“But where the danger is, also grows the saving power.” - Friedrich Hölderlin
The euphoric sentiment on Twitter suggests that another crypto bull market is upon us. Congrats, anon—you made it. But wait, consider: are we really at the start of the next supercycle, or is it simply that the equities market needed somewhere to accommodate the overflow liquidity? Perhaps narratives—stories we tell ourselves and each other about AI, Storage, Gamefi, Blackrock and Citadel, etc.—are all second-order effects of price (or, at least, they are intertwined reflexively). Stepping back, I believe little has changed since FTX blew up last November, at least from the tech and innovation side. Thus, now seems like a good time to reflect on what crypto means for me, someone who has been in the space full-time since early 2020, and why I’m bullish on crypto for the wrong reasons.
Crypto has always been about freedom. Or, at least, that was the narrative I heard when I first discovered BTC in 2017. But freedom for whom, to do what? Freedom for bridge hackers to stay anonymous? Freedom for basement-dwellers from reality? Freedom in your choice between doge and shib when you check out at the grocery store? The very notion of freedom eludes straightforward understanding. In fact, we may be far less free than we realize or more liberated than we were in the past. Trapped in murky waters, we grasp for meaning like hysterics, seeking a master to rebel against through questioning and critique driven by our own lack of understanding. Outward rebellion masks inner dependence. And with the master revealed as necessary to their rebellion, the hysteric's supposed emancipation falls away. For me, crypto's decentralized ethos promises to free individuals from state control, but its egalitarian ideals are contradicted by deep inequities, its emancipatory promises undercut by covert dependence on existing power structures.
Even setting knotty questions about freedom aside—as philosophically-inclined crypto idealists often do—crypto's idealistic promises ring hollow. Specifically, the antipode of the crypto=freedom story is crypto = equity/fairness. The argument is as follows: by leveling the playing field, cutting out the corrupt centralizing monopolies of violence, crypto offers us League and nicotine-addicted zoomers a fighting chance against wall street and big tech. Yet, despite high-minded rhetoric, crypto is, in truth, an extremely inequitable space. Sure, there are many paths to Rome, and I know many people who have made seven figures from nothing, each carving out their niche, from mintech-botting degens to CEX-DEX arbitrageurs on AVAX. Yet, even after this industry has existed for over a decade, shutting people down by calling them poor is normalized. Everyone rejoices when the bybit apes get liquidated from longing as they chase a fresh high, again. No one cares that the new altcoins, which finally bring in fresh blood, instantly rug if they dump on the biggest fool.
Crypto is not for people with a conscience. Bereft of any legal safeguards, the narrative of a creator economy, which initially promised to empower individual creators with 100 true fans against the tyranny of web2 companies, started faltering long before a16z made its strategic pivot to AI. The emergence of AI-generated content appears to be the final straw, burying this once-promising story just as the metaverse began to Snowcrash.
Thus, at the risk of being unfair, I now habitually dismiss friends still clinging to either crypto's egalitarian or libertarian ideals. They parrot dreams of "sovereign individuals" in a "network state," spinning visions of a frictionless financial system destined to displace Bretton Woods and Goldman Sachs. Yet for a topic so emotionally charged, we must temper inflated rhetoric with modesty. The strident dialectic between egalitarian and libertarian viewpoints must, I insist, cede to a more moderate mindset—crypto elicits our hopes and dreams, yet it also risks inflaming our tendency to self-deception. We must refrain from uncritically extolling crypto as a beacon of newfound freedom or hastily dismissing it as merely the latest fad in speculation.
So, despite my pessimism, why am I still bullish on crypto? Firstly, to reiterate, fiat currency draws its value from the state's backing—both its raw military and police power, and the subtler ideology that legitimizes its rule. The value of Bitcoin, on the other hand, is not guaranteed by any institution and is determined by how much the marginal buyer and seller are willing to settle for it right now—here, speculation, trust, and autism reign supreme. Bitcoin functions like an ideological ghost—a force made real through believers' conviction. Just as communism requires adherents, bitcoin relies on faithful followers—hence Marx's invocation of communism in The Manifesto as a "spectre haunting Europe"; all ideology thrives on such ghost stories.
My insight here is that the lack of the real does not make ideology any less potent. By ideology, I lean on both the Hegelian meaning of illusion/semblance and the Marxist meaning of the cultural forms which embody the material conditions of society in a way that normalizes the interests of the dominant class while simultaneously camouflaging them. I conceded that it is true that, at present, crypto does not produce much use value: when you leverage your coins on protocols like Aave, your primary option is to purchase Bored Apes in anticipation of profiting from future airdrops—a cycle that ends when you liquidate the airdrop for a profit and unwind your leverage. This is not organic money creation. Yet such distinctions blur in a world where all fixed truths dissolve into simulacra. Money had no inherent or stable form to begin with, it merely expresses itself and actualizes in different ways—coins, notes, entries in a ledger—depending on the virtual forces within a society. The history of money proves this point plainly. Money’s current digital actualization as Bitcoin reflects our postmodern forces and ideals, and this virtuality behind Bitcoin is the most powerful expression of where society is heading, thus there is nothing to worry about in terms of price.
