In Beyond Good and Evil, Friedrich Nietzsche lists “objection, evasion [and] joyous distrust” as signs of health. By that standard, and perhaps that standard only, cryptocurrency’s public image is healthy. I mean, if you do a search for crypto stories over the past month or two, a third of what pops up are arrests for fraud and revelations of scams, another third are techno-utopian treatises lauding this miracle crypto-elixer, and the final third are ads to buy Bitcoin.
But isn’t this how it’s been from the beginning with digital currencies? There’s such a rush of stories, such overproduction of scenario-building, that one feels as if one is walking through a busy mall with pitches erupting from both sides.
Cryptocurrencies are wonderful! They can help lift the unbanked out of financial marginalization, mitigating poverty for tens of millions of people.They can make remittances easier, so immigrant workers, refugees, and international gig economy workers can send money to their families and communities. They can facilitate investment in small businesses, green energy, and other values-based investments. An electronic blockchain ledger can (if opened) expose fraud, trafficking, and other illegal dealings. On the other hand, their secure encryption guarantees privacy and independence. They can provide local communities, independence movements and grassroots organizers with financial access tied to neither central banks nor governments. They promise to de-center the dollar as the chief international currency, ending American imperialism!
AND NOT ONLY THAT, BUT
Cryptocurrencies are terrible! They can fund (and have funded) terrorists. They can fund (and have funded) organized crime.They can fund (and have funded) child sex trafficking. They can fund (and have funded) nationalist and anti-democratic movements. Their displacement of the dollar may have far-reaching economic disadvantages and turn the U.S. into a belligerent warmonger. They allow totalitarian regimes like North Korea the financial space to evade sanctions and fund, say, a nuclear program.
I realize some of these are contradictory positions. It’s like a hypothesis testing festival, a giant cryptocurrency debate tournament. And all of this might be moot, because cryptocurrency’s biggest challenge is convincing people to use it (probably the most difficult test for any alternative currency, and also the only necessary one, because once enough people recognize the legitimacy of a medium of exchange, it’s functionally legitimate—usually).
Perhaps Paul Krugman is right: “To be successful,” he recently wrote, “money must be both a medium of exchange and a reasonably stable store of value. And it remains completely unclear why Bitcoin should be a stable store of value.”
I’m not as smart as Krugman, but I suspect stability won’t always be a problem for cryptocurrency. I think the real problem might be that crypto’s constant manipulation by bad faith actors demonstrates that, while central banks and governments are terrible at controlling money, the curators and curriers of cryptocurrency may not be any better. Maybe everybody tends to hide their personal drive for power behind veneers of “freedom” or “responsibility.” When cryptocurrency is “good,” it’s because humans are good. When it’s “evil,” it’s because we’re evil. Is cryptocurrency just a mirror?