AFAIK are in-progress blog posts & notes on topics that I am learning about (that is, they are messy and more likely to be wrong than other blog posts). They will be updated as I learn more & my thoughts change. Please feel free to comment with corrections/thoughts/accolades/etc.
I wish I could avoid crypto altogether, but everyone keeps asking about it, and the loudest responses come from pro-crypto folks. This post is my personal foil helmet against crypto.
What people really want to know
1: Can I ignore crypto?
Yes! The world would be a better place if we all ignored crypto. Please close this tab now.
2: Will I regret not getting into crypto?
The answer to this is also YES! If you’re asking about crypto & don’t own any crypto, you probably already regret it a little bit. How can anyone not regret it, when everyone is talking about crypto like it’s the future and basically guaranteed easy cash, but only for those who get into it NOW. (That is, you will be left behind if you don’t start now. Which should make you question why we’re so excited about this future where only people with the mental & literal bandwidth to figure it out will have any money/power. (Which is maybe how one could describe investing in the traditional stock market but that is a different topic.))
Btw, you’re losing money as you read this blog post.
3: Will I regret getting into crypto right now?
I am not a financial advisor, but — can you afford to lose $2? Then you can afford to buy some crypto! Hurrah! You are now an early adopter and are now permitted to use crypto slang without feeling like a poser! (Alternately, you could also give that money to me, and I’ll probably donate it to the NRDC, and more importantly, it will help my ego.)
3: (For those who care about the environment)
Is it ok if I get into crypto even though I hear it’s like burning gas to have computers do sudoku?
Well… it’s ok, just like it’s ok that we wreck our atmosphere a little bit every time we use air conditioning, travel by plane, or light up a BBQ. You have to live right? And to live well, you need money, and sometimes there’s just this new type of money that needs a lot of energy to work. And sure, it’s not widely adopted yet, and no one is forcing us to use it (except in Ecuador), but how much is it emitting exactly? How much energy could it possibly be using? (A: More than Sweden.) Maybe we can just offset it like all the multinational corporations are doing? I’ve been using this same bamboo straw for like, years now.
Other Questions to Consider
Hopefully these will help you on your crypto-curious adventure!
- Have you ever regretted not playing the lottery? How many tickets do you regret not buying?
- Do you have regrets about not getting into other money-making trends, like flipping houses, selling leggings, hoarding Beanie Babies, learning how to code?
- Will future-you regret all the lattes you bought and all the Bitcoin you didn’t buy with that delicious latte money?
- CAN YOU LIVE WITH THAT REGRET?
Final question: Are you looking for specific information to make a decision or are you asking for permission to act? In either case, figure out what what it is you need to know or hear and what your criteria is for trusting the message. Otherwise, you’re just going to end up with at least 50 tabs about crypto, feel exasperated, and do whatever your default mode tells you to do and back it up with random things that you remember from your “research”.
Now on to actual crypto concepts… Here are some thoughts & notes based on conversations I’ve had with people who think about this stuff a lot more than me (thank you Green Web Foundation & CAT & friends & DH):
Digital has a real-world footprint
All digital tech has a footprint because it uses energy, there’s infrastructure + all of our devices. We’re just starting to talk about it, and it’s difficult to grasp. It’s even more difficult to talk about crypto’s footprint bc everyone will point to some other more efficient type of coin/process*. But in the real world, Bitcoin uses a lot of energy and even in NYC, they’re running a peaker plant 24-7 to mine.
(*If there are projections for ETH2 to be dominant & Bitcoin to go away like in the next 5 years, lmk.**)
(**to check out: https://www.blockchaincenter.net/flippening/)
What “problem” does crypto solve?
- About crypto being a currency — this article breaks down the functions of a currency (act as a unit of measure, a means of exchange, a store of value) and whether crypto does a good job at them. Spoiler: crypto isn’t that great at being a currency.
- About NFTs being trustworthy or trustless or whatever — they’re not that secure (also check out: moxie.org who did the thing that swapped all the images)
- About decentralized/distributed/etc being better. I’m not sure. You have to trust the people who wrote the code. Even if they had the best intentions — there are always bugs.
- Related: Did we have a problem with trusting bank logs in the first place? Has anyone had a problem with their bank statements or transactions?
- Isn’t this whole Layer 2 thing NOT decentralized?
- Transactions can get stuck if you don’t pay enough to get them processed? (Am I misunderstanding this? To check out: the queueing system — you can pay more to get your transactions processed first…)
- About blockchain being the answer. Again, I don’t know. Some things could probably just live in a regular database or json? I mean, banks work without blockchain! My understanding is that blockchain gets slower as there are more transactions & you have to pay transaction fees to cover the power consumption? Which is kind of funny, since one of crypto’s benefits is supposed to be not having to pay fees… maybe the fees are less. I don’t know.
