This is a post about cryptocurrency, but first, let me tell you a tale.
I graduated high school in 2009, right into the Great Recession. All the money that my parents' saved for my college education had rapidly shrank. In order to have a car on the road and go to school, I needed to work 30-40 hours a week. So, I got a job selling things at RadioShack and that was fine for a while. I was able to balance school and sell cell phones no problem. But that job went away cause I was giving too many discounts. Gotta make those sales! Technically, they expected me to pay them $500 in order to prevent criminal charges being pressed, but I never paid that and I don't think they're gonna press me on that anymore.
In any case, I needed a job fast and I really wanted something in IT. So I hoped on Craigslist and answered a job ad for a traveling IT technician. The interview was at a Panera and it went swimingly and I accepted on the spot. The next day, I got to see how janky an operation that hires off Craigslist is. They had moved a retail computer repair operation into a house the owner was living in. One of the technicians made a sub attic in the attic we worked that he was living in without heating or air conditioning. They had a "recycling center" in an abandoned warehouse that was definitely unsafe to be in. They had this high school student sanding down the insides of refurbished monitors so that a resistive touch screen could be fitted into it. The whole thing was gross, but hey, I needed money.
The primary client for this IT company were internet cafes. You may have a vision of internet cafes as a places in China for people to play video games and surf the web in a social setting. The internet cafes in Ohio were not too far from that, I suppose, with one major exception: they are places for people to gamble. The games they were playing were low tech video slots and instead of paying per game, they paid for time on the machines. This made the gambling legal by Ohio state laws but illegal under federal law. In practice, the FBI would raid these establishments frequently, sieze all the assets, and we would replace the machines with refurbished ThinkCenteres and the sanded down touch screens. No sense in paying for the best if it's gonna get yanked in 3 months.
The day to day was always drama filled and exciting. You drive to Sandusky to replace a switch. You drive to Cleveland Heights to setup a new cafe. You learn to make patch cables, you learn more about networking and scripting. You get in arguments about how much gas money you should be reimbursed for driving to all those sites. Lots of 16 hour days cause it has to get done now now now. Typical 2 bit IT shit.
What's a little different from a typical IT job is... the customers paying your bills are unsavory. And their customers are all poor people trying to turn a dollar into $10 knowing full well that the deck is stacked against them. Just addicted to these slot machines. But hey, you need their money so you can keep a car on the road, so it's okay, there's no issue here.
I've always been a smart ass that asks the questions that shouldn't be asked. One time, I'm on site and talking to one of our clients. He's looking for a computer that when he turns it off, all the data disappears. Okay, no problem, get him a souped up gaming laptop with USB 3 so that he can run a live Linux image. Easy. But then I open my dumb mouth to ask why?
Me: Why do you need a computer that has all the data disappear like that?
Him: I'm a bookie and that data needs to get gone if the cops show up.
Me: Oh, so you must have a guy that breaks legs?
Him: Yes, but that isn't a good first pass at collecting. Gotta work up to that.
As I went to leave, he hits me with $100 and a wink. You know now that this is now dead ass serious, but like all things when I was young, I didn't learn. But hey, that's $100 I didn't have before, again, no issues here.
Well, a few weeks later, the IT job goes sideways. We weren't making enough money, my boss institutes that the day will start at 6am and end when the job is done. And now we can't pay for all the gas that you need to drive to and from sites. Me pushing for that got me fired. It was all good, I quickly found more work doing web sites for a MLM scheme, but that's a story for another time, just to show that I was very dumb back then.
Fast forward 6 months. I'm working an internship at a respectable local publication and I get a call from an unknown number. I pick up and it's the bookie from a few months earlier. He's looking for someone to come out to his house and replace a hard drive. He offered to make it very worth my time. Me, forgetting how terrifying this whole situation was agreed to help him out. I drive over after work and sure enough, the hard drive in his desktop is bad, gotta go to MicroCenter to pick up a new hard drive. Before I get to leave, he pulls me aside and asks what's really on his mind:
Him: There is this guy that is talking shit about me and my friends in the comment section of the local newspaper. I want to find him and have a discussion. You know how I can do that?
Dear reader, I wish I could make myself the hero and say that I didn't offer any ideas. Said "I don't know" and walked away to get the hard drive with clean hands. But I don't get to do that, I need to live with my decisions and tell the truth. What I said was:
Me: I dunno, you could bribe the webmaster or someone at the newspaper to get an email or IP address of the commenter. There's no way to determine who it is based upon just the comment or the webpage.
I leave to my car and sit down for a minute in sheer terror. I then call my weed guy near by and tell him I'm pulling up. I smoke two blunts to the face before going to pick up the hard drive and finish the data transfer. The dude ends up paying me 3 times what I quoted, probably for some sort of silence that I am now breaking with this post. I never picked up the phone for that person again and have stayed away from that world ever since.
