Why I've lost my sympathy for cryptocurrencies

So I have a lot of sympathy for the concept of decentralized finance. The simplest way to summarize my politics is "anarchist" and people coming together to find ways to organize and exchange resources outside of a government issued currency, as supported by the private financial sector's special status for capitalist states, has a lot of appeal to me.

Hell, it has a pretty good historic precedent, like with the Irish bank strikes in the 70s!

This means that I've always had conflicted feelings about cryptocurrencies since the beginning. Bitcoin, from its start, rubbed me the wrong way because of the intentionally limited lifetime supply and proof of work system that rewarded early adopters and made transactions less feasible as the system grew more popular. Pretty much every currency since then has similar problems in one way or another. I'd been holding out hope, though, that there could be a currency that would be useful for helping to stop things like the censoring of sex workers by credit card processors.

I think that hope was naive.

Now to be clear I'm not telling you, dear reader, to stop working on some actually liberatory cryptocurrency tech if that's what you're trying to do. I would very much like to be wrong.

But what I worry is that this all comes down to the old adage that "you can't solve a social problem with a technical solution". The idea of a cryptocurrency is that it's a trustless system. I'm not sure if I see a point to trustless systems anymore because the hard part of creating an extra-governmental system that people can use is the community building. I was thinking about this, in part, because of the recent OpenSea "hack" where people lost a bunch of their assets and are now suing in order to get compensated for their losses. I say "hack" because, of course, if we take code-is-law seriously then everything that happened was completely legitimate. People agreed to smart contracts that meant they would be giving over all of their assets. If they didn't mean to do that, too bad for them, they should be more careful and thoughtful.

That sounds callous, right? I mean even if it's over a bunch of, let's be real, completely worthless pointers to jpgs on the internet it's cruel to act like tricking someone into an agreement they didn't intend to enter is their own fault.

But that's what "trustless" implies! The only way a system can truly be trustless is if there's no community accountability, no recourse, no way to actually handle conflict. But doing all of that? That's the actual hard work, the important work! That's the work that means we'd be capable of actually effectively organizing.

Basically, I've come to the conclusion that trustless systems only work if you're thinking very small scale: on the level of an individual who wants to make financial deals without interference. And I'm not saying that's meaningless but I do think it's really limited in scope.

Now, I know the counterargument might be "but what about DAOs?" and, well, what about them? I haven't actually read of a story of a DAO that managed to succesfully encode anything useful in their smart contracts that lets them operate as trustless organizations. Hell, the original DAO was such a mess it literally caused a schism in Ethereum itself. Again, that's not trustless! If the only way to resolve conflicts and bad faith actions is to just disagree about the state of the world that's not feasible for community building. The only reason why the hard fork of Ethereum could happen is because a lot of big players on the scene stood to lose an incredible amount of money.

So, yes, I think I've reached a point where I'm feeling very pessmisstic about any attempt to actually build trustless systems and that's why I've lost my sympathy for cryptocurrency projects.

As always, if you want to get in touch with me please feel free to

at my left_adjoint@rawtext.club address