In what now seems like a point equidistant between today and the Trojan War, James Carville, then a strategist for candidate Bill Clinton, noted that the economy was the seminal issue in the 1992 Presidential Election.
Carville created a simple phrase to share with his staffers, ‘it’s the economy, stupid,’ to keep the seminal issue front and center. Yesterday, at roughly noon Eastern Standard Time, Bitcoin (BTC) dropped to nearly $5800, marking one of its lowest prices of 2018 and likely prompting some in the BTC community to self-evaluate and reflect. One are of reflection must be that BTC has a complex series of messaging problems that will have an effect on any significant price increase. For example, Tom Lee, from FundStrat, has a very bullish prediction for 2018.
CNBC reported that Lee wrote to investors, “We believe the regulatory picture is now improving — best evidenced by Coinbase and Circle ‘running towards’ regulation. We are basing this on the notion that Coinbase and Circle would only take these actions if such was the case.” Lee, in his bullishness, often plays the role of evangelist, not fully discussing the issues that are blocking BTC adoption. As with many BTC bulls, Lee’s stance is that BTC has only one place to go: up; yet this stance mostly abstains from addressing the coin’s messaging problems.
Before Sunday’s low, some in the crypto-ecosphere were already contemplating the complexities that BTC faces. Charles Hoskinson, at the Crypto ICO Summit held in Zürich during March, noted that BTC speculators shared a ‘collective delusion’ compelling the community forward. Although there are a multitude of reasons for the BTC community’s shared ‘delusion,’ Hoskinson, the CEO of IOHK and the lead developer of the Cardono project, underscored how the community actually overcame the ‘delusion stage’ when liquid markets developed for the currency, yet he details that the next stage for BTC to conquer is utility.
Hoskinson noted, “Then, suddenly, 2013 came around, and BTC got valuable, and we had liquidity and had real markets. There was over a billion dollar valuation…Here is what happens when the delusion sets-in: Then you have differences of opinion; then you have a desire for utility and use. We liked the delusion but don’t like the implementation.” By conjoining Nathaniel Popper’s title from his well regarded book on BTC, Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money (2016) with a quote from John Steinbeck’s of Mice and Men (1937), it may be said ‘that the best laid BTC plans, both from misfits and millionaires, often go astray.’ Below, decoupled from the ephemeral dips or dramatic price rallies, three messaging concerns need to be addressed to assist BTC in regaining the counter-narrative monetary framework that put it on the currency map.
In Laura Shin’s podcast, Unconfirmed, from March 30, 2018, Ari Paul, CIO of BlockTower Capital, contended that BTC requires a professional team to handle the core business. Paul continued by noting that the early contributors, such as Gavin Andresen and Nick Szabo, needed to be transitioned out from central roles, similar to how start-up teams are replaced by more established industry veterans once a project is profitable. Paul’s rhetoric mirrors traditional hedge-fund language that does not fully cohere with the ideologies of the early BTC community and the cypherpunk movement, which remain foundational to cryptocurrency.
Paul is not alone framing the next stage of BTC in this traditional manner. In fact, the dramatic price increase in late 2017 was complexly interwoven with tropes of professionalization and their enactment in the form of a futures markets.
However, Andreas Antonopoulos, as seen in a December 2017 Bitcoin.com article, stressed that a futures market could dramatically impact the price of BTC. Although Antonopoulos did outline a scenario for BTC price stabilization due to the futures market, this scenario did not materialize. Antonopoulos, likely the most respected person in crypto, actually sits on the CME’s board that oversee BTC’s futures. However, this move toward professionalization, dating back to the first ETF attempts, connotes a wooing of the legacy financial system, which would have been anathema only a few years ago. And, as seen by the CME and CBOE adoption, BTC has not launched to the moon, or stabilized, indicating that full-fledged strategies need to be vetted prior engaging in complicated markets. If not carefully reviewed, complex commodity trading strategies could cause further volatility instead of stabilization.
Roger Ver had consistently lamented, prior to his Bitcoin Cash (BCH) hard fork in August of 2017, that BTC was strongly deviating from the core vision of the BTC Whitepaper. Ikye Aru, in a fall article on Coin Telegraph, highlighted Ver’s emphasis that BCH aligned more closely with the original vision of BTC. In the article, Ver continued, “Bitcoin Cash is the real Bitcoin and will have the bigger market cap, trade volume and user base in the future.” Beyond the topic of entangling alliances in the form of BTC’s professionalization, the BTC community’s tolerance of censorship stands in direct opposition to any notion of decentralization. Post-BCH fork, it is understandable that Ver is not unabashedly welcomed on BTC Forums; yet it seems that BTC Forums would benefit from a level of tolerance for disagreement.
In early fall of 2017, Ver tweeted, “Without the censorship by Theymos and it being tolerated by Blockstream and Core, would any thinking person actually support these ideas?” In this tweet, Ver noted the hypocrisy that BTC supporters would tolerate censorship and not speak out about the growing influence of Blocksteam. Although Ver’s tweet was months after the BCH hard fork, the continued censorship seemingly signaled that the BTC community may have been too focused on short term valuation of the coin rather than on appraising the long-term impact of censorship.
The Theymos censoring was decried by many outside of the BTC community too. Amanda B. Johnson, well-known for her 2016-2017 Dash Detailed YouTube show, also spoke candidly against Theymos’s censorship, noting that the BTC community should have a platform on which to engage in open discussion. Additionally, Medium blogger John Block chronicled a history of Theymos’s censorship dating back to 2013, highlighting how the moderator removed posts. CCN, in a spring 2017 article, discussed how Reddit BTC moderator “Jratcliff63367” had resigned due to censorship. This type of censorship may deserves more scrutiny, and it is likely doing the BTC brand harm. Bitcoin maximalists may have been frustrated by Ver’s advocacy of Bitcoin Cash, but Ver was not the only one who complained of censorship, and the BTC community’s tolerance of such impoverished exchange appears to signal a new Zeitgeist for BTC.
Last week, in Wired, Gideon Lewis-Kraus detailed one way that the decentralized utopian vision could end badly, vividly depicting how one of the largest Initial Coin Offerings (ICOs) of 2017 is seemingly pleading for a coup de grâce. Equating BTC to Tezos is a fallacious in at least the scale; nonetheless, Lewis-Kraus’s retelling of the Tezos debacle is a cautionary tale in that it highlights how even the best intentioned projects can wildy go awry. Above, we have underscored how BTC, regardless of the price fluctuations, faces complicated, but not intractable, problems. In particular, zealous appeals for corporatization are seemingly antithetical to BTC’s core technology and the ethos of decentralization. When a salient contribution of the BTC White Paper is the ability to run uncensorable, permissionless transactions, this self-contradiction and, to a degree, paradoxical absurdity—as seen by the widely practiced censorship of some BTC SubReddits—cannot be overlooked.
About the authors: Ed Lehner, Ph.D. is a faculty member at the City University of New York and a seasoned research methodologist with extensive training in qualitative and quantitative frameworks. Ed focuses his research on blockchain applications combining data sciences and higher education. Ed also is an advisor to Scienceroot, which aims to be the first blockchain-based scientific ecosystem to integrate a Social Media Scientific Network, Funding Platform, and Decentralized Publishing Framework.