For those that haven’t seen the video ‘Line Goes Up - The Problem with NFTs’ you should immediately stop reading this and go watch this nearly two hour documentary that masterfully deconstructs the crypto narrative and shines a very bright light on the dark side of the crypto bubble. This film is so important to the current discourse that it rises to the level of public service and probably deserves a YouTube equivalent of a Pulitzer Prize for the craftsmanship and research that went into making it.
With over five million views, this video has captured the public consciousness on this topic in a way that nothing else has ever done and has probably inspired a whole new generation of skeptics who now see crypto as based on ruinous heterodox economics, an affront to progressive values and an existential threat. I struggle with the uncomfortable fact that society is seemingly now relying on youtubers and tech bloggers to do public sensemaking on these issues, and so this article is my kind advice to upcoming authors and content creators about what I feel is effective communication on this massively important issue of our time.
The reason why it’s nearly impossible for the average lay person to deconstruct crypto propaganda is that the narrative is itself wrapped in a giant fractal of myth making of staggering complexity and spanning a dizzying number of domains. At every level you zoom in on it, the surface area to refute becomes inexorably larger and increasingly predicated on the political and philosophical rather than the concrete. To refute the myth on its terms requires a knowledge of macroeconomics, the history of finance, monetary policy, computer science, financial regulation and the political economy. The fact that Dan’s video even tries to deconstruct the massive edifice of intellectually heterodox gish gallop is truly impressive but it requires a superhuman level of research and dedication to even try to do what he did. For the average person trying to get to the bottom of crypto ideology would be like reading the Book from Neal Stephenson’s Anathem, a set of illogically annoying and intentionally incoherent ideas that are designed to make rational men go mad because the absurdity is the point.
However the edifice is ultimately just a distraction and/or a form of memetic defense mechanism, and it manifests as a very effective way of nerd sniping clever people who can see through the obvious sophistry of this technology-obscured multilevel market scheme and feel compelled to waste their time refuting the details of intentional absurdities. And this is why the topic is so difficult for journalists and public intellectuals to cover because they are stuck in the branches of the fractal trying to refute the details within the realm of reason when the base structure itself is transparently incoherent. The central idea of crypto is prima facie presented quite succinctly—to recreate the wildcat era of private money based on a new gold standard as a reactionary backlash to existing power structures. This is the central idea we need to refute, not the gritty details of consensus algorithms or why ownership of digital apes is ludicrous.
The crypto myth has a seductive ahistorical and anti-intellectual simplicity and resonates deeply with the zeitgeist because it is crystallized around a set of inescapable truths about the brute material reality young people feel about the financial system being rigged, because the system is undeniably rigged. It’s illuminating to read both Brink Lindsey’s The Captured Economy and Thomas Piketty’s Capital and see how they arrive at almost precisely the same diagnosis about wealth concentration yet from completely opposite sides of the political spectrum. There’s clearly a burning desperation to find an alternative system to the one we find ourselves in, and my fear is that the crypto bubble is the manifestation of a large mass of scared people running towards the perceived exit which creates the illusion that this “revolution” is working when it’s only leading them to inevitable ruin like lemmings off a cliff. The mechanism design of a synthetically scarce deflationary asset bubble is constructed to exasperate this illusion.
The social analyst Martin Gurri gave a particularly poignant description of the animus behind financial populism, he claims it is “a kind of vengeful nihilism, an urge to burn down the establishment without a clear sense of what’s supposed to replace it.” It’s the same dark psychology of black-pill fatalism synthesized with a strange resurgence in neometalist ideas and the notion that any financial system simply couldn’t be worse than the one we currently have. It is an ideology rooted just as much in desperation as it is in greed.
The whole edifice ultimately rests on an intellectually reductive and destructive faith in a technical deus ex machina the true believers think will save us from ourselves. Their ideology absolutely presents itself as a “high control group” that borrows memes from other quasi-religious movements and conspiracy cults. It’s a worldview that sees the state of human affairs as inherently unclean or corrupt and professes a path out of the corruption through accelerationism and by separating the world into an ingroup and an outgroup, where on the other side of an apocalyptic event (the collapse of the financial order) the ingroup will be given control of the promised utopian future. These kinds of ideologies tap into something very deep in the human psyche that have proven remarkably hard to extricate even if they come attached to intellectual absurdities. The sad and uncomfortable truth is that these kinds of belief systems—whether they be multi level marketing schemes, QAnon, flat earthism or bitcoin maximalism—are clearly speaking to a vacuum of community and meaning many young people experience as they try to navigate modernity.
What I fear the most is the runaway feedback loop of a phony populism manifesting itself through the financially disenfranchised YOLOing into deflationary assets that if left unchecked will lead a new form of digital feudalism and an express road to serfdom. Deflationary currencies have been some of the most socially corrosive financial systems we’ve tried throughout history and their implications are well-studied. Wrapping regressive ideas in new technology and populist rage is not progress.
Despite all the worrying and gnashing of teeth, the success of ‘Line Goes Up’ gives me a great deal of hope that we can use the new communication channels to speak to younger generations in a medium they understand and on their own terms. There’s clearly a hunger out there for more progressive crypto refutations and hopefully other content creators can rise to occasion and speak to the heart of this issue before we find ourselves on the back side of another financial crisis.