Talking Their Book

My EE380 talk gained about a quarter-million page views, thanks to @markrussinovich, a shout-out from Prof. Dave Farber, and an enthusiastic review from Cory Doctorow.

Unusually for my blog, the majority of the comments weren't spam, and almost all passed moderation. Here are some hints that will help your comment survive moderation:

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Compared to most authors posting criticism of cryptocurrencies I was very lucky. The reason I started the talk by pointing out that I wasn't "talking my book" is that the discourse around cryptocurrencies has become corrupted by HODL-ers "talking their book", and that their response to critics is often toxic.

Below the fold, I look at this problem.

Phil Libin, a successful VC who emigrated from the Soviet Union as a child, compares the hype around the metaverse and web3 to Soviet propaganda:

There are no use cases. There is no single site that lets you do anything useful or at scale. It reminds me of Soviet propaganda. It's not communism yet, we are still building it, but it is coming. But if you had an uncle who went to Czechoslovakia, not to mention Western Europe, he could tell you that the life you were living was not communism. It was objectively worse than how the rest of the world lived.

Same thing with Web3. It's slow. It's not reliable. It's expensive. It's super not-secure. It's dangerous. It just doesn't work. You know that other stuff works because you see it on the rest of the internet. But you are supposed to believe in it like the Soviets were supposed to believe in a communist utopia.

I would be happy if I turn out to be wrong about Web3 because it's based on some very beautiful ideas about decentralized trust and democratizing everything.

Startups sometimes talk about a technology looking for a problem. This is worse. It is an ideology desperately looking for a problem.

And explains the propaganda as VCs "talking their book":

I don't question how genuinely they believe in Web3, but I think it is about incentives. VC firms get paid for investing. They want to raise bigger and bigger funds faster and faster. In Web3 and crypto, they found the ultimate thing that you could put an infinite amount of money into because it doesn't do anything, so there's no natural limit, and it lets them turn those funds around quickly.

But it isn't just the VCs, and the entrepreneurs they fund. In ‘Crypto Ruined My Life’: The Mental Health Crisis Hitting Bitcoin Investors Ruchira Sharma writes:

Despite the intense stress shared by some crypto investors, finding a space to discuss these experiences isn’t easy. Across Reddit and Twitter conversations around crypto, there’s usually one reaction to downturns: “Don’t be an anxiety bitch, HODL [Hold on for Dear Life]” – in other words, don’t you dare pull out. Memes regularly circulate that joke about the intense stress and torment that come with investing.

The need to put on this brave face could be down to the fact that voicing your anxiety has a direct impact on the markets, which are essentially a reflection of confidence. Coins go higher the more people invest and drop the more people pull out. Crypto might be anxiety-inducing, but people don’t make money from acknowledging this and actively lose out if they do.

The value of HODL-ers portfolios exists solely because other people believe that "number go up" from its current value. If they don't believe that, they won't pay the current "price". Thus anyone casting doubt on the current "price", or more broadly the technology, is perceived as directly threatening their financial well-being. Threatening someone who, as Sharma describes, is already stressed is likely to evoke a violent reaction.

Maxwell Strachan's Bored Apes, BuzzFeed and the Battle for the Future of the Internet provides an example of the violent reaction:

On Friday, February 4, BuzzFeed’s Katie Notopoulos published a story that ignited an online war. The reason was simple: In it, the technology reporter revealed the names of the main founders of the Bored Ape Yacht Club NFT collection to be two men named Greg Solano and Wylie Aronow. Almost immediately, the public identification of the previously pseudonymous Solano and Aronow led to self-righteous anger. Many vocal proponents of crypto, NFTs, and/or web3 believed Notopoulos had “doxxed” the 30-something-year-old men—and put their physical safety at risk.

In reality, Notopoulos committed routine journalism:

BuzzFeed News searched public business records to reveal the identities of the two core founders, who go by the pseudonyms “Gordon Goner” and “Gargamel.” According to publicly available records, Yuga Labs, the company name behind BAYC, is incorporated in Delaware with an address associated with Greg Solano. Other records linked Solano to Wylie Aronow. Yuga Labs CEO Nicole Muniz confirmed the identities of both men to BuzzFeed News.

Subsequently, the other two founders unmasked themselves.

Are BAYC’s founders powerful? Yes. Wealth is power. That’s why Forbes and Bloomberg publish lists of ultra-wealthy individuals and families. The people on those lists would often rather keep their wealth a secret. Where’s the outcry when they are named?

— Jeff Bercovici (@jeffbercovici) February 5, 2022

In Hypocrisy and The Consequences of Monkey Laundering, Ed Zitron skewers the idea that rich people should be anonymous:

It’s utterly loathsome that thousands of mewling sycophants are complaining about the “privacy violations” of the BAYC founders. It’s not simply that these people live opulent, care-free lives - it’s that they want all the benefits of being a public figure (attention, money, status, privilege, and so on) without any of the costs (negative attention, taxation, regulation, and corporate responsibility). It is an act of hypocrisy, borne of the same greed as the corporate fat cats that crypto pioneers claim to hate - an intentional effort to obfuscate one’s wealth as a means of enriching oneself further.

These people want to be treated both as the financial leaders of the future and as cutesy “aw shucks, they’re just like you and me” artisans. They want to keep doing cool parties with confused celebrities and have their wealth and power totally unscrutinized.

