Real talk on crypto

 July 15, 2022

You may have noticed that the price of bitcoin and that of cryptocurrency stocks fell dramatically in recent weeks. And if you have had the delight of being friends with a trendy friend in the past year, you may have heard about the sincerest "ew" they have directed toward the "crypto bros" – that subculture obsessed with making money on these "novel crypto coins."

This is not the most pleasant subculture that exists right now. But none of this explains why the crypto stocks took a tumble in recent weeks.

Bitcoin was pretty close to a peak about a month ago in early June. It had taken a bit of a slowdown exerted on crypto stocks due to the legal showdown in Florida between two people both claiming to be Satoshi Nakamoto, the anonymous inventor of bitcoin. But, even taking into account the slowness of the legal system in responding to those kinds of developments, that doesn't explain the June 15, 2022 market crash either.

I want to be very careful here about attributing cause-and-effect to market actions. What I'm pointing to here is something that did happen, but I'm not saying it was the cause for what happened afterwards.

A quick note about crypto and bitcoin. Bitcoin, when invented, brought both bitcoin the cryptocurrency, and blockchain the automated ledger technology, into the public view. Bitcoin caught on pretty fast, and it spawned a lot of less-well-run copycats which are sometimes called "novel" cryptocurrencies. (Note: I have invested in a nominal amount of bitcoin, for some time.) Blockchain also caught on pretty fast, and there's all kinds of Blockchain-based applications out there, mostly NFT's, which are artworks hosted on a blockchain. Some even more useful applications, however, have lost steam, including a good idea (Po.et) that would have created a ledger for making a public record for ownership of written works. Some writers are sardonically commenting on the nonsensical operation of this amateur Blockchain space full-time, but this is a quick comment on one interesting event that happened in the crypto space.

I also wanted to note that this is not an attack on "crypto bros" by the way. They are annoying, they are a mess, they are also kind of cute, even as they are a complete scourge on the maturity of the 'net. There are no shortcuts though, and they should really keep in mind that something to be taken seriously in the crypto space will have to be honestly creative, and not a bitcoin knock-off or an NFT of some clipart.

But that said, I want to point to a strange blip that did happen in that "space" recently. Someone claiming to be a whistleblower who had obtained records of secret telegram chats among "crypto influencers" promised to release those chats that he claimed had evidence of all kinds of wrongdoing among them. None of them appear to have been acknowledged by anyone else in the crypto space. But the week was promised to be released on June 15, the same day that it turns out, the crypto markets crashed, actually. Crypto was all over the headlines, but it still appears that as yet, no one has identified any of the real problems indicated by the leader, to be in the leaked files. However, no one reporting on it seems to have actually downloaded the torrent link and looked through the files either. The account of the alleged leaker posted on June 15 took basically all of it back: there were no orgies, no assassinations, no Twitter censorship, no sexual assault, and no theft of crypto. So he made it up for attention, as he even said he did. He appears to be mentally ill or a very sick prankster. Whether he was really terminally ill, as he claimed, is not verifiable.

But one thing his retraction did not retract was the original claim that crypto influencers were engaged "rug-pulls "– that is, raising and lowering confidence in various currencies in order to profit off the crash of those markets. In some cases these are people who have large stakes in those markets crashing them, to short them, basically, continuously.. We can't say whether they are coordinating with each other to organize these rug-pulls – but that hasn't been denied in the retraction from this presumed whistleblower, who denied and retracted everything else he promised in his nearly-immediate retraction.

And do notice now, that this promised leak, even if it had nothing to it in fact, actually did orchestrate a rug-pull on the crypto markets on June 15, the same day the initial phase of the leak was promised.

I do have some bitcoin, as mentioned, and I basically plan on keeping it for the long haul. Mostly because it's an indication of my confidence in the continued development of computing power – that's what I see as the underlying market good that bitcoin relates to. I do wish it could operate more cleanly with respect to energy consumption, and the novel coins that need to check some of their bad faith market manipulations. But as a general point, notice that this event did happen; it caused a rug-pull in a sense, which was exactly what it warned against, which is perhaps a paradox, but only one that could have existed if the crypto market was as much of a Wild West as it is.