Yesterday I had a quasi-viral tweet about how I cannot for the life of me find an explanation as to why Web3 and the blockchain are so inevitably the future. Charlie Warzel, ever the optimist for no given reason suggested the following:
Instead of a technology achieving mass adoption and creating a culture in its wake, much of the crypto movement is a durable culture that is waiting for its mass-adoption product and trying to spin up technologies that augment the culture.
Now, I realize that one can make a compelling and true argument that the wealth generated by and the popularity of bitcoin and Ethereum can be classified as mass adoption** of a technology (blockchains) and that the culture surrounding crypto is proof of the cycle behaving normally. But once again, the language coming from Web3 boosters suggests that the digital currencies are just the building blocks for something even more revolutionary that will upend our lives and economies. Here’s where I see Web3 as a culture in search of its killer technological application.
Without focusing too much on my petty grievances, I am sick and tired of so many people giving Web3 the benefit of the doubt. Charlie’s meandering point is that the culture is established - and that said culture is “durable” - and, I think, that because the Web3 zealots are suggesting that "something even more revolutionary” is coming that we now have proof of said culture’s durability? It’s an extremely confusingly-worded paragraph that eventually concludes that culture moves too fast to be captured by the media, and thus we may not realize the future is here until it arrives.
The existence of a culture does not prove that the culture is durable or important. And I believe that an alarming amount of people in the media are actively trying to make Web3 a thing - they want it to exist and want it to succeed so much that they are willing to throw caution to the wind and write about it as if it’s 2013 and every new startup is a beautiful angel.
Paris Marx made a very good point on this subject:
Without knowing what Marx is talking about, this is a compelling accusation to make of the New York Times’ Kevin Roose, who wrote a childlike piece about a project called “Pudgy Penguins” where he was given an NFT (which he gave back) as some sort of vague investigation into what NFTs are, which ended up being “a collection of images and a Discord server.” This naturally pumped the price, which has now tumbled down to roughly a third of what it was a few days after the Times’ article. When I wrote about this before, I mostly focused on how the rich get richer, and that once something bubbles to mass media, the con men have already got several stages in and almost everybody entering the system is a mark.
I am not suggesting that Roose is malevolent, but that he is acting (as the media tends to be on the subject of crypto) with a complete lack of responsibility to his readership. Casey Newton - Roose’s new podcast-mate - said that he “tries to approach web3 stuff with open-minded skepticism” because “so much of the energy and talent and money in tech right now is racing toward crypto,” a deeply worrying statement that reflects the ridiculousness of the situation without acknowledging that yes, many billions of dollars and many people can all lie to themselves at scale.
The problem is that Web3 and crypto are unprecedented, but not in a qualitative sense. Cryptocurrency has rapidly accelerated to absorb venture capital and talent in the same way that buzzy industries tend to, as tech talent tries to search for the next big thing that can give them a giant equity payout (as they should!). Previously, this has usually been justified by some degree of substance - for example, even in the most loathsome depths of the gig economy rush, it was still relatively obvious that you would want to order something to your door from your phone. In the case of crypto, there is a giant, gaping hole where substance should be, filled with Osteen-level zealotry and the vague promise that the future is going to use this stuff.
This is a remarkable challenge to journalism because you cannot - and should not - write about many of these products as if people are acting in good faith. Instead of analyzing why a trillion-or-so currency exchange that also connects to a decentralized network of the slowest and most expensive computers known to man, they’re trying to find ways to squint hard enough to see any good in it. If you argue that a journalist should have an open mind, you are wrong - a journalist should investigate and validate the claims they are making and frame their questions as such.
That’s why when Casey made the following tweet, I spit poison and melted my monitor in two:
This, to me, is one of the more grim ways that one can discuss tech in general. Evaluating something as bad because the evidence in front of you is that it’s bad is a fair thing to do. In the case of cryptocurrency, there is a wealth of evidence of constant acts of exploitation and criminality, along with an almost complete lack of any meaningful progress. What have NFTs, cryptocurrencies and Web3 done better than anything else out there? What new discoveries have they made that have improved their lives?