Strachan notes:

Pseudonymity is an ingrained part of Web3, the umbrella term for a vision of a decentralized, user-owned internet with cryptocurrency payments and NFTs at its core. Proponents of Web3 see this as a chance to cure some of the ills of Web2’s toxic social platforms. Holyn Kanake, a former Twitter employee and influential crypto enthusiast, wrote in her Substack newsletter about the potential for communities not required to use their legal names — but held accountable by their blockchain reputation — to reduce harassment.

But this is the kind of gaslighting endemic to cryptocurrency discourse. In Abuse and harassment on the blockchain, from the female victim's perspective Molly White details just some of the problems anonymity, immutability, and the ability to "airdrop" content create:

In the frenzy to attract venture capital funding and draw new users and investors into blockchain technologies, this question is once again going unasked. While blockchain proponents speak about a “future of the web” based around public ledgers, anonymity, and immutability, those of us who have been harassed online look on in horror as obvious vectors for harassment and abuse are overlooked, if not outright touted as features.
,,,
Imagine if, when you Venmo-ed your Tinder date for your half of the meal, they could now see every other transaction you’d ever made—and not just on Venmo, but the ones you made with your credit card, bank transfer, or other apps, and with no option to set the visibility of the transfer to “private”. The split checks with all of your previous Tinder dates? That monthly transfer to your therapist? The debts you’re paying off (or not), the charities to which you’re donating (or not), the amount you’re putting in a retirement account (or not)?
...
There is surprisingly little discussion of the enormous potential for abuse built in to blockchain-based technologies, and I’ve barely even scraped the surface here. Indeed, I did a search for “blockchain harassment” and found little more than promotional materials for some startup apparently solving workplace harassment ~*~ with the blockchain ~*~ (god help me). Both the web3 space and its group of outspoken critics have, to date, struck me as overwhelmingly male, which I suspect plays a role in this. Though often described as though it will somehow solve all of the inequalities that are built in to society, the leaders in the blockchain space don’t appear to actually be thinking about a lot of them.

White provides a real-life example in Non-binary web3 community member receives transphobic abuse via Ethereum transactions:

A non-binary web3 community member shared on Twitter some of the horrific abuse they had received, writing, "gm, they're harassing me ON CHAIN now... sending encoded messages via ethereum txns to my wallet address". The message they shared contained several paragraphs of transphobic vitriol.

There is no way to prevent someone from sending an Ethereum transaction to a known wallet address, nor is there any way to remove abusive messages from the blockchain. On the bright side, noted the recipient of the attacks, "this person had to spend $7.16 in order to harass me lmao".

The rich, white, male perspective is exemplified by It’s Time for Bitcoin to Become a Better Tool for Laundering Money by Joe Weisenthal:

Ultimately [Alex Gladstein] thinks Bitcoin’s goal should be the equivalent of other open projects, like Signal, Tor, or even email itself. Yes, they can be used by people you don’t like. But if they couldn’t be used by them, then they couldn’t be used by the people you do like.

And if Bitcoin never achieves this status — where it can be used by anyone without influence from a centralized entity like a government — then it’s really not clear at all what the point is.

Weisenthal is arguing the benefits of anonymity, which are real, but he completely fails to balance them against the downsides for the victims.

To no-one's surprise, especially given her gender, Notopoulos was harassed:

Jordan Fish, the crypto personality who goes by Cobie and runs the popular show UpOnly, called Notopoulos “a whore for clicks.” The founder of a crypto recruiting firm suggested the Bored Ape community could pool its money together through a decentralized autonomous organization and complete a Gordon Gekko-style “hostile takeover” of BuzzFeed. People sent Notopoulos threatening messages, saying that they were uncovering the addresses of her home and place of work and those of her parents and siblings. (“Your parents [sic] suburbs are not that far away actually,” one person told Notopoulos.)

The harassszment continues, as Molly White reports in NFT artist "Robness" mints an NFT of a journalist's childhood photo to harass her:

Robness decided the best way to make his displeasure known would be to find a photo of Notopoulos as a young child and turn it into an NFT titled "VOTED MOST LIKELY TO BE A FAILED JOURNALIST: KATIE NOTOPOULOS". The NFT description read, "Failed journalism is a true art to master. With Buzzfeed's new article about the Bored Ape Yacht Club, Katie Notopoulos went where no journalist usually goes. She ousted [sic] both of the Bored Ape Yacht Club founders while providing baseless claims of racist tropes about their artwork to further stir up contention. We thank Katie for her continued pursuit in tainting the once respected practice of real journalism. Here we have what is known as doxx art. Enjoy."

Strachan quotes from an e-mail from Molly White:

I actually think the backlash is quite representative of the crypto space, which I've found to be so resistant and hostile towards criticism in ways I'm not sure I've seen before. Some proponents of crypto get enormously angry with those who so much as question the technology, much less criticize it, and I've been told on more than a few occasions that it's not okay for me to express my skepticism or opinions,
...
[T]here are lots of very good and noble reasons people might want to stay anonymous: people living under oppressive governments, whistleblowers, journalists and researchers exposing extremists, ... I'm not sure if I'd put ‘want to run a multi-million dollar company without any accountability’ on that list. I am surprised that so many in the crypto space are so fiercely protective of the anonymity of the people behind these huge, multi-million dollar projects, especially when a lot of the reasons that people involved with them have chosen to be anonymous have turned out to be really shady.

Notice that, unlike Weisenthal, White does balance the benefits against the downsides. But I don't think White should be surprised. The crypto-bros don't care that the people behind these "multi-million dollar projects" are "really shady". All they care about is "number go up". And now that number go down, their stress level has spiked, hence the violent reactions to any discourse that might increase the failure to proceed moon-wards.