Besides “practical use cases,” there is a bigger problem that worries me: by design, a large amount of capital is required to guarantee that BTC is free of any external authority and the accompanying legal fees (large amounts of capital are still required to maintain the security of ETH even after the ETH2.0 PoS upgrade). In fact, it is required by any consensus mechanism, sufficiently decentralized. Thus, the potentially progressive idea of crypto as global, independent of monopolistic state apparatuses and instead is for the people and by the people, actualizes itself in a form that undermines its premises. Although cryptocurrencies debut as decentralized entities, the nature of capital—its proclivity to accrue (compound interest being deemed the world's eighth wonder)—ensures a steady drift towards inequality: the rich invariably grow richer, and the poor, poorer. Crypto's premises hold emancipatory potential, but it reproduces the exclusionary dynamics it ostensibly opposes.
NFTs are a good example of what I'm talking about. Emerging out of the Web3 SocialFi boom, NFTs purported to emancipate individuals from rigid identities tied to nationalism and the spatiotemporal realm altogether and propel them into the metaverse, starting with profile pictures that promised many utilities—social, economic, and beyond. Yet, although NFT pfps purportedly freed individuals from the bondage of real-life identities and communities, they still depend on hype-driven status games that follow to the letter the exact logic of capitalism. Similarly, the new web3 social rails that they were supposed to run on, social networks like BitClout, etc. foreground financial speculation over realizing a new social vision because they lacked one. The NFT utilities that touted NFT2.0 incurred unsustainable costs, revealing no perpetual motion machine exists: Azuki is the prime example that comes to mind. At their core, these SocialFi-NFT-powered networks excel at incentivizing participation via financial rewards, not upholding egalitarian ideals. The interoperability/composability we were promised was simply infeasible because they ran counter to the logic of profit. Users seek economic gain rather than abstract principles, so we increasingly see engagement as something we could farm, like a crop.
Ultimately, the value of NFTs hinges on the clout they confer upon their owners. They exist as expensive copies, emblematic of symbolic ownership that could yield profit. I think NFTs are good for a couple things: on the surface level, they are good tools to bootstrap liquidity for new projects and generate hype. On a deeper level, they enchantingly counterpose our capitalistic consumerism, where everything can be quantified into 'utils' and traded (their non-fungibility), while simultaneously epitomizing extreme commodification in their hyper-tradability (e.g., blur farming). If Peter Thiel's (or Andreesen's, I can't remember) assertion that the digital world is fast becoming a printed-out version of the real world holds true, NFTs compel us to reconsider our understanding of property and ownership in the digital domain. But that is as far as their value prop goes, even for me—a rethinking, speculation, experimentation, etc. If you go on Nansen and look up a profitability chart, a couple of of big addresses make all the money while most people get rugged.
In the end, despite Crypto’s perceived revolutionary ideals, NFTs' seeming deviation from the normal functioning of money and commodities, they merely embody a potential already inherent within the capitalistic conceptions of commodity and money we are familiar with. To borrow some terminology from critical theory, I think crypto is but the actualization of the financial system's inherent negativity. In its negative force, it forms the necessary framework, delineating the formal condition of its possibility. The appearance of freedom in our society of control can only be afforded already under the pre-conditions of digital and other control mechanisms that frame our understanding of freedom in the first place. Therefore, at an ideological level, I think the liberating aspect of cryptocurrency is illusory. The prevailing dialectic—between authoritarian control and libertarian individual sovereignty—presents a false dichotomy. Yet this observation does not detract from crypto's appeal—who doesn't want to play an amazing fully on-chain game where your expenditure naturally morphs into an investment? Who doesn't want to LP Miami-real-estate-NFT/ETH? We need a Zarathustra who can rescue us from the intellectual complacency wrought by both bulls and bears alike and liberate us from the intellectual nonage imposed by social injustice, racial and gender totalization, and oppression, that comes with this crypto-hypercapitalist system. Alas, to think differently is not a solitary activity. It is difficult, if not impossible, to do on one’s own, even for one such “sovereign-individual.”
Despite these sobering reflections, my sentiments on price remain bullish. As pure ideology (simulacra that structure the real, if there is the real as such), crypto is unparalleled. In fact, it is precisely crypto's contradictory and paradoxical nature that attracts both the most idealistic evangelists and the most conniving grifters. Even as it is, without the tech getting better (which it will with time) it will be worth more than the trillion dollars it is now. NFTs will survive too, because it's the most frictionless way to assert your status in a hierarchy freed from the limits of space and time in the cybereconomy. The underlying logic is this: when wealth accumulation is of high social importance and the hoarding of money as possession is seen as a big dick competition, and the fetishism of a system of hieroglyphics based on suffering and domination continues, then the orange coin price will go up.
But the question we have to ask is, after all the wealth transference and creation, what has crypto really done to our world? For what has this revolution truly wrought, besides minting a new class of rollbit-shilling multi-millionaires?
In any case, it certainly doesn't look like freedom to me. If the industry continues on its current course, then I think it will only lead to a more divided society with a more hierarchical structure. And yet, it seems unclear that our current sovereign individuals have done much good to the world. As we stand on this precipice, peering into an uncertain future, I cannot help but feel uneasy precisely because of the firmness of my belief in crypto's continued growth. AI will be the catalyst we hoped for, showing us whether crypto’s promises of decentralization and ownership hold true, or if it will but manifest more inequality. But like Holderlin says, “where the danger is, also grows the saving power”—so let us not lose hope. If there is anything human history has shown, technological advancement (crypto, in this case) is not tied to social progress. Whether or not the latter is bettered depends entirely on the volunteerism of great individuals, and the future is never so much as predestined or “programmed,” no matter what our great prophets say.
The choice remains before us, always.