What a 2022 it has been! But I think it’s about time we move on. I, for one, am very much looking forward to the comfort the new year will bring (at least psychologically).
Because we’re very much in the throes of the holiday season, this week’s Crypto Long & Short will be more lighthearted and fun than usual (I hope). With that, let’s reminisce about all the things that got on my nerves in crypto in 2022.
Also, keep an eye out for CoinDesk Research’s 2022 Annual Crypto Review, which will be published in early January.
‘Til next year … stay safe, healthy and warm out there.
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Five Crypto Things That Riled Me Up in 2022
Enclosed are just five of the crypto-related things that got under my skin in 2022. There were far more than five, but obvious things like “the market went down” are not included because they’re not fun to write about.
My brain is raising at least two pitchforks for the folks at crypto hedge fund Three Arrows Capital (3AC). It’s one thing to be a little annoyed with highly leveraged hedge funds (like 3AC) doing risky things in general; it’s another to be annoyed at the associated flexing (i.e., “showing off”) that took place on social media and elsewhere as highly leveraged hedge funds raked in the cash the last few years.
But it was revealed during liquidation proceedings that 3AC co-founders Kyle Davies and Su Zhu paid for a $50 million superyacht with company funds all while flexing that “100K ETH is dust.” Calling 100,000 ether “dust” was calling $400 million “not a lot of money.” 3AC collapsed. Also, the superyacht was named: “Much Wow.”
Yeah, I know.
Much cringe.
3. Parts of Bitcoin maximalism
I think that Bitcoin maximalism, the idea that bitcoin is the only cryptocurrency that matters, is fine. Many smart people that I like and respect disagree with me because of the toxic culture it nurtures, but our disagreement isn’t what annoyed me in 2022. What annoyed me is the absolutist language used by maximalism’s adherents. If you don’t understand that you still could be wrong about Bitcoin, then you’re just role-playing as a savior.
Also Bitcoin doesn’t have to be “alive”, as former MicroStrategy CEO Michael Saylor put it on Twitter. Those who tweet that “Bitcoin is [some random adjective]” are just saying stuff for the sake of saying it. It doesn’t make any sense or mean anything at all. And who cares if ether is a security or not? My take is that Bitcoin maximalism would probably be better served if it lived by the adage: “Bitcoin is. And that is enough.”
4. Overselling the current state of crypto developments
Two weeks ago I complained about Goldman Sachs (GS) co-opting “blockchain” as a buzzword and using it to sell the merits for private blockchain bond issuance. So I’m mad at GS (nothing new here) for selling snake oil.
But I’m also mad at effectively centralized chains, such as Binance Smart Chain, for selling snake oil by acting as if they are broadly decentralized. And at the “Ethereum is ultra-sound money” crowd. And at Decentraland users who are angry at journalists for reporting user numbers. And at bitcoiners overstating the impact of Taro as a monumental development when nothing has been delivered to market yet.
I’m not mad because I think any of these people are wrong. Yes, maybe one day Decentraland will have more than 810 daily active users and maybe one day Taro will bring stablecoins to the masses via Bitcoin’s Lightning Network. But for now, they aren’t. It’s fine to be excited, but I believe that if we want crypto to be taken seriously at all (which I do), then we’d be better served if we stopped overselling how healthy and vibrant the ecosystem is today.
5. Privacy deniers, haters and destroyers
I tweeted earlier this year that this was the “year for privacy.” I don’t think I was correct thematically, but I do want to give more airtime to the importance of privacy as we close out the year.
Privacy is a human right and it should be normalized. So it’s probably unsurprising that privacy deniers also irked me in 2022. We don’t have to look far to see the most recent infringement that had a crypto wrapping on it given U.S. Senator Elizabeth Warren’s recently proposed Digital Asset Anti-Money Laundering Act, which is less focused on stopping money laundering than it is on infringing on privacy.
The shortest version of why I think privacy is important goes like this: You don’t need privacy until the exact moment that you do. And if your retort is that it is only criminals who need privacy, do remember that you are not a criminal until the moment that you are.
So to you, privacy deniers, fraudsters and the like, let’s leave all the stuff I don’t like in 2022.
