is diverse, in the demographic sense. Surveys have suggested that high-earning white men make up a large share of crypto owners, and libertarians with dog-eared copies of “Atlas Shrugged” are likely overrepresented among crypto millionaires. But it’s not an intellectual monolith. There are right-wing Bitcoin maximalists who believe that crypto will liberate them from government tyranny; left-wing Ethereum fans who want to overthrow the big banks; and speculators with no ideological attachments who just want to turn a profit and get out. These communities fight with one another constantly, and many have wildly different ideas about what crypto should be. It makes for fascinating study, especially with a bit of emotional distance.

Roose is again citing questionable surveys to make broad claims... I don't doubt his conclusion in this particular case, but he really needs to work with better data. The poll in question is from the Gemini crypto exchange and featured a "total sample of 3,000 U.S. adults, ages 18 to 65 with $40,000 or more in household income. Survey respondents were polled from October 19-November 16, 2020, and included 921 self-identifying current cryptocurrency owners and 1,697 consumers who were interested in learning more about cryptocurrency." The Cheddar News article he's linking here tries to claim that it also suggests crypto is somehow becoming more diverse, which is the more eyebrow-raising claim, but at least not one that Roose has chosen to make.
This ridiculous idea that Ethereum proponents are leftist keeps cropping up, when the actual argument seems to be that they are "slightly left of the Bitcoiners". See this thread and David Gerard's follow-up. Are there leftists in crypto? Sure. Are they a notable portion of crypto proponents? eeeehhh. Are Ethereum fans generally leftists? No.
Yeah, this is absolutely just odious BS.
My man can I introduce you to the hyperlink? It's a way to take a link to the thing you're citing and show people it so they don't think you are just making stuff up based on intuition.
Yeah the dichotomy between Ethereum and Bitcoin is at best a divide between Glen Weyl's influence and Austrian economics influence, but it's all rotted into the same morass.
Does such a thing exist?
He probably means like the hedge fund guys who will trade literally anything and ignore the externalities. He probably shouldn't use the phrase "no ideological" to describe that worldview though.
And if you do learn some crypto basics, you might find that a whole world opens up to you. You’ll understand why Jimmy Fallon and Steph Curry are changing their Twitter avatars to cartoon apes, and why Elon Musk, the richest man in the world, spent a decent chunk of last year tweeting about a digital currency named after a dog. Strange words and phrases you encounter on the internet — rug pulls, flippenings, “gm” — will become familiar, and eventually, headlines like “NFT Collector Sells People’s Fursonas for $100K In Right-Click Mindset War” won’t make you wonder if you’re losing your grip on reality.
This is basically a "come into the club, the door's open" — once again a sober, dispassionate explanation.
Because they're being paid to promote these projects to their large audiences without disclosing? That's certainly why a lot of the influencers (including mainstream celebrities like Justin Bieber) seem to be getting in on it. The answer, as usual: money.
He's not going to mention the Hollywood talent agency that has invested in OpenSea and represents all these celebs who are pushing this shit, at all, is he?
"Mapping the celebrity NFT complex" by Max Read. February 2, 2022.
Crypto can also be a kind of generational skeleton key — maybe the single fastest way to freshen your cultural awareness and decipher the beliefs and actions of today’s young people. And just as knowing a little about New Age mysticism and psychedelics would help someone trying to make sense of youth culture in the 1960s, knowing some crypto basics can help someone perplexed by emerging attitudes about money and power feel more grounded.
So can reading an intro textbook on macroeconomics and monetary theory which imparts far more knowledge than Roose clearly has done in this piece.
Is it just me, or is Roose suggesting in this paragraph that crypto is a cause rather than a symptom of young peoples' choices to engage in risky monetary speculation, or adopt right-libertarian political beliefs? It seems like understanding the growth of the online right-wing and the economic issues facing young people might be more eye-opening than learning what "gm" means.

This is such a hokey, ignorant, boneheaded way of evaluating both 60s youth culture and today's culture, especially with young people's approaches to money and power.

The reason that young people might feel a grievance toward the systems in place because the systems have been repeatedly proven to be unfair and built to provide for previous generations with no interest in protecting the future ones, with increasingly expensive privatized healthcare, impossibly expensive college with onerous debt, and a massive barrier between the average person and any kind of wealth accumulation.

Knowing about this doesn't explain jack shit about cryptocurrency other than the intentions of some to take advantage of the climate of desperation and sadness from anyone born since, I dunno, 1980. Also, where is the citation or research or proof that young people give a shit about this?

Ali Breland covered the subject with actual clarity about the strain of nihilism that is driving a lot of Gen Z crypto adoption, and "everything's fucked so why not?" is not something I'd really chalk up as a positive.

I absolutely hate the idea that crypto is "generational." It flies in the face of everything we know about issues we know the vast majority of young people care about.

Something like half of white millennials and half of white Gen Z voted for Trump, yet no one would classify younger generations as conservative. These are the same demographics at play here, discounting whole swaths of people.

Again, I don’t really care whether you emerge from these explainers as a true believer, a devoted skeptic or something in between. Participate or abstain as you wish! All I’m after is understanding — and possibly, a little relief from the question that has consumed my social and professional life for the past several years:

“So … can I ask you a question about crypto?”

That sounds fair perhaps, but it entirely ignores the fact that choices made by individuals have consequences for all of society. This is not merely a personal investment choice whose effects are limited to the financial realm. Indeed, Kevin himself notes elsewhere that: “It’s an organized technological movement, armed with powerful tools and hordes of wealthy true believers, whose goal is nothing less than a total economic and political revolution.” So is he saying to “participate or abstain” in a revolution as you wish, as if the results of that revolution will be limited to the willing participants thereof?
At this point I really have to ask if Kevin got that understanding before or after writing a 14,000-word explainer on the subject. Because so much of this section, and everything prior to it, is less about crypto itself and more about Kevin's relationship to the topic.

Let’s start from the beginning: What is crypto?

A decade or two ago, the word was generally used as shorthand for cryptography. But in recent years, it’s been more closely associated with cryptocurrencies. These days, “crypto” usually refers to the entire universe of technologies that involve blockchains — the distributed ledger systems that power digital currencies like Bitcoin, but also serve as the base layer of technology for things like NFTs, web3 applications and DeFi trading protocols.

