Like it or not, cryptocurrency is here to stay – The Spectator
Public Affairs, pp. 496, £25
There was a time when you could read a book to keep up to date about a subject. Well, that’s over. If a week is a long time in politics, in crypto it’s like a geological period. By the time a book on crypto hits the shelves it needs to be in the ancient history section.
The Cryptopians is an attempt to sum up ‘the first big cryptocurrency craze’ by Laura Shin, a financial journalist who writes for Forbes and who has a successful crypto podcast. Its scope is the first decade of crypto, from the creation of Bitcoin to the current frenzy of DeFi (Decentralised Finance) and NFTs. But the core of the book is the story of Ethereum and its coin ether, the number two crypto in terms of market cap, and arguably more important than Bitcoin because of its smart contract functionality that has sired DeFi and jpegs of rocks selling for millions. The standard line in crypto propaganda is that Bitcoin is digital gold whereas Ethereum is digital oil.
Vitalik Buterin, the Russian-Canadian wunderkind behind Ethereum, gets an intensive bio, and Shin also focuses on the infamous 2016 hack of Ethereum’s DAO (Decentralised Autonomous Organisation) that resulted in some £50 million of ether being stolen (worth billions at today’s price), so The Cryptopians has a whodunnit thread running through it.
Shin covers much of the same ground as Matthew Leising’s Out of the Ether, published last year. Her conclusion about the DAO culprit (not named in the book but revealed in a subsequent Forbes article) is different to Leising’s – as is her style. So many lazy, hasty cash-in works are produced by journalists that I salute Shin for her thoroughness. But that’s also the short-coming here. Everything is so relentlessly referenced and corroborated that the result feels more like a geeky archive than an entertainment, and the general reader hoping for a clear introduction to the subject may get bogged down early on.
Shin does have some amusing, behind-the-scenes insights: that for all the utopian, messianic, power-to-the-people rhetoric about the good that crypto can do (and that hallelujah chorus still echoes around), crypto is finally people. And Jean-Paul Sartre’s observation on hell holds true. Buterin’s generation is the first of the laptop nomads, individuals who can work anywhere there is a reliable internet. Ethereum was built by dozens of devs working in different continents, though they might just as well have been crammed into tiny cubicles on an industrial estate in Slough, as the squabbling and back-stabbing was the same. But page after page about petty bickering eventually becomes tiresome.
It’s no surprise to learn that Charles Hoskinson, one of the founders of Ethereum and the force behind ‘Ethereum-killer’ Cardano (another top ten crypto) is an arsehole. Anyone who’s watched one of his countless YouTube videos would have guessed that, but it’s nice to have the evidence meticulously laid out by Shin, so that if you’re challenged on that opinion you can quote chapter and verse.
Since their inception Bitcoin, Ethereum and their epigoni have been dismissed as a scam, a ponzi, a bubble, a fad, tulips. But however you regard them – as an asset, a commodity, a currency, a store of value, a bank, a security or a hybrid of these things – they’re now here to stay. Ask a banker.
The sales talk is exaggerated of course. DeFi is not truly decentralised: ‘less centralised’ or ‘hard to spot the centre’ would be a more accurate description. The ‘avant-garde’ of DeFi is creating options so weird and complicated that it’s like particle physics (certainly beyond my understanding) and much of it will probably end in tears. It’s a pity Tom Wolfe isn’t around to chronicle all this. He’d have relished it and served up something spectacular.
The popular crypto slogan of ‘be your own bank’ is not a burden everyone wants to take up. While crypto can’t be a panacea or cornucopia, it does offer a more egalitarian access to financial services (as long as you have an internet connection). If your dodgy government or state collapses, you can just walk out with your capital in your pocket. Indeed if you’re confident enough, you can keep the details of your account in your memory.
Shin ends her book looking forward to the ‘second big cryptocurrency craze’. It’s a neat line to close with, but I suspect she’s too savvy to regard what’s going on today as a craze. We’re beyond that. Whether it’s gaming, sport, art or finance, crypto has already staked its territory. CoinMarketCap now lists more than 18,000 cryptos. Almost all will be gone or dormant in a few years, but the world has changed. The new billionaires wear hoodies (and not even designer ones).