In the past I’ve described the feeling of navigating the crypto world as like walking through a wall of shit. Every day a seemingly endless barrage of new information gets pumped out from various news outlets as well as independent sources like personal Twitter accounts. While most of this information is valueless noise for those who may politically align with me, for a newcomer it can all be too seemingly complex to understand what is even being read in the first place. So much of all this is just really shitty disinformation that tries to convince you to go all in on yet another new token that resides on yet another new blockchain, both of which are definitely set to pop off in the coming weeks. The mainstream crypto world is riddled with reactionary assumptions about economics and/or politics that can turn off people who would otherwise have a lot to bring to the space. It sucks. ¯\(ツ)/¯
As someone who’s braved the storm of shit that covers the crypto territory, I’ve found many different strategies for navigating its treacherous landscape. Developing heuristics for quickly being able to tell whether something or someone is worth my time and attention (precious resources for anybody) has been essential. This goes for making a judgment on things said by both the crypto hype men as well as the critics.
I think I will be turning this piece into a series of writings. My list of heuristics has grown to be quite large as I have slowly added to it over time, and I think it’d be best to write them out a few at a time in order to keep things focused. With that, here’s the first collection of heuristics.
1. Go through some of the Blockchain 101 resources I’ve made.
I may be a bit biased, but I think I have one of the better “Guides To Crypto” for those on the left, even though it’s been a few years since I wrote it. (Though it seems I’m one of the only ones that has gone to this extent, besides outlets that are outright antagonistic). If you’re just starting out, it can be a helpful resource.
In case you didn’t know, I have an entire section of my website dedicated to Blockchain 101 content that includes a 3 part article series which was one of the first things I ever wrote for the blog, and a recording of a live stream I did in the Crypto Leftists discord a couple years ago. Also, in case you find that basic terminology in the crypto space is difficult to understand, I have a crypto glossary for leftists which can help make my other content more easily digestible.
2. The crypto world is filled with a lot of cringe like many permissionless systems where people stand to profit.
Pair this with a world that forces people to constantly think about the future, as new technologies and business practices constantly “disrupt” their lives while enriching those that invested in them and it becomes no surprise that many people – some you may know personally – are enticed by the financial aspects of the crypto narrative. If you could retire from the drudgeries of working life by putting some money on a tradeable dog meme token, wouldn’t you do it? More absurd things have happened in recent memory, however, few people are lucky enough to benefit from mooning meme tokens, many of which are intentionally made by outright scammers.
For those who are more involved beyond the speculative trading aspect of crypto, it can be frustrating to be constantly told to defend such a thing when you personally have nothing to do with it. Don’t feel obligated to acknowledge every scam out there. Being interested in the space does not legally require you to personally point out every potential scam at all times. Save your mental health. Crypto did not introduce scams. Capitalism itself is a scam that’s been fooling us for at least a couple centuries by now, most recently through Neoliberalism. (Although this ideology has started to show its cracks.)
3. Stay away from algorithmic stablecoins like the plague.
It’s very important to understand the differences between different types of stablecoins. A stablecoin is a cryptocurrency that maintains a non-volatile price by being pegged to a stable outside asset like the US dollar, a commodity like gold, a basket of assets, or even to another cryptocurrency. This is not only an extremely useful thing for traders to use so that they can move in and out of volatile positions, but for anyone who would want to use cryptocurrency without needing to worry about big changes in price relative to the underlying pegged asset. Stablecoins most commonly try to stay pegged to the US dollar. There are, however, a few different ways stablecoins are able to keep their peg.
The most common method used for stablecoins to work is through collateralization, in which either centralized bank-like institutions or decentralized smart contracts are used to hold crypto assets. This way, each token is backed by an asset that helps keep its desired peg. (Although this is hypothetical and unlikely in practice when it comes to centralized options,) The infamous Terra / Luna crash occurred largely because its stablecoin was not collateralized in any form – instead, it relied solely on algorithms and “economic incentives” in order to keep its peg. When put under extreme stress, Luna had nothing to fall back on, causing a run by investors to sell off the asset as fast as possible, thus de-pegging the token permanently. This issue does not exist in actual collateralized stablecoins to the same degree. In the future, algorithmic stablecoins will undoubtedly be used by scammers to print money by enticing users with high returns and fancy technical jargon. It is the holy grail of scamming in crypto. Just stay away from them.
4. Generally, the usual “tech left” criticisms of crypto are several months behind.
Often they are rediscoveries of already discussed issues or tensions. This is likely because the crypto space moves extremely fast, even for those who are used to keeping up with the usual tech news coming out of Silicon Valley. Jaromil – Marxist hacker and guest of the podcast – once described crypto as the “autopoiesis of complexity.” Being an intellectually honest and influential critic is not for the faint of heart, nor is it for those who can’t keep up with the brisk technical innovations and implementations seen within the space. This of course can add to the impression that it’s all a replay of the “move fast and break things” ethos from Silicon Valley, as untested technologies become responsible for significant amounts of capital. You can use that as a reason to be nihilistically critical or as an opportunity to be an influence in more constructive ways.
I think this largely stems from the fact that any explicitly left organization or institution is noticeably absent in active crypto discourse. In my view, constructive criticism and influence could be exerted by an organized left if it existed in this space. There is certainly value in being outside the crypto bubble, but by being on the inside we can exert more influence on the technical standards that get adopted or not – the same standards which will create the social relations the technology enables. It’s a more proactive position rather than a solely reactive one – which the tech left currently inhabits – in my view. To me it’s not a question of either / or but of how to do both effectively, and right now it’s just not happening.
5. If someone critiques web3 or DeFi and only mentions bitcoin, they don’t know what they’re talking about.
Often enough – surprisingly so – critics of the crypto world don’t criticize what they think they are criticizing. I cannot tell you the amount of papers or articles I’ve read written by a self-described progressive or left of center radical who over-confidently tries to expose the evils of DeFi without a single mention of smart contracts or Ethereum. Instead, they rely on tired criticisms of Bitcoin and the marketing around it, when, ironically, the most rabid Bitcoin maximalists also love to tear into DeFi to dunk on Ethereum.
From my vantage point, it’s a very strange thing to see supposedly radical leftists and far right bitcoiners making the same critique. Someone may say a broken clock is right twice a day, but to me, this is a lazy excuse to not look into the deeper things happening here. While their analyses can often be correct to a certain degree, (like how often pro-crypto or DeFi arguments can mimic those made for the disastrous microfinance movement in the past) there is often an intellectual laziness to them. They come off as a cheap repurposing of older arguments that do not fit one-to-one. DeFi is not the same as microfinance and, in fact, very few microfinance mechanisms have even been mimicked in actually existing DeFi.
The same can be said if the critic is talking about web3, like in the piece from Paris Marx which I previously responded to. In the piece he speaks of web3 yet only mentions Bitcoin. If he had been paying close attention to this space he would not have been surprised to see prominent bitcoiners like Jack Dorsey similarly criticize web3 and cheekily announce web5 as a more decentralized alternative using Bitcoin. For anyone involved, it was obvious at the time of Dorsey’s writing that web3 was nearly synonymous with what was going on in the Ethereum space.
Hopefully these heuristics will be constructive for you on your journey for making sense of this erratic space while reducing the frustrations you may feel when coming across mainstream crypto discourse. This is only a small fraction of the heuristics I like to apply, but in order to have space to briefly explain why I use a heuristic I’ll slowly write these out over time. At the moment I don’t know how frequently I’ll do it so let me know if this was helpful and maybe I’ll do the next one sooner than later.
Very big thank you to @MonolithBrah for helping edit this piece.