It's really bizarre that Roose describes this as a no-nonsense explainer for people trying to figure out what on earth all this crypto stuff even is, but then also uses all this jargon like "NFTs", "web3", and "DeFi" in this long introductory section without describing what any of these terms mean until much, much later. It seems like he can't find his audience.

Ah yes, blockchains. Can you remind me, without going into too much technical detail, what they are?

At a very basic level, blockchains are shared databases that store and verify information in a cryptographically secure way.

"Validation/verification" has a specific computer science meaning and like many of these things they don't tend to translate well into everyday jargon. Using this term in this way is likely to mislead the average reader, who would likely interpret this to mean that there is some verification of the accuracy of any information that is added to a blockchain. The verification that I believe he is intending to describe is other nodes verifying that some data exists on the chain, not verifying that the data is any good, and he should be much more explicit about that.
You can think of a blockchain like a Google spreadsheet, except that instead of being hosted on Google’s servers, blockchains are maintained by a network of computers all over the world. These computers (sometimes called miners or validators) are responsible for storing their own copies of the database, adding and verifying new entries, and securing the database against hackers.
Just going to handwave that one I guess. "It's secure because.. uh.. miners". Spoiler: securing technological systems is never that simple.
This is a clunky explanation that starts with the worst comparison.

So blockchains are … fancy Google spreadsheets?

Sort of! But there are at least three important conceptual differences.

First, a blockchain is decentralized. It doesn’t need a company like Google overseeing it. All of that work is done by the computers on the network, using what’s called a consensus mechanism — basically, a complicated algorithm that allows them to agree on what’s in a database without the need for a neutral referee. This makes blockchains more secure than traditional record-keeping systems, proponents believe, since no single person or company can take down the blockchain or alter its contents, and anyone trying to hack or change the records in the ledger would need to break into many computers simultaneously.

Many people have addressed the myth that blockchains are decentralized.
Software architect POV stepping in here: the author does not understand the meaning of decentralized, and how one can distribute data but still centralize control (the distinction of permissioned versus permissionless blockchains).
Yeah he's making a very strong claim here. What he should be saying is something akin to: blockchains can potentially be decentralized.
Have these computers become sentient? Who owns the computers? The networks?
"Proponents believe" is doing a whole lot of work in this sentence. Not going to challenge that one at all? Or ask what folks who are not financially incentivized to make this technology sound good have to say?
Sure they can. The controllers of large mining pools can perform an attack. The powers that be can decide to fork a chain. The maintainers of the code can change the code. One whale can swing a vote on changing functionality.
This is not some axiom of reality, there's no universal power enforcing this, this is just uncritically repeating the crypto sales pitch.
Is he arguing the only way to attack a blockchain is to... compromise a bunch of miners that other people control??
The second major feature of blockchains is that they’re typically public and open source, meaning that unlike a Google spreadsheet, anyone can inspect a public blockchain’s code or see a record of any transaction. (There are private blockchains, but they’re less important than the public ones.)
This analogy is really falling apart... you could publish a Google spreadsheet to make it publicly visible too, and whether the blockchain itself is open-source or not is a separate topic to whether it's a public or private blockchain (there are open-source private blockchains). We also seem to be working up to the suggestion that blockchains are the only reasonable way to verify that data hasn't changed, which is far from accurate.
Third, blockchains are typically append-only and permanent, meaning that unlike with a Google spreadsheet, data that’s added to a blockchain typically can’t be deleted or changed after the fact.
This is a bug, not a feature.
Again, "typically" doing a lot of heavy lifting here. If something is immutable, then data can't be changed or deleted. If data "typically" can't be deleted or changed after the fact, then it's not immutable, and now you've just done a lot of extra work to come up with something that's kind-of immutable.
And this is a bad thing because of loads of law (e.g. GDPR). Also all the stuff Molly wrote about.

Got it. So blockchains are public, permanent databases that nobody owns?

You’re getting it!

One could just as easily argue that everyone owns it—everyone has access to your data, including those same tech giants that blockchain proponents usually oppose doing data collection.

Roose has inadvertently refuted a point that a lot of blockchain proponents fall back on. "In web3 you will own your own data!" No, no one will own it once you put it out there, including you, because you won't be able to change or delete it.

Molly made the point I was going to make. "You can sell your data if you want!" Well, no, because one it's not worth anything if it's not bundled with a million other data points and two, you're already giving it away for free because anyone can download the chain and run their own chain analysis tools to scrape out whatever they want.

Now remind me: How are blockchains related to cryptocurrencies?

Blockchains didn’t really exist until 2009, when a pseudonymous programmer named Satoshi Nakamoto released the technical documentation for Bitcoin, the first-ever cryptocurrency.
Demonstrably false. Blockchains started in 1991 with Stornetta and Haber. Everything that is now called "blockchain technology"—shared Merkle tree ledgers—has existed and been used since the 1990s. The new thing is "blockchain" the marketing term.
Bitcoin used a blockchain to keep track of transactions. That was notable because, for the first time, it allowed people to send and receive money over the internet without needing to involve a central authority, such as a bank or an app like PayPal or Venmo.
No, it allowed them to send and receive bitcoin.
Many blockchains still perform cryptocurrency transactions, and there are now roughly 10,000 different cryptocurrencies in existence, according to CoinMarketCap. But many blockchains can be used to store other kinds of information, too — including NFTs, bits of self-executing code known as smart contracts and full-fledged apps — without the need for a central authority.
"many"? There are no cryptocurrency-free blockchains, at least not public ones, which is what Roose just established we're talking about here.
He's a bit muddled here, treating these as distinct concepts.

OK, but can we back up a second? Weren’t tech people telling us, years ago, that crypto was a new and exciting form of money? And yet, nobody I know pays their rent or buys groceries in Bitcoin. So were those people just … wrong?

Good question. It’s true that today, hardly anyone pays for things in cryptocurrency. In part, that’s because most merchants still don’t accept crypto payments, and hefty transaction fees can make it impractical to spend small amounts of cryptocurrency on daily living expenses. It’s also because the value of popular cryptocurrencies like Bitcoin and Ether has historically gone up, making it somewhat risky to use them for offline purchases. (The counterexamples are usually cited with pity, like the guy who, in 2010, bought two Papa John’s pizzas using Bitcoin that was worth about $40 at the time, but would be worth roughly $400 million today.)
When will he get to the part about blockchain tech being inherently inefficient and thus more expensive than centralized alternatives?

