OPINION: Cryptocurrency, the fabled meritocracy, and “order despite chaos”

The reader’s basic familiarity with Bitcoin is assumed by the writer. For technical introductions to bitcoin, see bitcoin.org

The Dark Side

Hardcore capitalists from the “old guard”, who are venturing into technology projects for the first time, assume that Bitcoin is simply money, and would argue that success in tech projects is as “simple” as their non-technical projects from the past, making solid smart trades that go with the trends (smart money). These people are coming from the relatively slow-moving verticals, for example: commodity trading (gold/silver/oil), electronics manufacturing (I’m looking at you, miners) and online casinos (many of whom still use the same core software they used 10+ years ago). The approach of these companies has been somewhat unsuccessful, because users of bitcoin are from a younger demographic, and because bitcoin is perhaps the exact wrong place to start for a non tech-savvy company. The cryptocurrency ecosystem market cap, at the time of this writing, is less than 15 Billion dollars, and this is a tiny market, compared to many others. By the time bitcoin adoption reaches a point that would support profits on the scale that these “pure capitalists” expect, the market and the technology will have left them far behind. These folks are actually not making any money on their technical projects, BUT since they already have money, they are invested with cash in the markets. They are watching the market price go up with delight, taking profits, and either slowly learning how to perform like a “high tech VC” or sticking to what they know.

Meanwhile, large conglomerates, who are likely afraid of bitcoin, are doing what they can to inject themselves into the digital economy by creating a bridge between FIAT money and Bitcoin. These organizations are no doubt becoming RICHER and thereby shoring up their fragile and outdated banking systems by investing in cryptocurrency themselves, manipulating the markets to bankrupt small-time investors, and taking advantage of the ‘lawlessness’ of the cryptocurrency ecosystem to avoid paying full price to the workers and open source developers who make all of it possible.

Organized crime goes a step further and participates in widespread fraud and corruption, hence all the casinos and affiliate programs that don’t actually pay out as advertised. These organizations are powerful enough to close the digital gap and often revert to medieval tactics such as extortion and theft when things don’t go quite as they planned. Those who are caught in the web of these organizations often find themselves unable to finger their oppressors as it would implicate them in a crime as well or endanger their families’ financial or even physical security; Let’s face it, Bitcoin is tailor made for terrorists of all kinds. In the end, these people are just doing what they would do anyway, plus taking advantage of the lack of accountability inherent in an open decentralized system, just like the big-time conglomerates and old guard investors.

The Jedi

Tech companies and tech VC firms are going for ‘quick wins’, meeting consumer demands that they know will likely fade as quickly as the next trending pop artist. They believe in do one thing and do it well. They’re agile, not afraid to take risks, paying their contractors well, and making big profits, without oppression, extortion, et al. The weakness of some of these companies is their unwillingness to accept that people are not just “consumers”; they can be much more. This results in a perpetuation of those fast-fading trend products and a lack of real substance in many cases.

Programmers and developers can finally be appreciated as independent artists in the crypto economy, either individually or as small teams. Standalone games, simple financial services, market analysis tools, altcoin bounties, and full-on blockchain projects produce revenue from advertisements, high-yield investment strategies, and service fees. With the huge number of new businesses being turned up by small-time investors and indie developers, bloggers, marketers and designers are also enjoying the incredible growth of the crypto market. The main weakness of these groups is inexperience and sloppiness. A single security flaw can result in the loss of all their funds, and since most of these are run on angel investment, there’s little hope for continued success. Emotions can often cloud the judgment of small shops whose livelihood may depend on the success of their project.

Hackers are eager to offer their illegal “warez”, “fullz”, “CCVz” and the like (for better or worse) on the deep web, which rewards their efforts with more traffic, notoriety, and untraceable profits. Other, more sinister “indie criminals” are also enjoying a boost: prostitutes and ‘e-whores’, credit card fraudsters AKA ‘carders’, and even ‘script kiddies’ who employ known exploits or attack various systems that are built by unwitting investors trying to attack the market without testing their software. The bad news is that this can never help the average person in any way.

Fraud in Crypto

The cryptocurrency market has been plagued with scandals, thefts, scams et al. since its inception in 2009. If one needs proof of the rampant fraud trend in cryptocurrency, a visit to badbitcoin.org quickly sums up the problem: there are thousands of ‘bad’ sites and only a handful of less than 50 ‘safe sites’ listed. Sites like cointrust.xyz attempt to track the reputation individuals by their online handles and other personally identifiable information.

The reality, as any astute observer can deduce, is that fraud is nothing new, and there is really not anymore fraud in the crypto economy than there is in the real economy; The digital nature of cryptocurrency, as well as the overall increase in connectivity and communication in recent years, simply allows incidents to come to light faster and more often. Yet hundreds fall prey to schemes new and old each month. The decentralized, open source, free nature of the ecosystem encourages the ‘wild west’ sentiment that has become the prevailing attitude in the crypto-fraud community. Is it wrong? Perhaps. Is it good for business? Absolutely. Customer loyalty in the crypto space seems to be much higher, even in industries where historically there is none. Once customers find something that works once they are willing to use it again and again, because going anywhere else could mean getting defrauded. This fact has helped the REAL crypto economy sustain controlled growth, even as trading markets exhibit Jekyll & Hyde personalities and white collar crime goes unchecked. Therefore, the crypto economy owes its success in part to these white-collar criminals.