- To check out – transaction fees: https://support.blockchain.com/hc/en-us/articles/360000939883-Explaining-bitcoin-transaction-fees & supply chain daily transaction data
- How that would work on the blockchain, like does it actually make sense to track EVERY SODA CAN (as some beverage company mentioned doing bc they could say circ economy & blockchain in the same sentence) — (1) is that possible (2) how does that increase recycling rates
- Proof-of-stake is still inefficient compared to regular transaction processing: https://www.coindesk.com/policy/2021/06/10/a-big-carbon-footprint-compared-to-what/
- Read this later — what is blockchain good for: https://www.coindesk.com/business/2020/12/21/public-blockchains-are-set-to-reshape-global-commerce-2020-was-the-start/
- About social good: Stocks are tied to businesses that presumably create some social good (like sneakers, beer, trains)… What does crypto do? Why do we need it?
What are the social & environmental costs?
- About energy use & emissions: GHG accounting, like regular accounting, is not pure math & science. You have to make a lot of judgement calls, there are a lot of estimates involved. Also like regular accounting, there are rules, frameworks, guidelines. There are people who think & work on this all day, every day. So. These blog posts & charts out there with CO2e & electricity use estimates — Are they written by people who are sustainability professionals? Or are they written by tech folks who have done a lot of research on GHG emissions? Ideally people from both groups would be involved, and the article would be reviewed by both types of experts.
- Trust your source. Things to consider: Does this person own crypto? Has this person done GHG accounting for anything else? Some standard GHG accounting practices include: defining the scope of what you’re calculating in a fair way & showing what emissions factors you’re using & where they came from.
- What is meaningful to you? It’s not natural to think of things in terms of GHG emissions. If you’ve read a few of these crypto emissions articles, you’ll see how we end up comparing transactions to flights to homes powered to countries. It’s really difficult. Has anyone ever said, “I will use Bitcoin if they can reduce their emissions level to half of Sweden’s?”
- Maybe it doesn’t matter because you think “The benefits of crypto are worth the cost if we can get on renewables.” Then you can find out if that is actually happening or if crypto is just using the cheapest available energy. Also consider when we might have enough renewable energy for everyone to live on. And if you think that crypto can help establish the renewable energy market… Are they? Is there no one else doing it already? Like local gov’ts & huge tech companies?
- Or maybe you think that “Crypto technology will get more efficient over time”, then ask, “What signs are there that crypto/blockchain is getting more efficient? What will happen when 50% of the world is using Ethereum?” (Lmk if you calculate this!)
- Proof-of-stake is better? It’s better than proof-of-work, but how does it compare to regular transactions? Also, there are problems with proof-of-stake, like centralization & security risks.
- About transparency & responsibility: Should we trust the creators of crypto?
- About risks & resiliency: What happens when electricity or the internet isn’t available? Extreme weather events are becoming more common. How will stores price gouge people for water & toilet paper if we’ve all been forced to switch to crypto like Ecuador?
Who is benefiting & who is left out?
Yes, “regular” people have made a lot of money. But we’re in a land-grab period… so once the price is high enough, everyone will be locked out & we’ll just have some new rich people who will have more power, like usual (to research: demographics, some notes below). In the case of crypto & transaction fees, they may have the ability to cut in line and get their transaction processed first.
Reading this intro to buying crypto is like… I have to learn another language:
Arguably, this kind of like stocks & traditional finance again. But just because our system has a high level of economic injustice, doesn’t mean we should participate in (and help create) a new system of injustice that’s even less regulated. One could argue that less regulations = more fair, but no regulations leads to what’s happening now — which is people hyping up things to drive up the price for their own gain.
What is real anymore?
- Social constructs like time & money
- Prisoner’s dilemma… if we all agreed that this is a pyramid scheme & not what the world needs right now, it would go away, and 99.9% of us WOULD NOT BE MISSING OUT
- About hype: https://johannesklingebiel.de/2022/01/12/hype-as-a-scale.html
In summary, my recommendation is:
|Demographic||Stock owners||Crypto owners|
|# of owners||56% of Americans||300 million, 27 million US|
|Gender||60% men, 53% women||79% men, 21% women|
|Age||58% are aged under 34|
|Education||82% have a Bachelor’s degree or higher|
|Income||36% have an annual income over US$100k|
|Source: Gallup||Source: Triple-A.io, accessed 1/26/22 |
…. need to cross check
|1/26/22||Adapted from Slack convo that no one replied to + a lot of rambling. Maybe I will never have to think about crypto again.|
|1/28/22||Added stuff about energy/ghg emissions & more links bc someone replied on Slack with a link to a Business Insider article on proof-of-stake. Also included HB’s question “Can I ignore crypto?” & DH’s answer.|