Many merchants used to accept crypto and then eventually stopped, because no one wanted to use it and the experience was awful. David Gerard has written about it extensively.

The vast majority of places that do still accept it, are immediately selling it and converting it to cash.

Also the taxes for paying with it are brutal.

I love how he says "historically gone up" instead of "volatility," which is the real reason.

I have read a lot and found a lot of Kevin's writing frustrating, but this is the first flat-out offensive and irresponsible thing he's said. What a disgraceful thing to say! It has not "historically gone up" unless you also add that it has historically gone down. This is horrendously irresponsible because now any cryptocurrency shitlord can now say that "The New York Times said that BTC and ETH have historically gone up".

Just absolutely unbelievable.

It’s also true that the value of cryptocurrencies has grown enormously since the early Bitcoin days, despite them not being most people’s daily spending money.
All of them? "Value" is also a bold word to use here.
He just said there are 10,000 cryptocurrencies on CoinMarketCap before this. How many of those have actually gone up in value? Irresponsible once again to make readers of this "beginner's guide" to believe they could just put their money in any shitcoin and number go up.
I really want to echo this last sentence from Matt, it is absolutely totally irresponsible.
Part of that growth is speculation — people buying crypto assets in hopes of selling them for more later on. Part of it is because the blockchains that have emerged since Bitcoin, like Ethereum and Solana, have expanded what can be done with this technology.
And some crypto fans believe that the prices of cryptocurrencies like Bitcoin will eventually stabilize, which could make them more useful as a means of payment.
Believing things does not make them true. There's no economic mechanism by which this could occur so it seems terribly implausible.
Concur. Also, the vast majority of excitement in this space is NOT because of stabilization, it's because of the speculation that they will go up in value. TO THE MOON. For the writer to state this in such a blasé way does not track at all with the reality of what is being talked about.
This is at least the closest he seems to have come to an actual point, which is that the idea that a cryptocurrency can simultaneously be useful as everyday currency and that people will become fabulously wealthy by hodling them are fundamentally incompatible. That's somewhat inconvenient to his overall message, though, which is I suppose why he stuck this bit in, even though as Anonymous 3 said there's no reason this would come to be.
Satoshi first devised Bitcoin as a currency. When it was clear that would never work – see my earlier architecture comments — then crypto folks pivoted to a) L2 architectures which are just fiat but with extra steps and b) it's not a currency, it is a store of value!

What are the actual uses of crypto, beyond financial speculation?

Right now, many of the successful applications for crypto technology are in finance or finance-adjacent fields. For example, people are using crypto to send cross-border remittances to family members abroad and Wall Street banks using blockchains to settle foreign transactions.
We've got another tiny study, folks! A study by and the company behind Stellar (a project to make cross-border transactions via crypto) sampling ~2,000 Americans. No indication of how these people were recruited, other than that they are reportedly "census-balanced".

The cited article states that "Wells Fargo and HSBC Bank said on Monday they will use a blockchain-based product for settling matched foreign exchange transactions." (Emphasis mine). There is no indication that this is actually a current-day use, as Roose claims, and in fact that seems spectacularly unlikely given the agreement was reached four months ago and the banking industry is not exactly known for its speed in technological change.

Clicking through the links to get to the press release also reveals that they are talking about a "blockchain-based solution" and a "shared, private ledger" which "us[es] blockchain technology"—all hallmarks of using pretty standard technology but trying to spin it for a marketing splash because they used the word "blockchain". Regardless, even if the tech they are planning to use could be described as a blockchain and it isn't all marketing fluff, Roose stated above that this article is not intended to discuss private blockchains.

Yeah. No. No major bank is using permissionless blockchains. Zero. Nada. Nope. Project Hamilton doesn't use a blockchain. Any main bank work I have encountered — and I work in this space! — has at the very most been playing with permissioned blockchains, a very very very VERY different beast.
The crypto boom has also led to an explosion of experiments outside of financial services. There are crypto social clubs, crypto video games, crypto restaurants and even crypto-powered wireless networks.
Ah yes, this is the Kevin Roose article where he dutifully repeats statements by members of the group that they are the "anti-crypto crypto club" and "a place for my creative peers who were so skeptical of tech and finance to have a little light at the end of the tunnel", despite that they are a16z-backed.
This also does not exist yet: "Grub Street reports that a business claiming to be the world’s 'first NFT restaurant' is setting down roots in New York City in 2023."
Another Roose puff piece, this one on Helium. At least this one exists in practice today and is not vaporware, though it is not widely used. An odd thing to call out as a crypto experiment, though, given they literally bolted on crypto years after creating the base premise.

This paragraph is a great example of stuffing a block of text with links to look like there are a lot of credible sources, knowing the reader isn't going to click through them all. Even on its face, none of these make sense as "uses" for crypto (what is a "crypto restaurant" supposed to mean to someone who doesn't stop what they're doing and click through?), but it sure gives the impression there are a lot of uses, right?

In reality, the two of these are basically clubs for crypto people. And the other two are still financial products, one being a job (sweatshop), and the other being a funding mechanism for some wifi hotspots. Calling this an "explosion" of non-financial experiments is bordering on outright deceptive here.

These non-financial uses are still fairly limited. But crypto fans often make the case that the technology is still young, and that it took the internet decades to mature into what it is today. Investors are pouring billions of dollars into crypto start-ups because they think that someday, blockchains will be used for all kinds of things: storing medical records, tracking streaming music rights, even hosting new social media platforms. And the crypto ecosystem is attracting tons of developers — an auspicious sign for any new technology.
It really is not that young. Molly White has made some great points about how long it has taken other technologies to prove themselves, and crypto is lagging.
Yet another paragraph based solely on what "crypto fans" say, with no attempt to address the veracity of it or provide arguments from the skeptical side.
This is just poor tech journalism/analysis. You don't compare something in the 2000s at a higher layer of the stack against the origins of the Internet as a packet switching network from the 1960s. Sheesh.
David Gerard talks about why this is a terrible idea in "Medical records, but on the blockchain — the history of a bad idea". Molly White talks about how it's a terrible idea on Episode 54 of Crypto Critics Corner. Some of the various responses to this idea from those of us annotating this article included "NO NO NO NO NO", "this is a terrible bad bad bad idea", and "as someone who works with medical records every day, please please please do not do this".
David Gerard has an entire chapter on this in Attack of the 50 Foot Blockchain, titled "Case study: Why you can't put the music industry on a blockchain".
Please don't! God, he really picked three of the worst use cases.
The hyperbolic and imprecise use of "tons" should give folks pause.

