Cryptocurrency is the future. It’s wresting control of our financial system from the greasy mitts of fat cats and useless bureaucrats and giving it back to the people. It’s decentralised. Transparent. Democratic.
OK, sorry if you’ve been given that spiel before. Most of us have heard this recited by an overenthusiastic mate, family member or bad date turned part-time evangelical for the Church of Crypto when their Shiba Inu coin tripled in value.
“You should invest,” they say, waving a colourful app that looks a lot like a video game.
As someone who’s always been interested in the possibilities of tech, I’m attracted to the idea of cryptocurrencies (digital currencies that use a decentralised database to track transactions). The idea of removing the friction that comes from middlemen and gatekeepers to see what happens as a result is exciting! Building unique digital items (NFTs) or organisations with transparent, enforceable rules (DAOs) are some of the intriguing new tools in our digital arsenals built off the back of crypto.
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But like any other technology, cryptocurrency isn’t inherently a good thing just because it’s new. As I mentioned in the last edition of WebCam, I think we have to approach all new technologies with scepticism after seeing a generation of technology radicalise our uncles and foment genocides and violence so they can show us ads for Snoodies.
Boosters are happy to skim over the dark side of cryptocurrencies. There are scams, endemic wild speculation and profiteering, and catastrophic environmental impact. These issues aren’t unique to cryptocurrencies, but I reckon that something held up as “the answer” needs to answer a few more questions.
The difference in opinion between the boosters and the cynics can be easily explained: the former believe in the promise, the latter look at the reality of what we have now. Cryptocurrency promoters believe that many of the critiques are transient and not permanent. Critics disagree.
Let me give you an example of this gap. A month ago, I thought to myself: “Hey, you call yourself a tech reporter. How can you write about cryptocurrency when you’ve never actually bought any?”
So I did. I searched Google for an exchange, which is the online marketplace where you can buy cryptocurrencies. I settled on a major, reputable exchange called Coinbase based on some online reviews. I set up an account on a slick mobile app which needed me to submit a government ID, which didn’t work the first few times. When it finally accepted my passport, it struck me as ironic that I had to volunteer a whole lot of personal information that’s secured by the government so I could use this decentralised, supposedly anonymous technology.
I bought a combination of Bitcoin and Ethereum, the two biggest cryptocurrencies whose infrastructure ungirds most of the industry, using a credit card. Easy enough, right? The purchase went through instantly, minus fees taken by the exchange as the middleman.
Over the next couple of weeks, I saw a lot of green (gains) and a few days of red (losses). Prices for the two currencies ping-ponged around for reasons beyond me. All I knew was the app showed a rough trend upwards for my portfolio, which gave me a dose of dopamine every time I checked it.
Preparing for this column I thought it was time to sell up and realise the fruits of my capital. I had made $42.75! Actually it feels wrong to say “I” made it. It just increased. But I’m cool with that.
That’s when I hit a hiccup. Coinbase wouldn’t let me cash out because I’m Australian. Something I hadn’t figured out in my research was that the exchange was happy to take Australian dollars to buy cryptocurrency but wouldn’t let me sell it. Why? Not sure. But it felt crazy that one of the biggest establishments in crypto hadn’t figured out (or didn’t want to figure out) how to be fully functional in a country like Australia.
I can’t help but feel like a regulated technology would stop a half-baked service from being offered.
This is crypto in a nutshell: despite the promise of a better world, it’s beset by many of the existing world’s problems while also inventing some new ones. I remain tantalised about what it could be, but that feels so far away. I want to believe.
That’s what I want to cover in CryptoCam, a monthly column that will be your guide to the bullshit and bullishness surrounding crypto.
Oh. And please don’t ask me how this is going to affect my tax.