Badgechain newsletter #15 – Cryptocurrency: unchecked, unregulated, un-understood

November 9th, 2017 | Carla Casilli

$7000. Bitcoin. Unprecedented. Unparalleled. Unimaginable. Fascinatingly, or perhaps terrifyingly, software professionals are not merely shaking their head at this valuation but at the construct of cryptocurrency itself.

I turned to Twitter to get a read on this recent development and it did not disappoint. @helenhousandi tweeted, “Kinda blows my mind that people who work on software and know it’s basically all duct taped together are willing to have software currency.”

Hooo boy, now that’s a conversation starter, right?

@BillStewart5 responded, “Most of the new software currencies are intended for sale to people who don’t understand that.” So, professional software folks believe that stooges are the primary cryptocurrency audience? Not a ringing endorsement. Still, @Rabbyte pushes back on this overwhelmingly pessimistic view with two tweets that reframe what cryptocurrency might be, “I don’t consider it currency anymore than I consider a webpage to be paper. 💁💸” She follows that up with, “it’s a metaphor that builds a sandbox for solving security issues to get to the next thing.” This seems like both logical and plausible reasoning. Maybe we’re just too locked into the idea of currency as something we know and understand. And yet…

There are legitimate big picture concerns: our current financial system relies on a strong but not always obvious social contract. @floatingatoll warns, “Not one I know pays taxes on the income earned, and they laugh at my concern that tax-dodging isn’t really a solid long-term plan.” And listen to @rnewman’s cryptocurrency issue, “I recently turned down a job in part because the implications of cryptocurrency comp (!) weren’t well thought through. #whatafuture”

This sort of conversation—where professionals who build software openly comment on the dependability of a world where software is currency—isn’t really happening anywhere in long form journalism, at least not with anywhere near the bite that it’s happening on Twitter. And it’s not just tech-savvy folks, but folks interested in the structure of our society. We have a long way to go if this is to be our future.

On the plus side, people are trying to make cryptocurrencies work. On the minus side, those cryptocurrencies appear to be drunkenly wandering back and forth across the line of sheer madness and dependable, social usefulness. So, while their valuations may be going through the roof, chances are folks are gonna feel perfectly fine when the sheer madness valuation bubble finally bursts. @evansolomon’s destabilizing warning, “The software is probably the least insane part of crypto” dovetails beautifully with @ipstenu’s, “Unchecked, unregulated, un-understood. That’s our universe!”

Maybe the software builders know a thing or two.

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Here are the Twitter links that inspired and informed this newsletter. We recommend them to you as interesting data points in your consideration of decentralized technologies, blockchain, and its impacts on finance and society.