I’ve heard people calling crypto a pyramid scheme or a Ponzi scheme. What do they mean?

Some critics believe that cryptocurrency markets are fundamentally fraudulent, either because early investors get rich at the expense of late investors (a pyramid scheme), or because crypto projects lure in unsuspecting investors with promises of safe returns, then collapse once new money stops coming in (a Ponzi scheme).

There are certainly plenty of examples of pyramid and Ponzi schemes within crypto. They include OneCoin, a fraudulent crypto operation that stole $4 billion from investors from 2014 to 2019; and Virgil Sigma Fund, a $90 million crypto hedge fund run by a 24-year-old investor who pleaded guilty to securities fraud and was sentenced to seven and a half years in prison.

Can anybody provide an example of a crypto product where this is NOT the case?
They are all Ponzi schemes. That's how they work. It's all about getting in early.
But these cases aren’t usually what critics are talking about. They’re generally arguing that crypto itself is an exploitative scheme, with no real-world value.
I'm pretty sure the critics are talking about "all of the above" and saying there is plenty of sh*t in this show.

And are they right?

Well, let’s try to understand the case they’re making.

Unlike buying stock in, say, Apple, a purchase that (theoretically, at least) reflects a belief that Apple’s underlying business is healthy, buying a cryptocurrency is more like betting on the success of an idea, they say. If people believe in Bitcoin, they buy, and Bitcoin prices go up. If people stop believing in Bitcoin, they sell, and Bitcoin prices go down.

I would argue that this is, in fact, accurate, and the difference between pitch and condemnation is nothing but tone of voice, because this is insane.
Crypto owners, then, have a rational incentive to convince other people to buy. And if you don’t think that cryptocurrency technology is inherently valuable, you might conclude that the entire thing resembles a pyramid scheme, in which you primarily make money by recruiting others to join.
Also, this is the only way they can cash out.
This is where Roose makes a logical jump. The veracity of a technology doesn't necessarily correspond to cashflows in an investment. No amount of belief corresponds to a quantifiable amount of inflow of cash into an investment and, as such, this remains a very dubious claim as the basis for an investment thesis.
Agree, and the fact that Tether is not mentioned a single time in this entire piece, which is the main (highly dubious) conduit for liquidity, should be part of some explanation for why this thing is built on a house of cards. That Tether is completely unbacked and fraudulent is indeed a real valid criticism.

I’m sensing a “but” coming on.

But! Even though there are scams and frauds within crypto, and crypto investors are certainly fond of trying to recruit other people to buy in, many investors will tell you that they are going in with their eyes wide open.
"We all know this is a pyramid scheme, therefore it is not a pyramid scheme."
Perhaps they claim to be fully informed, but I have not found them to spend a whole lot of time informing the folks they're so "fond of" recruiting on the risks...
Plenty of investors go in with eyes wide open to lots of scams. Doesn't make them not scams.
They believe that crypto technology is inherently valuable, and that the ability to store information and value on a decentralized blockchain will be attractive to all kinds of people and businesses in the future. They would tell you they’re betting on crypto the product, not crypto the idea — which, on some level, isn’t all that different from buying Apple stock because you think the next iPhone is going to be popular.
Technology is valuable insofar as it is useful... no such thing as an "inherently valuable" technology.
Inherently valuable but apparently also neutral at the same time. Lovely square to circle there.
This seems unsuppressed by any evidence. Seems like wishful thinking rather than a statement about the utility of the "software".
Would they?
Didn't he have a whole paragraph about ideology?
Apple sells a real physical product that people use and enjoy. What is the use value of a crypto token compared to an iPhone? There is none, and it generates no revenue. So this comparison seems specious.
Matt Huang, a prominent investor, spoke for many crypto fans when he said on Twitter: “Crypto may look like a speculative casino from the outside. But that distracts many from the deeper truth: the casino is a trojan horse with a new financial system hidden inside.”
Does he quote or actually name a single prominent critic here? He sure likes describing what he thinks they are saying, but he only gives an actual microphone to pro-crypto voices?
"And if we learned one thing from the story of the Trojan horse, it's that we should invite them into our cities." This also falls into the trap of assuming "new" == "good", or even "better than what we have".

"None of it does what they claim, all of it is broken, but even if it weren't it would still be terrible."

Literally no interrogation of what that new financial system would entail. Clown shoes.

You can argue with that position, or dispute how much this “new financial system” is actually worth. But crypto investors clearly believe it’s worth something.
I'm glad that we have established that those who are primarily speculators who derive their value from convincing others to invest are publicly stating that they believe it's worth something.

Is crypto regulated?

Only slightly. In the United States, certain centralized crypto exchanges, such as Coinbase, are required to register as money transmitters and follow laws like the Bank Secrecy Act, which requires them to collect certain information about their customers. Some countries have passed more stringent regulations, and others, like China, have banned cryptocurrency trading entirely.

Important to note that they're not registered as brokers or market makers. And nothing about their book making is regulated so they can do all sorts of market manipulation and get away with it under US law.

Money transmission, especially in places like Wyoming, is a pay-to-play operation that you can straight up buy. It's the softest touch of all regulation.

