How I Finally Understood Crypto (Thru Animal Farm)

Money printer go brrrrr

Crypto is just the idea that 'hey, if those fuckers can make up money, so can we.' That's all it is. It's a new set of elites minting coins. Instead of being backed by guns, they're backed by computers. Does this solve any of the climate-destroying problems of capitalism? No. It's just new people getting in on the scam.

Crypto challenges the government monopoly of money in the same way that 'terrorism' challenges the government monopoly of violence. It's certainly spectacular, but you can't say it's good.

For decades the US government has just made-up money and given it to their friends at Goldman Sachs and JP Morgan. These bankers give it to other rich people who hoard it or launder it into stuff like art. It's all a grand scam, picking the bones of a capitalist order that should have died in 2008.

Now instead of a government, Shiba Inu Coin just makes-up money, gives a bit to Elon Musk, and he tweets it up for other people to hoard. They also launder it into digital art (as NFTs). This is pitched as some world-changing revolution in money, but it's just world-rearranging. It's deck chairs on the capitalist Titanic.

Animal Farm

If there's an allegory for crypto it's George Orwell's Animal Farm. In that book, the farm animals overthrow the tyranny of Farmer Jones, only for the pigs and dogs to become tyrants themselves.  

Here Farmer Jones is the evil Central Banks, and the pigs are crypto-bros. Crypto is pitched as a rebellion against Central Banks that inflate financial assets for rich people (which they do), but it's just become a way for different elites to inflate their own assets without a Central Bank. Hence it ends as Animal Farm ended, with the humans and pigs sitting around the table, as "The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which."

Animal Farm actually described the basic logic of crypto quite literally in 1944:

How does any of this produce value? Who knows? Who gives a fuck? As long as the 'animal spirits' of the market believe in it, it's real. Writing things on paper and burning them in a furnace is a pretty good description of crypto. Crypto just getting computers to solve ever-harder cryptographic puzzles while consuming ever-more energy. The puzzles themselves are discarded.

What are crypto-bros, founders, and hangers-on doing to produce anything? We're all too ignorant to understand. But there are increasingly 'many of them, and their appetites are always good'.