Wealth redistribution, one dollar at a time

Every tech-savvy individual can benefit from the crypto market’s explosive growth. Young people in third-world countries who have studied basic English can now earn the $1 per day they previously struggled to earn, all from the comfort of an internet cafe. With some study, discipline and luck, the $1 can grow, and though it may not seem like a lot, one dollar can make a difference in the lives of these individuals, and they are getting the money from people in wealthy countries. Once they’ve earned 15 dollars, it costs only about 2 dollars to cash in their earnings and enjoy wages with just basic computer skills. This is really an interesting concept that does not get a lot of attention. Unfortunately, the availability of computers and etc… in these nations means that there’s very little impact on the 6+ Billion poor people in the world.

The cynic’s bottom line

The crypto economy is still subject to basic human psychology, which is in fact what causes the rich to get richer and the poor to get poorer day after day, year after year. Bitcoin was at one time heralded by some of its more colorful supporters as the end of the “systematic subjugation of humanity by investment bankers” and yet after 7 years we find that if anything, Bitcoin enables the same groups to exercise even more control.

We as a collective are also realizing that it’s actually a bad thing for human beings to become even more dependent on electricity and digital communications which, if removed for even a short period of time, would already cause a complete collapse of economic and social systems on this planet. Cash is a physical asset, and without it, we are doomed to chaos if digital communications are temporarily suspended. In the end, as the saying goes… “one cannot eat money”, and this is even more true in the crypto paradigm.

Therefore, the crypto economy is currently simply a continuation of the same unsustainable systems which have always governed human progress, albeit with a digital twist which accelerates the entropic trend we have seen in society since we started measuring progress.

It’s not all doom and gloom; There’s hope

In a properly shaped society, cryptographic currency has a meaningful place and in a sense makes room for the world’s economy to equalize the gap between the rich and poor, minimize reliance on third parties for financial transactions, increase privacy and security of funds, and decrease fraud between trusted parties. Socially responsible concepts in solar power, research, voting, contracts, and many other areas seem poised to use Bitcoin’s distributed computing model as an evolutionary catalyst.

Though most of us can agree that there is something fundamentally wrong with the way that humanity has progressed, we each owe it to ourselves and our planet to look within, and start changing our own perceptions, which will, eventually, change our reality.

Chaos reigns supreme, and the transparent nature of the crypto economy shows us that now more than ever. The challenge has always been to build “order during and despite chaos”, and this rings with just as much truth as the old mantra “ordo ab chao” or “order out of chaos”, perhaps even more.

Cryptocurrency and the fabled meritocracy

In the iconic Atlas Shrugged people are faced with the harsh reality that the status quo which seems so illogical is being perpetuated by powerful individuals who, like so many people, are simply afraid of change and the unknown. The other truth that the Ayn Rand classic so clearly illustrates is that fear of the unknown, when combined with low intelligence and undue powers of influence, is a recipe for disaster. Innovation that could change the world for the better is stifled or completely consumed by people who do not want it simply because it would inconvenience them.

Like some of the technology in Atlas Shrugged, cryptocurrency represents PART of an opportunity to “disappear” from the traditional system and begin anew. Banks may be necessary for now because they are inexorably linked to every part of our current social system, but with cryptocurrency, we can remove banks from at least part of our social equation. The “crypto” in cryptocurrency stands for “cryptography” which gives birth to “encryption”. According to all research, and contrary to some conspiracy theorists, encryption is real and it works. That means cryptocurrency offers us privacy, and not just from the banks and governments, but from ALL unknown persons; Most of us have nothing to hide from the government or banks, but certainly we have something to hide from the people who would hack the government or bank’s database and access our private information. Why rely on these institutions when they have shown us time and time again that they are not responsible or intelligent enough to be trusted with our most private data?

In the crypto economy, saving is rewarded automatically via deflationary currency value. That means the longer money is not spent, the more it will be worth, by default. In contrast, those who are sloppy will lose their cryptocurrency to various pitfalls; Stupidity, ignorance, and apathy are not rewarded. In theory this is much more ideal than traditional banks. Sloppiness can often be undone (chargebacks on credit cards for example) and one can simply ignore their money saying that it is “in the bank” so “it must be safe”; meanwhile the money is usually not gaining any meaningful interest or being put to good use, and banks charge fees which can drain the account and penalizes those with little or no money.

With all this in mind, it might occur to the reader that the crypto economy is a meritocracy, where the most clever and determined are able to truly benefit from their efforts, with no banks or governments to stand in their way. Sadly this is not true, nor will it ever be, and meritocracy remains just as much of a fairy tale as utopian society. The crypto economy shares more qualities with the “wild west” frontier of the United States in the 1800s than it does with a meritocracy.

The enlightened minds

Those who are able to understand cryptocurrency on a basic level and understand its value independent of subjective or circumstantial opinions (EG: “I tried buying some BTC and then the value went down so it’s useless”, “It’s too hard to exchange into cash so it’s useless”, “Drug dealers use it”) are typically going to exhibit the characteristics one would expect from an Atlas Shrugged character who disappeared from society. They are fed up with the current system, have ideas to make things better and have been told ‘no’ by people who aren’t in a position to make sound judgment on their ideas too many times. They’re peaceful, intelligent, and compassionate human beings. These are the type of people who, collectively, are changing the world as we know it, not by disappearing to a secret city, but from the inside out, and creating a digital oasis where like-minded individuals can contribute to the greater good of humanity.

Conclusion

This section was written in hope that the explanation will help the reader to understand the overriding trends therein from the writer’s perspective. It is a subjective opinion and not necessarily true.