Financial Times article screenshot

It's been around ten years since Bitcoin got going and Ethereum started. It's been long enough that people shouldn't be seeing articles and pundits commenting on how bad the crypto community is. This comes up regularly with the ongoing criminal trials of SBF and his associates from FTX (e.g. this article in the Financial Times). These articles always put forward the idea that cryptocurrency somehow has a single community of people who are both behind it, in charge of it, and evangelizing it. Nothing could be further from the truth.

There Is No Crypto Community

In the same way as there's no email community, war community, gambling community, or drug community - there is no crypto community that has a singular operation. Just like Pfizer and GlaxoSmithKline have nothing to do with street-level drug dealers or heroin growers in Afghanistan. Email spammers have nothing to do with Gmail or your Microsoft Exchange email account at work. North Korea's military has nothing to do with UN peacekeeping operations, except to the extent that they both use weapons. No credible journalist would ever report on these topics like this, but they freely do so when discussing cryptocurrency topics.

Who Is To Blame?

The Bitcoin Core developers are unpaid and hardly known to journalists. They work hard to keep updating Bitcoin and occassionally they try to push back against the narrative of frauds and scams, but there's only so much they can do. There's very little ability for the legitimate people to reach a mass audience. Bitcoin Core developers can't spend hundreds of millions on ads (like almost every fraud scheme), donations to politicians (like FTX), or marketing operations. They're outgunned by the grifters and the people pushing technology with unproven claims (that almost always don't pan out.) The people who are least blameworthy are the people who go to work every day and try to make better technology or build better services for the public.

The people to blame are the criminals or pseudo-criminals who hijack the hard work of law-abiding software developers. Fraudsters only succeed because of the reputation built by people who made legitimate technology that is amazing, like Ethereum and Bitcoin. But unfortunately, they have much bigger marketing budgets because legitimate software in the cryptocurrency space is almost always free to use. Fraudsters, having nearly 100% profit margins can happily spend money on ads and marketing because every dollar they take in is stolen. And then journalists end up confusing these very loud people with the very quiet people who are actually building technologies.

The Legitimate Players

Journalists never cover the people who contribute to the core technologies of cryptocurrency. These people make open source software that's free for everyone and they don't ask for a dime.

Journalists don't cover the legitimate cryptocurrency dealers who have built out impressive trading operations with very low fees (much lower than say, mutual funds, or gold dealers). These companies have taken on the hard work of building secure platforms with robust anti-money laundering programs that can satisfy the demands of their banking partners - no small feat given the bad blood created by the fraudsters.

Journalists don't cover the validator services on proof-of-stake networks like Ethereum and rarely explain what the publicly-traded cryptocurrency mining firms do for the public (they're a bit like the armoured cars and guards of the traditional banking system, but for technical security of Bitcoin). These companies are straightforward, honest operations that don't provide much controversy to report on (except perhaps their environmental impact, a subject that's rarely brought up for the far more destructive industries that make up the economy - journalists will take their controversy where they can get it!).

Journalists don't cover the academics who produce new mathematics and cryptography systems that are incorporated into Ethereum, ZCash, and other systems. These topics are complicated and math profs don't make for sensational stories.

There's countless people who help the public to buy, sell, and use these new technologies. They do for low fees because of the competitive nature of their business, and there's not much that can be reported on in terms of controversy because they work very hard to make sure there isn't any.

The Grifters

Grifters are loud, they're online, and they have fooled millions of people into parting with their money. They are the parasites that suck money out of the hands of the unwitting public, and each time they do so they also burn a bit more of the reputation and goodwill built by the people who have made the modern cryptocurrency field. The most respected news brands in the world happily report on criminal schemes as being somehow related to the development of cryptocurrency. In fact, the Bitcoin Core developers aren't paid at all, and many of them are not very well-off people. They essentially offer a charitable service, like countless other open source software developers. It costs $0 to download a bitcoin wallet. It costs $0 to download the Bitcoin Core node software (or Ethereum, or other blockchain networks).

The Financial Times published an article a couple weeks ago that notes that:

The idea that a shop such as FTX — and crypto businesses in general — could be an improvement on the existing financial system only makes sense if we are to value that system simply on the basis of how much money is being creamed off at the top.

But there is no entrepreneur who starts a business in crypto with the intention of doing this. That's what scammers do. That's what many in the financial industry do. But it's not what's done by the legitimate players in cryptocurrency. It's not even possible! If you're a cryptocurrency dealer, you recognize that you exist within a highly competitive market where fees are in the realm of 0.25% to 1% per transaction. There's no ability to start a dealer that charges far higher fees than this (for the same service). The only way to make money is to lower costs and build volume. Similarly, there's no possibility of starting a cryptocurrency mining operation that is designed to take far more money than other miners - that business simply would fail. The only possibility is lowering the operational costs through a ruthless focus on efficiency. And for the cryptocurrencies themselves, they're all free to use! There's no major cryptocurrency network that costs money to run the software. It's available for free to download. And it's even available to be downloaded and improved upon because it's open source software. The same cannot be said of virtually anything in the financial industry that journalists draw a comparison to.

The grifters draw a lot of attention because it's sensational. They're also a real problem. But they're not a problem created by the hard-working honest people. They're a problem created by lax policing, a lack of skepticism, and platforms like Facebook, Google, and Instagram allowing frauds and scams to be advertised widely. I receive many calls from victims of scams in the $100,000 to $1,000,000 range, and most of these people learned of the scam through an ad online. There's similar problems with counterfeit drugs, gambling scams, and so much more, but it's a problem that's uniquely pinned on the legitimate companies and people in the crypto space.

In short, there is no crypto community - there never has been. There are certainly communities within the field of cryptocurrency, but there's no monolith. And to the extent there's any community of the honest hard-workers, their opinion has unanimously been against the fraudsters and scammers who feed of their reputation. Yet their calls for people to reject the scammers and step up enforcement fall on deaf ears. No one is listening to what the developers of Bitcoin, Ethereum, and other blockchain networks have to say. The Ethereum Foundation hasn't donated millions to American elections like FTX did.

Where Do We Go From Here?

I've spoken to many groups in Canada that had an interest in forming a trade assocition or some other type of industry body to represent the interests of legitimate companies in the crypto space in Canada. The most successful current effort is probably the Canadian Web3 Council. But many other efforts have been put forward over the years, and all of them have failed because there wasn't enough unanimity between the member companies. The crypto sector is just too diverse. Even just the dealers and other trading outfits don't cooperate or agree enough to be able to form a monolithic trade association like other Canadian industries.

Journalists can do their part by not stooping to lazy lines in stories. They can stop blaming hard-working software developers for the dishonest actions of others. They can ask to see the code. They can ask to know who will vouch for them. They can ask about their audits, founders' backgrounds, and who their lawyers are. Do they attend industry events? What do people say about them? These are obviously hard to report on, and require journalists to do more work. So if they don't want to do any of this then the easiest thing to do is to simply stop treating every one of the millions of participants in the entire global cryptocurrency field (whether software developers or billion dollar companies) as if they're a part of a single organization. It's a single step that can be taken that will improve the quality of the reporting on what's happening with cryptocurrency. The thieves and grifters of the space ought to be separated from those who they try to pretend to be. There just is no single crypto community. It's bad journalism to claim otherwise.