Cryptocurrency Is Still In Its Messy Adolescence

"William Shatner has called crypto 'cyber-snob currency.'"

There, in a single sentence, from this week’s (dis)enchanting Nick Paumgarten New Yorker story about Ethereum, is the entire cryptocurrency mess in eight words.

First off: what kind of world are we in where William Shatner 1) even knows about cryptocurrency 2) has an opinion about it 3) gets quoted on that opinion in the New Yorker 4) is actually correct?

It's so perfect. The Paumgarten piece, which is full of amusing asides like this, is just about the best piece I've ever read about cryptocurrency. It manages to explain the arcana of distributed ledgers, proof of work, mining, etc., without dipping too far into the jargon. It captures what's cool and inspiring about crypto while remaining appropriately jaded. It paints a portrait of Ethereum inventor Vitalik Buterin as a messianic alien without succumbing to Wired-style hero worship. And it skillfully depicts the bro antics of the legions of opportunists who surround Buterin, even in the Ethereum community, which is probably the most promising / least cynical of the blockchain-based movements.

Here is my opinion about cryptocurrency, if anyone cares. In the long run, it will revolutionize business and economics. Legacy processes that depend on fiat currencies, written contracts, and lawyers will, in many cases, be replaced by blockchain-based processes, because they're more traceable and transparent.

But: the long run is long. It will take half a century or more to make the transition. Bitcoin, the first cryptocurrency, will die sooner or later: it is too flawed in its basic design. (For a non-existent thing, a Bitcoin has a shockingly huge carbon footprint.) It's also too overrun by criminals, schemers, and snake oil salesmen. As are most of the other cryptocurrencies. Not for nothing are they called "shitcoins."

Something better will have to take their place. Maybe it will be Ethereum and ether. Meanwhile, the whole movement is currently overrun by hype and greed at a level that threatens to destroy the idea of blockchain before it is properly tested. It's hard to see initial coin offerings (ICOs), for example, as anything more than Ponzi schemes, a way for startups to raise money without going through the rigors of actually, you know, writing business plans and building prototypes.

I would never invest in Bitcoin or any other existing cryptocurrency. Then again, I would never have boarded a NASA moon rocket or space shuttle—they malfunctioned too often, and I'd get instant space sickness anyway. Yet a dozen people have walked on the Moon, and it's likely that we will go to Mars in this century. That's technology for you: horrifying in the short run, transformational in the long run. It's getting through that first part that we need to practice.