My neighbour made a bad face when I mentioned I'm a lawyer who advises crypto businesses (and sometimes combats criminals on the civil side). He said he'd met a lot of "those people" in Bali, Indonesia. But he didn't, becuase they're not the same people as the ones I work for and the people who genuinely are making new things. This is a constant problem with the big label of crypto. That's why some businesses turned to the label "blockchain" many years ago. Unfortunately, it's like saying you work in "email", in a world without spam filters, and where journalists write articles treating everything sent by email as "email". If that was the case, we'd all have a negative view of "email" despite its utility. This is not to say they're the same, but rather that with a big enough label it'll include a lot of bad things amongst the good. More fundamentally, the bad stuff has big budgets for ads/marketing, so the good stuff isn't seen.

National Post Article

For the last week, the National Post has been featuring an article about a former TV actor's crusade against digital currencies. This article explains what a nuanced version of this would look like. I'm sympathetic to Ben McKenzie's crusade against crypto because there are certainly a lot of fraudsters pretending to be legitimate people. They've even been impersonating me! To the extent his crusade is aimed in that direciton, I would encourage that and have volunteered a lot of time to this end. But that's not what the media is telling people.

Crypto Is Bitcoin Core, Ethers & Thousands Of Volunteer Developers

Cryptocurrency started off with free software that anyone can run, to do whatever they'd like with. And that still exists! It's the Bitcoin Core library. And there's plenty of other volunteers making great software, available for free, so that people can build interesting things. For example, there's a Canadian developer named Richard Moore who maintains the Ethers library, for free, and without any token (as he states at the top) or money-making of any kind. Richard Moore has no spokesperson and he didn't buy the naming rights to a stadium like FTX. There are countless people out there like Richard who are focused on building great software. This is the roots of cryptocurrency, and it still exists. But it's never covered in the news.

Crypto Is Scams Too

There's also a lot of scams. This summer, I received many emails from people (and one angry phone call from a confused victim) asking if I was associated with scammers who were pretending to be working for me. Unfortunately it's incredibly difficult to stop these people, and the police would be necessary to really stop these criminals. But the police are overwhelmed and find it challenging to stop overseas criminals. Then there's the Sam Bankman-Fried's of the world (currently in jail in the US) who have built multibillion dollar empires on false promises, fake accounting, and, ultimately, huge losses. These people are all under the banner of crypto. But they're not at all the same as the people who build great software.

Ben McKenzie's Crusade: The Article's Targets

FTX and Celsius were large-scale frauds that cost people billions, so it's unsurprising that the National Post article would lead with this. OTPP and CDPQ stopped investing in the industry entirely after being burned by FTX. CDPQ, a Quebec pension fund, lost around $200m by investing in FTX. But why did the pension funds put their money into a foreign company with no independent board, no audited financials, and a founder known for drug use? Is that a crypto problem or a due diligence problem? Pension funds subject Canadian companies to enormous scrutiny, and yet they took a flyer on this one because other big investors were piling in. More importantly: FTX was not a cryptocurrency itself. It was an exchange. There were regulated Canadian/American exchanges that could have been investment targets, but they were passed over in favour of the more world-changing FTX. FTX had bigger promises, and the pension funds wanted bigger returns. That, in a nutshell, is why so many smart people have put money into bad/fraudulent businesses instead of the good ones that didn't promise the sun and the moon.

Ben switches between talking about companies, like exchanges, the underlying protocols like Bitcoin: "The Bitcoin people will say the solution to this flawed system is crypto, which they claim is a more democratic, more decentralized form of currency." But they're totally different things. More importantly, whoever the "Bitcoin people" are, that's just one view on things. Bitcoin.org, the distributor of the Bitcoin Core bitcoin client focuses on it being an "innovative payment network" rather than a solution to all of society's ills. Ben's mostly complaining about loud influencers who promise things they don't know about (and also Matt Damon, who he complains shilled for Crypto.com).

Is Cryptocurrency To Blame For Gambling?

Ben's absolutely right to point out that many people are buying cryptocurrency to gamble, and this is particularly a problem with men. Sports gambling, crypto gambling, and options gambling are all forces that are causing enormous misery for many people. And yet, people who buy bitcoin have generally, since it started, been the beneficiaries of appreciating assets, whereas sports gambling and options gambling all lead to very large losses for almost everyone who does it. Gambling is not goood, but at least where it's focused on buying and holding bitcoin that's actually been not so devastating for families as other forms of gambling. Gambling is not a phenomenon that was created by cryptocurrency, and it's probably not been particularly worsened by the rise of Bitcoin and Ethereum.