A decade later, looking back at this story, I can say that I learned a lot and have deeply internalized lessons from this. I have striven in every way to only make money ethically and for companies that are at least net neutral when it comes to human suffering. My partner is a social worker and me supporting their career with my tech salary is a handshake agreement that I've made with the universe to at least do a little good. This is a very big thing for me.
All that learning is fine, but I am still very fucking complicit in the human suffering that I supported by "doing my job". I didn't break any legs, but I sure as hell profited from people that did. By the grace of god, I'm hoping that I didn't get that poor internet commenter in any trouble, but that's only because another web professional said no to a bribe, I hope.
And all of that is ignoring the mundane aspects of my job: supporting internet cafes. I was supporting an enterprise that preys on the most vulnerable in the form of gambling. Sure, it was legal-ish and I probably couldn't be criminally charged, but it's still a moral gray area. You don't want to exist in moral gray areas.
Isn't this post supposed to be about cryptocurrency?
Back to how this relates to crypto. At the beginning of 2022, there was some drama about some well known developers going to work for crypto startups in public facing roles. I don't mean to subliminally diss them here, they shouldn't care about my thoughts at all. In fact, I'm very much in support of people getting life changing amounts of money from these overvalued companies.
With that said, I can't help but draw parallels between my story and where I see this whole crypto industry going. Right now, as technologists, a lot of us are "waiting and seeing" where this goes instead of taking a pessimistic view of any of the outcomes. We haven't learned anything from Facebook causing a genocide. While we ride the fence, non-technical people are heavily buying into crypto.
To be completely honest, my dad is one of these people buying into crypto. He also happens to believe in "sound money" and that the financial system will collapse and we'll return to the gold standard. These are conversations that I have to avoid except to tell him that I'm happy he's made money, but he's playing with an extremely hot fire.
Cryptocurrency has been around for over a decade and it really isn't any closer to being a stable currency. It probably never will be, regardless of what it's supporters tell you. Visa can do 100s of thousands of transactions in an hour while Bitcoin struggles to do a fraction of that. And the gas prices for crypto make the credit card fees for merchants seem like steal. And this is not to even mention the ecological impact all this crypto mining is causing.
(As an aside, I've always been confused about when a crypto person brings up the gold mining industry having at least the same impact as crypto on the environment, we just can't measure it. Literally no countries are still on the gold standard, so that is irrelevant. Also, being able to print and remove money from the economy is an amazing feature, not a bug. Look into all the recessions in the 1800s around mining too much or too little gold in a given year. If you want me to agree that all mining is bad, I mean yes, it's exploitative and a form of colonialism, but at least is serves a purpose that the general public can benefit from.)
What crypto is great at is being an unsecured speculative asset. It's great for people bored during the pandemic to gamble on the ups and downs of a market. The people that are super in to crypto are able to sell this vision to get people to buy into what is literally a Ponzi scheme when looked at in the right light. But hey, this is other peoples money, they are allowed to gamble as they see fit, right?
The other superpower crypto has is being perfect for criminals. Let's play the hits!
- Crypto is perfect for collecting payment in ransomware attacks against hospitals and municipal governments. You can track the rise of these attacks against the prevalence of crypto.
- NFTs replicate the worst elements of the art world being a tax haven EXCEPT it's far easier to commit fraud. You mint an NFT for $1k, sell it to yourself for $2k using another wallet, flip it to yourself a couple of more times til you can sell it to a mark for $8k, clearing $7k. It should also be noted that NFTs are ugly as shit and a capitalist's vision of what art is.
- Rug pulling/pumping and dumping is a concept that all crypto bros have accepted as a part of life. You launch a coin or NFT or DAO, raise a bunch of funds by getting influencers post about it on their story and then take off with the money and disappear.
I could go on and on about all the fraud here, but Web3 is going just great does a far better job chronicling this trash fire of crime.
This is where I go a little Galaxy Brain to convince you this is going to impact you and me. If we accept that this is a Ponzi scheme, we have to acknowledge that this would be the biggest Ponzi scheme ever created. Bernie Madoff made the Mets terrible for a decade, crypto is going to bankrupt almost everyone that has put money into it. It is a bubble that will either pop and cause a Dot Com level bust event OR pop when some other economic event happens. Personally, I think the first domino to fall will be the underlying corporate paper backing the Tether currencies to either be found to not exist (like the first Ponzi scheme, it's a classic for a reason) OR that paper rapidly losing value because of another bubble popping, like commercial real estate not rebounding from the pandemic. Once that happens, there will be a run on that currency, people will lose money and faith in crypto and the tech industry more generally, VCs will take massive losses, technologists will lost jobs and Regular Joes gambling on this market will lose it all.
Which brings us full circle: When people lose their shirts, technologists will have been complicit in this tragedy. They will have to reflect, as I have, about whether the work they did was worth it. For me, it wasn't, I could have swallowed my pride, worked a shitty retail job and focused on school. I would not have learned as much or had this story to tell, but at least I could sleep easy knowing that I did the right thing. I would guess that these technologists can make a life changing amounts of money in a lot of places, but hey, they can do them because they have to live with themselves.