But compared with the traditional financial system, crypto is very lightly regulated. There are few rules governing crypto assets like “stablecoins” — coins whose value is pegged to government-backed currencies — or even clear guidance from the Internal Revenue Service about how certain crypto investments should be taxed. And certain areas of crypto, like DeFi (decentralized finance), are almost completely unregulated.
By lightly regulated they mean they're subject to almost no regulation and can screw their client all day every day. There's zero regulation that prevents market manipulation of crypto assets. It's basically like we've reversed the clock back to 1920s era regulation.
There are certainly existing regulations that should apply, given all these things are basically unregistered securities. But they sure have been slow to be enforced.
The implications of that are apparently not important enough for a mention here, huh?
Of which the major one (Tether) is a giant fraud that rivals Madoff's fund in terms of illicit representation.
Again, wish Roose had brought in prominent critics with real academic papers and valid concerns about the contagion to financial products underpinning our economy, investment capital, and retirement accounts.
This is false. These products ARE subject to regulation—the purveyors of the products have chosen to ignore the rules!
Partly, that’s because it’s still early, and making new rules takes time. But it’s also a property of blockchain technology itself, much of which was designed to be hard for governments to control.
Again, it's not early. Also, while he's quick to portray parallels for crypto by drawing on previous phenomena like social media or "the Internet," when it comes to the case against crypto, why doesn't he bring up credit default swaps, mortgage backed securities and the catastrophe of 2008?
He sure does say "it's still early" a lot for an article entitled "The Latecomer's Guide to Crypto"...

This question comes from the (apparently crypto-curious) rapper Cardi B: Is crypto going to replace the dollar?

Sorry, Cardi. The dollar is the world’s reserve currency, and dislodging it would be a huge, costly project that isn’t likely to happen any time soon. (To give just one small example of the enormity of the task: every financial contract that is denominated in dollars would have to be re-denominated in Bitcoin or Ether or some other cryptocurrency.

There are also technical hurdles crypto needs to overcome if it’s ever going to displace government-issued currency. Today, the most popular blockchains — Bitcoin and Ethereum — are slow and inefficient compared with traditional payment networks. (The Ethereum blockchain, for example, can process only about 15 transactions per second, whereas Visa says it can process thousands of credit card transactions per second.)
Read as: Impossible problems in computer science.
Yes! This is handwaved over and it really annoys me. There are fundamental technical problems that can't be solved that will mean all of these problems will continue to exist.
He forgot about the wonky deflationary economics baked into these coins. Which over time inevitably leads to consolidation and hoarding, and god forbid if anyone actually tried to build a financial system on it would basically be subject to violent deflationary cycles that would wreak havoc on an economy. Which is why the whole economics of the thing is broken by design.
It largely can't even support the scale it's at today, and that's peanuts compared to any form of significant adoption. The gulf between today's usage and the volume he's talking about with "displacing government-issued currency" can't be overstated.
They get so used to throwing around "market cap" numbers that they begin to actually believe there's trillions of dollars of meaningful purchasing power in play.
And, of course, for a cryptocurrency like Bitcoin to replace the dollar, you’d need to convince billions of people to use a currency whose value fluctuates wildly, that isn’t backed by a government and that often can’t be retrieved if it’s stolen.
You also need to replace several hundred trillion in notional assets that are denominated in the dollar. The odds of those being replaced are roughly equivalent to that of a nuclear apocalypse.

What kind of people are investing in crypto? Is it all — to quote a recent “Curb Your Enthusiasm” episode — “nerds and Nazis”?

It’s hard to say who’s investing in crypto, especially since a lot of activity takes place anonymously or under pseudonyms. But some surveys and studies have suggested that crypto is still dominated by affluent white men.
No, it's not. It's undeniable that there's tons of VC money and even the dreaded 'old finance' money in this. That's what matters, not the makeup of the retail investor who has put a few hundred or thousand dollars into it.
Also government agencies, terrorist organisations, drug lords, and rogue states!
Sample of 5,530 American adults, weighted to reflect census composition.
Gemini, a cryptocurrency exchange, estimated in a recent report that women made up only 26 percent of crypto investors. The average crypto owner, the group found, was a 38-year-old man making approximately $111,000 a year.
This is the same Gemini survey as is cited earlier in the article. It's worth noting that the survey selected for people with $40,000 or more in household income, so it's questionable to use it to make claims about the income of the "average crypto owner" when they've preselected the income bracket.
He just mentioned earlier about the youth in the space. I'm sorry but 38 is not the youth.
But crypto ownership does appear to be diversifying. A 2021 Pew Research Center survey found that Asian, Black and Latino adults were more likely to have used crypto than white adults. Crypto adoption is also growing outside the United States, and some studies have suggested that crypto adoption is growing fastest in countries like Vietnam, India and Pakistan.
Sample of 10,371 American adults, weighted to reflect U.S. population demographics.
This has a term: "exit liquidity". And it's not a good look for anyone to be saying about the whole crypto space, that it is exploiting marginalized groups to pay themselves.
Also, what is "crypto usage" in any of these surveys? The ones I see have never explained. "Bought in once after a friend made you curious and never again touched it". That's use. There are likely tons of "crypto users" that bought in out of curiosity, never to bother again.
This study defines it as "have ever invested in, traded or used a cryptocurrency such as Bitcoin or Ether". So, yes, they've definitely included that demographic.

My colleague, Tressie McMillan Cottom, has made the case that crypto — because it relies on permanent, irrefutable records of ownership of digital goods and currencies — is particularly attractive to people from marginalized groups, who may have had their property unjustly taken from them in the past.

“If I live in a community where the police absolutely use eminent domain to claim my private property and I cannot do anything about it,” she wrote, “that sense of everyday powerlessness would make the promise of blockchain sound pretty good.”

She also writes that it is "prime breeding ground for predatory schemes" that has "clear disadvantages for small investors", and quotes Paul Krugman's comparison to the 2008 subprime mortgage crisis

Crypto in zero ways solves this problem. Now the cops say: "turn over your keys or you go to prison" and then people turn over their keys so they don't go to prison.

The evils of eminent domain and civil asset forfeiture are not curtailed by having it on a thumb drive

I fear this is more a reflection on the inequities of our existing system than an observation about the potential of crypto to remedy existing social, cultural, economic and political injustice. A sign of completely understandable desperation rather than a forward-looking agenda. An understandable frustration at current economic conditions, & the tragic lack of global political will to address existing inequities. Alas, I don’t think gambling is a viable alternative—it’s grasping for life preservers in a hostile ocean.

Literally everything from these three preceding paragraphs is an argument in favour of extreme skepticism. Okay, it tells vulnerable people what they want to hear, cool, does it actually deliver!?

You can't just say "oh, wow, I bet this is super useful for these marginalized folks" and then never actually dig into how, why, or if it's actually helping them.

That said, some recent studies have also found that a small number of people own the vast majority of crypto wealth — so it’s not necessarily an egalitarian paradise.
Crypto is worse than a vast majority of unfair jurisdictions across the world.
Agree. "Not necessarily" is weak sauce. In fact, haven't the numbers shown that there is greater wealth inequality in the crypto holdings space than the status quo in the current economic space?