The answer is that they haven’t. Any meaningful improvement they have made to people’s lives is the ability to generate income, and even then these stories are rare compared to the endless deluge of rug pulls or scams. The cryptocurrency industry has proven only that there is a hunger for the chance to generate wealth, masked by a parade of multi-billionaires trumpeting wonky concepts as the future of society. They are getting such adoption because we do not live in anything resembling a meritocratic society, and becoming one of the elite is (and never has been) a question of hard work. People want the shortcut to wealth that crypto vaguely promises and are prepared to lie to protect that dream.
The crypto industry has become a conveyer belt of extremely-poorly realized dreams where the entire product is a financial instrument. The promise of a decentralized, autonomous organization sounds lovely until you see it in practice - because any system in which votes are transactable is not democratic and also suffers the same problems as actual democracy (the ability to manipulate people into doing things against their interests based on half-truths or outright lies). And if you’re going to tell me that a DAO could work “if it were perfect,” then I am now a bodybuilder the likes of which would dwarf John Cena, I just need to work out constantly, eat completely differently, and also have a totally different body.
The thing that deeply worries me - and many others! - is that the tech press appears to be falling for the same thing they did with Uber and the gig economy:
Edward - one of my favourite labor journalists - makes a very salient point, and cites a powerful and depressing essay by Sam Harnett at KQED - Words Matter: How Tech Media Helped Write Gig Companies into Existence.
The piece in question is essential reading, and I want to call out one specific part:
Whenever news breaks there is a critical time frame where terms are established to describe what is happening. This language develops into a sticky shorthand that is repeated again and again. In the process the terms become so normalized it’s difficult to detect the subtext and assumptions packed into them. They start to seem neutral and natural. Eventually both reporters and the public no longer think about what it means to call pay increases “wage hikes,” mass murderers “shooters,” or Ann Coulter a “provocateur.” This kind of charged shorthand is rampant in the world of tech journalism, which traffics in new companies and services.
When I started covering companies like Uber, I found myself increasingly encountering these problematic terms. These included Silicon Valley-speak like “pivot,” 4 “friction,” “innovate,” “disrupt,” “platform,” and “startup,” but also big, baggy words like “freedom” and “efficiency.” Companies like Uber and Lyft got their own section on my list with terms like “transportation network company,” “gig,” “rideshare,” “sharing economy,” and “collaborative consumption.
The presence of these words subtly change the way readers and listeners think about the companies in question. Being deemed a “tech” company is a massive brand boost. “Tech” corporations have traditionally had high consumer favorability ratings and have not been scrutinized like firms in other industries.
Harnett’s piece accurately describes how the tech media took a narrative that these companies wanted - that they were not exploiting workers but giving them flexibility and industry to “be their own boss.” The linguistic tricks, as Harnett puts them, “subtly change the way readers and listeners think about the companies in question,” and being labeled a tech company actively reduces a company’s scrutiny. The language of calling Uber, Lyft and other human labor app companies as “platforms” steeping them in the language of innovation and “moving fast and breaking things.” Uber and their ilk have always acted in this way, but the media chose to describe them in the terms of an app, rather than companies that got the benefits of hiring without having to actually hire anyone.
Ongweso Jr. and others have correctly suggested that the same thing is happening today. Roose’s own piece in the Times on romance scams using cryptocurrency manages to detail the various ways in which cryptocurrency is perfect for scams, and yet fails to reconcile with how common they are and how there’s a trillion-dollar asset market built on top of it. The Wall Street Journal’s Christopher Mims may be one of the few major media people to get it right - yet Paul Vigna of the Journal’s “what is cryptocurrency?” piece spends a little time on the incredible dangers associated with using them. Time Magazine, allegedly a respectable publication, is now in the business of posting “expert predictions” for crypto markets. The BBC had to pull a TV show at the last minute because the fawning documentary they’d made about a “self-made crypto millionaire” was really about an actual criminal, mere months after they’d helped pump a scammy token around the show squid game.
As I’ve said, the unique challenge here is that there is lots of money and activity in something that is quite clearly bad. The alarming conflation too many members of the media are making is that so many people couldn’t possibly be wrong, and thus there is validity to be found if they just believe enough.