Tokens vs. Cryptocurrencies

BTC and ETH have held value very well for a decade. Most tokens have not. Ben switches between talking about tokens like those issued by Celsius (a large-scale fraud that I've written extensively about) and bitcoin:

And in the case of crypto, they put so much trust in a fictitious currency. It’s more painful to admit that it was all an illusion, and they are clinging to that belief.

But Bitcoin is not an illusion. It's a real thing, and it's fully decentralized. The Celsius token was the creation of a company who's founder went to jail for crime. These are not the same thing.

That said, he does have a point when he says that:

This stuff is fundamentally zero sum. Someone wins and someone else has to lose. The house is going to win every time.

Bitcoin is definitely zero sum in terms of its value, because there is no underlying business. That doesn't mean it can't increase in value due to new uses for it (which has happened). Being "zero sum" isn't always a bad thing, and the creator(s) of Bitcoin certainly wanted it to be that. The concept was to create markers that could be moved around digitally without copying - and it worked! It's not really a good criticism of a type of money-like thing to say that it's zero sum, because we don't expect money to be like that. I don't expect Canadian Dollars to increase in value or benefit from anything that Canada does, or its people. In fact, I expect Canadian Dollars to decrease in value, because the government's policy is to do that (and factually does do that.)

The Overall Tone: Conflation

While I think Ben has a good understanding of the subject matter, the problems, and some of the positives, the National Post's piece gives a decidely negative and flattened version of the issues. Writing an article that says crypto is a scam and harms people is going to get a lot more attention than a piece that explains that the people doing these things are different people. Everyone who doesn't know about cryptocurrenncy wants there to be an "industry" - they want it to be simple. They want it to be people on a team, so that the reader can understand the team's view. But there is no team. There's millions of people out there doing things. Unfortunately, the vast majority of people in the world have no idea how to build great software like Richard Moore, and there's a lot of people who are unprincipled and unscrupulous. There's even a lot of criminals. Ben laments the use of crypto for crime, but we should all lament how big crime is in general. Stopping crime is praiseworthy, necessary, and underappreciated.

The more journalists stop treating people like Sam Bankman-Fried as avatars of "crypto", and start focusing on the many volunteer devs and small companies doing great work, the more people can stop focusing on the gambling side of things and start thinking about the interesting technical sides of it. The tremendous focus on negatives makes it hard for people to do the right thing because they have to fight a media that is uninterested, a public that's heard the wrong messages, and campaigners like Ben who have their heart in the right place.

It's hard to write with nuance. Some of my own blog posts, and certainly social media posts, fail to do this, becuase it's just too complicated! People don't want to read nuance, and especially in the age of LLMs and video reels they're not going to. I get it. But a bit more nuance would do a lot of good, and help people to see if there's anything of value rather than dismissing things out of hand. For example, tens of billions a day in stablecoins are changing hands, with companies like Visa, Stripe and other large players investing billions of their own capital into building the infrastructure. If Canadian pension funds are missing out on that because of articles like this in the National Post, and if investors are scared off, then someone else will reap the benefits. Because no matter what is in the news, smart people are always building things, and cryptocurrency has a larger and larger economic role with each passing year. That's the story that's worth running.

Yes, the title of this post feeds into the same problem as I'm complaining about. Using terms like "crypto" elides the complexities and the hundreds of different types of actors in a complex ecosystem. But I never use the term to refer to the criminals who take advantage of the hard work of volunteer developers and entrepreneurs. The hardworking honest people of crypto are the victims when the bad guys use their names, whether that's running fraudulent exchanges or impersonating my law practice to scam people. The criminals are not a part of crypto. Exchanges are just one part of crypto. Stablecoins are another part. And so on. Maybe the term "crypto" is irredeemably damaged by negative associations and we'll have to wait for new words to emerge for the parts that are hard for crooks to glom onto, but that's very difficult to do in a digital world. Maybe increased law enforcement attention will help put a stop to the bad guys, who currently act mostly with impunity. Maybe more due diligence by investors will help weed out the fraudulent businesses. Most likely it'll be a lot of these things put together, but a better understanding is not going to happen with National Post articles like this one.