Yes. According to the source Roose links here, 0.01% of Bitcoin wallets collectively own 27% of Bitcoin in circulation; in the U.S. the top 1% of households hold about a third of all wealth.

Depending who you ask, Bitcoin may be slightly worse than North Korea as far as the Gini coefficient, though this depends very much on how you crunch the numbers on both Bitcoin and also countries' Gini coefficients (and at what point in time you look). David S. H. Rosenthal has explored this claim in more detail.

And what about extremists? Are they into crypto?

Some are. Because you can buy and sell cryptocurrency without using your name or having a bank account, crypto in its early days was a natural fit for people who had reasons to avoid the traditional financial system. They included criminals, tax evaders and people buying and selling illicit goods. They also included political dissidents and extremists, some of whom had been kicked off more mainstream payment services like PayPal and Patreon.
It's worth adding that you can do this, but it's much harder to do if you live in the US. This is a big issue—even onboarding legitimate KYC'd customers is onerous, though I suppose not more so than a regular bank.
As a result of their well-timed entry into the crypto market, some extremists have gotten rich. A recent investigation by the Southern Poverty Law Center found that several prominent white supremacists have made hundreds of thousands or millions of dollars by investing in crypto.
Of course, there are millions of crypto owners, the vast majority of whom are not white supremacists. And the same properties of anonymity and censorship-resistance that make crypto useful to white supremacists might also make it attractive to, say, Afghan citizens fleeing the Taliban. So labeling the entire crypto movement an extremist group would be overkill. Regardless, it’s safe to say that crypto has become attractive to all kinds of people who would rather not deal (or can’t legally deal) with a traditional bank.
What a straw man: "if you say anyone who has ever touched crypto is deeply evil, then you may be wrong". I don't think Kevin actually read any of the material he purports to be responding to.

Another criticism I’ve heard is that crypto is bad for the environment. Is that true?

This is a real can of worms — and one of the most frequent objections to crypto.
Because it's true.
OK, yes, so we might destroy the planet and have no ice caps when this is over, but hear me out...

I am going to be empathetic with Kevin here: he is likely writing this as objectively as he can (and veering into both-sidesism) because he knows that if he doesn't write it like this, he will be obliterated in the, or on Twitter.

The problem is that he will regardless of what he writes, because these people do not operate in good faith.

Is the goal really to be as inoffensive as possible to all parties on Twitter? Or to do good journalism?
Let’s start with what we know for sure. It’s true that most crypto activity today takes place on blockchains that require large amounts of energy to store and verify transactions. These networks use a “proof-of-work” consensus mechanism — a process that has been compared to a global guessing game, played by computers all competing to solve cryptographic puzzles in order to add new information to the database and earn a reward in return. Solving these puzzles requires powerful computers, which in turn use lots of energy.
Aren't there numerous proof-of-stake ones too?
There are: Cardano, Avalanche, and Solana are some of the bigger ones. They are a lot less used, though—although Solana boasts a huge number of transactions per day, around 90% of those are just validators voting among themselves rather than doing anything useful. I think it's reasonable for him to say most crypto activity takes place on PoW chains.
Also worth pointing out that a bunch of PoS chains (e.g. Polygon) are sidechains to PoW ones anyway so still require the ridiculous power consumption to continue.
The Bitcoin blockchain, for example, uses an estimated 200 terawatt-hours of energy per year, according to Digiconomist, a website that tracks crypto energy usage. That’s comparable to the annual energy consumption of Thailand. And Bitcoin’s associated carbon emissions have been estimated at roughly 100 megatons per year, which is comparable to the carbon footprint of the Czech Republic.
This ignores the vast environmental and economic impact of computer waste from mining.

Holy moly! How do crypto fans justify that kind of environmental impact?

Crypto advocates often quibble with these statistics. They also argue that:
Are we really going to put up a Coindesk opinion piece by blockchain venture capitalist Nic Carter as the rebuttal here, with no examination of whether it actually legitimately calls the environmental impact stated above into question? Carter literally argues that if you want to accurately calculate the environmental impact of the US dollar you need to factor in the environmental impact of oil drilling and the entire US military, whereas "Bitcoin transactions, by contrast, rely just on bitcoin" (which apparently operates on electricity that just emerges from thin air, and relies on no externalities like, say, the Internet).
• Our existing financial system also uses a lot of energy, between powering millions of bank branches, A.T.M.s that sit idle for most of the day, gold mines and other energy-intensive infrastructure.
This is one server running idle, versus thousands of compute units in mining centers.
A false equivalency, since our existing financial systems do far far far more than any cryptocurrency ecosystem.
Yes, the people making this argument really like to compare the total overall energy usage of traditional finance to the total overall energy usage of their blockchain of choice, conveniently ignoring the massive difference in the number of transactions processed by each. Traditional banking absolutely uses a lot of energy, but total energy usage is not a good comparison.
Traditional banking also has thousands of products it offers to billions of people. Crypto is one facet of a financial system payments ... which it sucks at. Crypto isn't writing mortgages or doing investment banking. So it's really an apples and oranges comparison.
I feel as if it's irresponsible to not include how much energy our existing financial system uses. I realize this is probably difficult to calculate, which is why I'd have it done for this article! It'd be interesting to make a real comparison. Just saying this without a definition of what "a lot of energy" means allows someone to confirm their bias in whatever direction they want to!
• Many crypto-mining computers are already powered by renewable energy sources, or by energy that would otherwise be wasted.
No they aren't. See de Vries papers.
This is true in the "more than 0" sense
How in the world would you prove this?
This sentence is phrased in an intentionally ambiguous way. Such that so long as there's some non-zero amount of renewables then it holds. Which isn't a bold claim if it happens to be like 90% fossil fields. We'll probably never know precisely the ratio.
The Digiconomist report Roose cited above takes a stab at it. Eyeballing the number in August '21 it looks like ~25% renewables (down from ~55% in September '19, oopsie).
• Most newer blockchains are built using consensus mechanisms that require much less energy than proof-of-work. (Ethereum, for example, is scheduled to switch to a new type of consensus mechanism called proof-of-stake sometime in 2022, which could reduce its energy usage by as much as 99.5 percent.)
[citation needed]. But assuming this is true, who cares how most new blockchains are built if everyone's still using the old PoW ones?
Can basically regard Bitcoin and Ethereum as being the entire market if we just look at volume. It's like Coke and Pepsi in the cola market, there are a few others but they don't sum up to much relatively. And both are gas guzzling PoW disasters.
The fabled Ethereum switch to PoS has been "about six months away" for several years now.
Not only vaporware, but proof of stake means you buy influence and dominance, which is counter to the entire "DeFi" ethos of distributed, decentralized and democratized finance in the first place. Coupled with the "off-chain" stuff to make things scalable, and not much of the original benefit of crypto is left, as Molly White has pointed out well in podcasts recently.

