The year is 2017 and one of my best friend’s introduces me to Ethereum. He doesn’t explain it in any decipherable manner because, truth be told, he doesn’t understand it. Smart contracts, decentralization, nodes, trustlessness — none of it is in his pitch. Instead, he tells me BiG gAiNz.
I don’t listen.
This proves to be a mistake. He’s absolutely correct about the “BiG gAiNz.”
It’s April when I start researching and stumble into Bitcoin.
I’m blown away.
Not by the pump and dump mechanics, but rather by the idea that a digitized currency could be issued “fairly” and without government intervention. The concept is groundbreaking, even if adoption is slow, and I’m quick to jump on the bandwagon.
A Coiner is Born
I purchase a small amount of Bitcoin in late August of 2017 on Coinbase and quickly move it to a Ledger hardware wallet. The process is relatively simple, even if I’m not procuring my Bitcoin in an anonymous fashion or running a full node. However, the moment I move my Bitcoin from my Coinbase wallet to the Ledger, there’s something actually quite empowering about it: this commodity (or asset, or currency, however you feel like classifying it) is now under my control and difficult to steal… I mean, at least if I’m not being held at gunpoint. Plus, though I never end up doing it, transacting peer-to-peer with something not-USD is enticing — like rare mintage coins or work-for-equity.
But the continuous rip up in price doesn’t excite me the way it excites others in the space, and that’s when I’m introduced to Cryptocurrency Twitter and Reddit.
Social Media and a Descent into Crypto Hell
To say Cryptocurrency Twitter and Reddit are a shitshow is a euphemism. The two are filled with an equal mix of scammers, fools, satirists, chicken littles, and True Believers ™. Everyone has a pretty compelling argument.
- The Scammers: These folks have been involved in fraud, usually, long before Bitcoin existed, so they’re manipulative and convincing. People that often fall into this category are white label exchange owners, crypto lenders, and ICO founders.
- The Fools: As the turn of phrase goes, “For every sucker born, there’s two to take him.” The fools, while certainly not outnumbering The Scammers, are flushed with cash — be they trust fund babies or new money tech bros.
- The Satirists: This group includes some of my favorites, such as Buttcoin and David Gerard, who really don’t care what happens to Bitcoin, other than it gives them an opportunity to make fun of people confident in their poor decisions.
- The Chicken Littles: I include myself in this list, along with the likes of Bitfinex’ed and others who warned about a Bitcoin collapse before its drop to 3.2k, but continue to warn about the possible issues to this day. People like this rarely highlight positive aspects of cryptocurrency and some believe most projects are headed for zero.
- The True Believers ™: These people are “voluntarists” or libertarians and therefore believe the only way forward is without government and without a government regulated currency. They care less about trading and more about holding a non-government or government-regulated commodity/currency/asset.
These five different groups do not get along: now, before, nor likely ever. And it makes the atmosphere pretty atrocious.
Information Gathering Is Hard
It takes me months to formulate an opinion as to why Bitcoin is on its enviable trajectory, but my conclusion is one I’m not very comfortable with: exchanges and cryptocurrency “businessmen” have “cooperated” (conspired?) to prop up the price.
How do I reach such a wily hypothesis? Well, Bitfinex and Tether, the leading exchange and stablecoin, are each hacked, once in 2016, once in 2017 (respectively), without so much as a, “Here’s what happened,” summary. Instead, a strange shareholder arrangement is settled on while almost all customers are given a 36% haircut on their account funds. And somehow, after all of this, there’s strong support for Bitfinex and Tether in the community.
Meanwhile, BitMex and Coinbase seem prone to falling apart at just the right times and Binance appears on the scene to buy billions in Tether.
A Nocoiner is Born
As Bitcoin quickly plummets from the ATH of ~20k, I sell my Bitcoin in late January-Early February of 2018. My overall trade is neutral and my anger isn’t from “losing everything” — I purchased roughly ~$1,000 — but rather from the idea that “The Fools” are being had and don’t even know it.
I set out on a mission to warn people of what I *believe* to be major red flags.
Moving On and Seeing the BS
After selling all my cryptocurrency, warning of Tether and Bitfinex, and traveling across the world to hunt for answers, I decide to broaden my scope to encompass fraud, and, hopefully, a greater understanding of finance at large.
This proves fruitful.
A constant source of concern for the larger cryptocurrency community is the **totally real and soon to be realized failure of the US dollar and the US economy at large.** Of course, coiners have no means to back up this claim, but tend to virtue signal until the cows come home.
In reality, the dollar is positioned strongly and the US economy, while faltering like the global economy, isn’t showing a stronger weakness than any other market.
The dollar is used for imports/exports throughout the world, to settle debt, and besides seeing lackluster performance in regard to velocity, hasn’t been in any real danger.
There is a good reason to believe that the dollar will one day lose its dominance as the world reserve currency. Why? Simply because every world reserve currency throughout history has subsequently been replaced. There’s no reason to believe that the US Dollar will remain the world reserve currency indefinitely, but there’s also no reason to believe it’s at risk for losing its title now.
In addition, the idea that Bitcoin and Lightning Network, entities that on one hand require long wait times and clunky wallet management, or on the other hand, funds for opening channels and a complicated UI, will somehow replace the easy-to-use and reliable network that cash and banks provide, is laughable at best.
To this day I am left wondering exactly what Bitcoin provides and why it is valued the way it is. Digital gold? Digital cash? Digital oil? Digital public ledger of transactions — still almost unanimously valued in USD?
If you think the fiat world we know and <<hate>> (lol) is coming to an end because BiTcOiN, feel free to reach out on Twitter. I’d love to include some reasonable arguments postscript.