The reason I am such an alarmist is that by that same logic, millions of people could be (and have been) harmed by cryptocurrency when it crashes. These are markets that are magnitudes more volatile than the stock market, and even more illogical - a cryptocurrency does not have to be “good” to be worth something, it simply has to have some level of viral appeal mixed with the right market manipulators buying into it. Anyone being invited into cryptocurrency is by definition a victim, because the forces that control the underlying assets of cryptocurrencies are little-understood and exceedingly powerful.
That alone should be enough to approach every crypto project with multiple layers of suspicion. It’s also enough to justify approaching the entire industry with cynicism - this is a “prove me wrong” situation, not one where reporters that influence millions of people (and investors) should be letting their guard down.
What’s worse is that unlike Uber, these aren’t particularly useful. I cannot think of a single crypto project that’s essential, or life-changing (other than buying and selling it and making money, which is rare), or really definitional of anything. The evil of pushing uncritical narratives about Uber was that it created a subclass of indentured contract workers - and, frankly, I imagine these narratives were pushed because it was easier to accept the exploitation because it improved people’s lives.
What do we gain by humoring crypto, other than the arbitrary increase in some random people’s pocketbooks? I understand being curious about new things - that’s the nature of tech reporting - but this is a carousel of concepts that add little to society other than absorbing resources and potentially harming people.
It feels so deeply Republican, too. Desperate, sad people are being sold a dream that works against their better interests by being told to fear a particular group (the “elite” that are “not going to make it”). Those who do not “believe” are told that they simply don’t get it, making them self-conscious and defensive. They then step up and attempt to give a good faith read of a situation posed by someone acting in bad faith, as absolutely nothing short of full evangelism will suffice.
The net result is people acting in good faith to prop up the ideas of those acting in bad faith, so that they do not have the appearance of bias. And just like right-wing media tactics, crypto zealots do not care about what you think, only that you spread more of their vile, regressive rhetoric to “protect freedom.” And when you attempt to show them that you’re trying, they will always tell you you’re not trying hard enough.
However, I am not actually saying that we should stop discussing cryptocurrency.
Something is happening here. We are seeing probably the largest libertarian experiment of all time, along with the largest financial technology boom in history. Please note that “large” does not mean “good” and “financial technology” does not mean “useful” - I just mean that we are seeing thousands of different fintech products being created out of seemingly nowhere, but they’re being marketed as functional pieces of technology that do something other than the generation and manipulation of speculative assets. And what the venture sect has realized is that this creates numerous new ways in which a customer can be monetized - in almost every action they take in the case of cryptocurrency - and then sold to the consumer as a form of freedom.
Oh, and if you’re wondering whether this many people can be stupid? Please remember the subprime mortgage crisis. Rich people are fully capable of being manipulative and exploitative, and many consumers can be extremely irresponsible if they believe they are able to increase their wealth, especially if said wealth increase appears to be easier or quicker than doing it the normal way.
It is truly astounding to me how few lessons were learned from that crisis. And yes, there were examples of major media outlets uncritically publishing information about subprime loans.
What needs to happen is a readjustment of how we evaluate cryptocurrency, Web3 and NFTs. While development may be happening on these platforms and things may be being created, until someone is actually able to show you a functional piece of software that is better than what’s out there there is no reason to act as if it will happen. Reporters are being goaded and guilted into defending themselves by “being open-minded” about a rotten industry, and I’d wager it’s because they are either afraid of being wrong, afraid of not being right early enough, or that they’re self-conscious about being able to tell the difference between the future and someone else’s investment.
I’m sure somebody will respond to this and say that there are many projects that aren’t malicious, that there are NFT artists who’ve made money, that there are all sorts of positives I’ve glossed over. My natural response is that these are dramatically outweighed by the harm and risk that these technologies cause (and that’s without the environmental problems!) - this is a system that is purpose-built to exploit others, that is funded and controlled by definition by exceedingly rich people, that has no safe guards or protections or ways to help those who have been harmed by it.
And by pretending that underneath all the harm being caused there’s some sort of positive future, you are actively failing your readers.