And are those arguments valid?

Partly. It’s true that most newer blockchains are designed in a way that requires considerably less energy than Bitcoin, and that Ethereum’s switch to a proof-of-stake consensus mechanism will greatly shrink its environmental footprint, if and when it happens.
"If and when" suggests that Roose knows at least to some extent how shaky those claims that Ethereum will be moving to PoS any day now really are, so why does he state it as though it's a sure thing above?
But it’s also a bit convenient to steer attention away from Bitcoin, which is still the most valuable cryptocurrency in the world. Bitcoin’s energy needs aren’t expected to fall significantly anytime soon. And even if every Bitcoin miner ran entirely on renewable energy — which, to be clear, isn’t the case — there would still be an environmental cost associated with maintaining the blockchain.
Or... ever. Because it's literally designed this way. The entire design of the system is predicated on it becoming harder and harder to do the computation required to mine new Bitcoins, thus requiring more and more energy expenditure over time.
Yeah, this is so disingenuous.
All told, it’s clear that crypto as we know it today has a significant environmental impact, but it’s hard to measure exactly how significant. Many frequently cited statistics come from industry groups, and it’s hard to find trustworthy, independent data and analysis.
"Exactly", perhaps, but the Times themselves seem pretty confident in other articles, which they've titled things like "Bitcoin Uses More Electricity Than Many Countries".
But few crypto fans would dispute that blockchains consume substantially more energy than a traditional, centralized database would — just as 100 refrigerators use more energy than one refrigerator. They just argue that crypto’s environmental impact will shrink over time, and that the benefits of decentralization are worth the costs.
Normative claim with no backing. How will this happen???
+1 - WTF
"Well the crypto fans have said so, so I guess we should just publish it with no analysis!"

Got it. And those benefits, again, are …

Some crypto proponents will tell you that the biggest benefit of decentralization is the ability to create currencies, apps and virtual economies that are resistant to censorship and top-down control. (Imagine a version of Facebook, they’ll say, in which Mark Zuckerberg couldn’t unilaterally decide to kick people off.)
He mentioned earlier about how this version of Facebook was bad and we did not take it seriously. Now it's being written about as a positive (because it is now from the perspective of a crypto advocate.)
This is called moderation. It's a feature, not a bug.
He should also mention that previous attempts to create this product, like Twetch and Bitclout, inevitably ended up moderating.
Others will say that the biggest perk of decentralization is that it allows artists and creators to control their own economic destinies more directly by giving them a way (in the form of NFTs and other crypto assets) to bypass platform gatekeepers like YouTube and Spotify, and sell unique digital works directly to their fans.
Nothing says giving artists control over their economic destinies like creating a system where art theft is rampant and painfully difficult for artists to combat. How is he not touching on the art theft and exploitation of creators at all??

While this is far from the most dangerous part of Kevin’s formulation of the “truth of crypto,” it is the one that strikes closest to home for me personally. Decentralization as a theoretical tool for empowering artists has been a feature of the advocacy landscape since the arrival of Napster in 1999. It has proven to be both illusory and wildly exploitative. The tools for decentralization—for bypassing gatekeepers, have existed for more than two decades. There is nothing new about crypto to aid in this putative empowerment. The problem that artists confront is that the asset which they create/own has virtually no value given decades of a dominant idea, peddled by many of the same advocates for web3/crypto, that “information wants to be free.” But capacity to individually create and distribute is not synonymous with empowerment when it fails to produce revenue that sustains creators. And don’t get me started on NFTs. NFTs solve none of these problems. Basically, they’re like telling artists—your music isn’t worth anything, but perhaps you can monetize this unique digital collectible. The NFT is a gimmick, not an asset.

Now it’s all fine and good for Kevin to say that “some proponents will say” that decentralization will empower artists. That’s a true statement. Some people will say that Trump was the greatest president in US history. That is also a true statement of the views of “some people.” But it is beyond irresponsible to fail to interrogate this claim, and the lessons of history in demonstrating its failures.

Replacing them with gatekeepers like Opensea, Coinbase, etc.

It is and always has been possible to do this since the internet started. Artists take commissions and exchange digital assets all the time. Artists design tattoos, musicians create soundtracks, 3D modelers build assets, etc. There is absolutely nothing stopping an artist from setting up a website where they charge $250 to draw a custom picture of a rabbit or whatever.

Artists (to a certain extent) want those "gatekeepers" because they are platforms that bring in an audience or automate some complicated task like inventory management or product hosting. But if you really want to cut out the middleman, it's more than possible. For example, MST3K just announced their own streaming platform just to host their newest season.

How is this not selling "directly to fans"?

Still others will say that crypto is most useful to people who don’t live in countries with stable currencies, or to dissident groups living under authoritarian regimes.
Claim, but not demonstrate.
They need stable banking access. Not pyramid schemes. Crypto doesn't solve their underlying problem.
Ah yes, crypto, the notoriously stable "store of value".

It is true that one of the common use cases of cryptocurrency is in those places where one has a corrupt government and a broken economic system.

But you don't build a global system for the outliers, you do it for the masses.

There are a million other hypothetical benefits of decentralization and crypto, some of which are realistic and some of which probably aren’t.
There are a lot of words here for a sentence that says absolutely nothing.
Sigh, this would not be the first time that NYT has exhibited sloppy editing of tech stories where both novices and experts are confused by the words of the tech writer. It takes a particular talent to do so.

Oh really? A million?

This guy wrote for a major newspaper???

How do you actually use crypto? Is it like sending a payment over Paypal or Venmo?

