More On: Bitcoin
Cryptocurrency makes huge claims, but it only has a limited impact. That's the way it should be.
One potential way of measuring the actual size of the cryptocurrency industry might be in square footage. It sounds bizarre but this mostly synthetic, digital asset class actually has a growing footprint.
The New York Times published an article on how “The Crypto Bros Are Snapping Up Manhattan Real Estate” on Sunday. It had a stronger headline than the article supports, but did provide a look into one aspect of this rapidly professionalizing industry.
According to the report, "crypto and associated enterprises are believed to occupy less than a million square feet of the projected 4.4 billion square feet of office space in the United States." Furthermore, many realtors view potential renters as "mom and pop" businesses, rather than risky bets that could backfire.
This appears to be a positive mindset. Crypto is dangerous, but for some, it's a viable business prospect.
Compare it to another ostensibly realistic example: A group of 26 concerned technology specialists, writers, and academics signed an open letter to the United States Congress this week, demanding "a critical, skeptical posture toward [the] sector."
The signatories specifically targeted the braggadocious statements made by individuals in the cryptosphere, as well as the predatory schemes that are common. It was intended to counter the crypto industry's increased lobbying in Washington, D.C., and, to be honest, it was generally fair.
"As software engineers and technicians with substantial expertise in our domains, we question the promises made in recent years about blockchain technology's uniqueness and potential," they said.
Crypto's reaction was also methodical, despite the fact that he never spoke in a single voice. Some people pointed out that 26 persons, even experts, couldn't speak for an entire sector. Others chastised particular terminology that paints crypto as a strawman, such as the argument that "not all innovation is unqualifiedly positive" - a position voiced by no one in the industry.
And, while the letter writers are true in claiming that many crypto supporters have financial ties to the asset class and are thus biased, they may face a similar charge. For example, Stephen Diehl, a London-based software developer and long-time critic of "public blockchains," has been paid by a "business blockchain" firm for years.
Other signatories have worked for, or continue to work for, Big Tech companies including as Microsoft and Apple, which could lose market share and revenue if crypto's open-source mentality confronts their private software business lines.
Furthermore, the assertion that crypto applications are "at best still vague and at worst non-existent" is a harsh statement that isn't wholly supported by facts. Tools are being developed and used, and Bitcoin has been operational for 13 years. It's just that cryptocurrency thrives on the outskirts.
Crypto, in many circumstances, delivers exactly what it promises: a way to conduct "censorship-resistant" transactions. That fundamental idea should be taken to heart by the entire financial and cultural superstructure that rises around it. The issue arises when crypto does not work.
In response to the letter, Vitalik Buterin, the co-founder of Ethereum, published a thoughtful thread on Twitter. He was especially disappointed that people he used to consider "fellow travelers" had soured on his network and the industry in general. He specifically names science fiction novelist and journalist Cory Doctorow, but other open-source enthusiasts could be implicated as well.
Doctorow, who was previously a soft backer of cryptocurrency, has become increasingly concerned about the industry's financialization and the potential for cryptocurrency to financialize all parts of human life, turning friendships into benefit games and our public data into a monetizable product.
This is a legitimate problem, in my opinion, if crypto aims for "mainstream adoption." Blockchains were not designed for this purpose, and with current technology, they simply cannot scale to such an extent. But, because of its transaction finality, irreversibility, and low transaction costs, blockchain is particularly good at guaranteeing that those who need it most may get it.
The authors do not advocate for more regulation. However, if crypto becomes too big for its own good, especially at an unnaturally fast pace fueled by startup capital and retail speculation, that is the logical ending.
It doesn't matter whether you agree or disagree with these claims or the 26 letter authors. They're already losing the point when they address Congress or worry about governmental punishment. Even if it's surrounded by a speculative bubble, the actual essence of crypto hasn't vanished.
The government was never expected to encourage transactions that were completely uncontrollable. Although not everyone will wish to utilize these systems, cryptocurrency will flourish as a result of voluntary adoption. It's about "carving out" space from the existing, troubled environment, as Paul Dylan-Ennis put it.
"We can't cure everything," he wrote, "but we may 'live as if we are already free."
SubStack writer Casey Newton wrote on a "vibe shift" in tech and tech media last winter. Where once effective regulation of Big Tech behemoths was a source of public or governmental worry about technology, this now appears doubtful.
Instead, the prevailing attitude is to consider how solutions could be constructed from the bottom up in Web 3 and beyond. Newton said that writers, the public, and the government all have a responsibility to approach this with skepticism. However, he advises individuals to "expect that US-led initiatives to control technology will fail, and deploy coverage resources appropriately."
For an industry with such a small presence, that's sound advice.
** Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of USA GAG nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.