It can be. The quickest way to get started using cryptocurrencies is to set up an account with a crypto exchange like Coinbase, which can link to your bank account and convert your U.S. dollars (or other government-issued currency) into cryptocurrency.
The "user friendly" suggestion of Coinbase here directly contradicts the "anonymous" and "decentralized" arguments up above.
Really cutting out all the pesky middlemen, huh?

But many crypto users prefer setting up their own “wallets” — secure places to store the cryptographic keys that unlock their digital assets.

Badly juxtaposed, implies the previous step is somehow excised. Unless you get your crypto from Just Some Dude You Know you're probably still going to interact with an exchange even if you don't leave the coins in their stewardship.

Once you’ve got some crypto in your wallet, the process can be pretty simple — just type in the recipient’s crypto wallet address, pay a transaction fee (if applicable), and wait for the payment to clear.

Where? Into my computer? In a notepad? On my hand? A Facebook post? Do I hire a skywriter? You're writing this for a hypothetical reader who knows little to nothing, they're going to have no idea what the hell this interaction actually means.
This is a weird thing to say, given the whole piece has pretty much been about Bitcoin and Ethereum, both of which have transaction fees. It's not at all like PayPal or Venmo in this sense, because it doesn't cost you $15 to send someone $10 on Venmo.
It also usually doesn't take hours for payments to clear on Venmo, or require you to pay a premium to speed them up.
Other types of crypto transactions, like buying and selling NFTs, can be significantly more complicated, but the basic act of sending a payment to someone typically takes only a few minutes.

One of the best traits of a good tech reporter is someone who is able to evaluate something in terms of a regular person and translate a complex topic into simple terms. Kevin is actually good at this — he really is — and I'm disappointed that this is not on its own a huge deal.

It takes literally seconds from me grabbing my phone from my pocket to send $5 on Square Cash, with maybe 3 actual "buttons" (and bits can be done via Face ID) — that is the speed of the actual work I have to do, and the transaction, again, takes seconds.

In the case of a crypto transaction, it's incredibly important to add that "sending money" can mean a lot of things, and that you are "sending" it and have to pay to send it, and then once it's sent, it has to be recorded and depending on how they received it may take more confirmations before you can actually receive the money.

The comparison here is different because the experience of using money is different. When I receive $5 from Square Cash, I can get that in my bank in a second using the same refund mechanism that Coinbase uses. If someone sends me $5 of Eth on Coinbase, I need to wait for confirmations.

It's just so much more wonky than he's making it seem.

I’m ready to dive into the rest of your explainers. But first, I have one final question about crypto’s culture: Why is it so weird and insular?

This is maybe the question I get asked most about crypto. People see their friends, co-workers and relatives diving down the crypto rabbit hole and emerging days or weeks later with a new obsession, new internet friends, a bunch of new jargon and the seeming inability to talk about anything else. (There’s even a word for this — getting “cryptopilled.”) People who believe in crypto tend to really believe in it — to the point that they can appear to the outside world more like evangelists for a new religion than fans of a new technology.
Red flag 🚩🚩🚩
One would expect the opposite attitude from rational investors...
So... like a cult?
I was a religion reporter once, and I don’t think the comparison is totally inapt. (It’s also not necessarily a bad thing: Plenty of people find meaning and community and intellectual stimulation in religion.) As people like the Bloomberg journalist Joe Weisenthal have pointed out, crypto has similar elements to an emerging religion: an enigmatic founder (the still-anonymous Satoshi Nakamoto), sacred texts (the Bitcoin white paper) and rituals and rites to mark yourself as a believer, such as tweeting “gm” (crypto speak for “good morning”) to your fellow believers, or photoshopping laser eyes onto your profile picture.
Plenty of people find meaning and community and intellectual stimulation in cults too, I'm sure.
Religion is a system of epistemology. Providing meaning and community is the thing it exists to do. I do not, and should not, expect the same from my bank. If my bank had a fan club, if the Canadian dollar as a concept had a big meetup where everyone was like "woo, the loonie!" and we got musical guests to sing songs about RBC and Scotiabank, that would be insane.
This would also describe many cults.
It’s fun to laugh at the (often cringeworthy) ways crypto fans try to entertain and inspire each other. But focusing too much on their behavior and customs might mean missing what’s genuinely novel — and, depending on where you sit, either exciting or dangerous — about the technology itself. Which is why, when my friends ask me how to talk to their cryptopilled relatives, I advise them to start by trying to understand what’s gotten them so excited in the first place.


  • Matt Binder – a reporter and researcher who hosts the crypto-critical podcast Scam Economy
  • Grady Booch – a computer scientist and software architect about whom you can DYOR
  • Amy Castor – an independent journalist and researcher who writes a crypto-focused blog
  • Stephen Diehl – a software engineer and the author of several essays on crypto-related topics
  • Dirty Bubble Media – the mind behind the publication Dirty Bubble Media
  • Dr. Catherine Flick – a senior researcher in the ethics of emerging technologies at the Centre for Computing and Social Responsibility, De Montfort University, UK
  • David Gerard – an analyst and author of two books about blockchains and related topics, as well as numerous blog posts on the same
  • Geoffrey Huntley – a developer advocate and software engineer who is also behind The NFT Bay. He publishes more of his writing on his website.
  • Bennett Tomlin – an independent cryptocurrency researcher and host of the Crypto Critics' Corner podcast
  • Neil Turkewitz – a consultant and copyright activist, who is President at Turkewitz Consulting Group and a member of the Artist Rights Alliance. He was previously an executive at the Recording Industry Association of America (RIAA) and served on the Board of the Chamber of Commerce's Global Intellectual Property Center. More of his writing can be found on Medium.
  • Molly White – a software engineer and the creator of Web3 Is Going Just Great, who has also written some essays about crypto-related topics
  • Ed Zitron – an author, journalist, and media relations company CEO, who also writes on Substack
  • ...and several contributors who would prefer to remain anonymous.

Three of the contributors have also published their longer-form thoughts on this New York Times article: Ed Zitron, Neil Turkewitz, and Stephen Diehl.

Copyright to the New York Times article belongs to the Times, and the article can be read in its original form in full at It is republished here for the purposes of criticalary. Copyright of the annotations belongs to their respective authors, as noted inline. Those without authors noted inline are combinedaries from several annotators.

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