Crypto-Education

I have put off trying to educate myself about cryptocurrency, but finally gave in, read a book, and golly bob howdy, if it isn't the same guys, the same grift, and the same bullshit as education privatization.

The book was Easy Money: Cryptocurrencym Casino Capitalism, and the Golden Age of Fraud, written by Ben McKenzie and Jacob Silverman, and if McKenzie's name sounds vaguely familiar, that's because you used to watch The OC on which he played Ryan. But before he was an actor, McKenzie graduated from the University of Virginia magna cum laude with a degree in economics and foreign affairs. Silverman is a journalist who covers tech, crypto and politics.

The book is tied together by the narrative of McKenzie's growing interest and his concurrent growing sense that crypto was an emperor with no clothes, a burning building for which nobody was pulling the alarm. It's clear, compelling, and easy to understand even for those of us with no economics background.

It is also, if you've been deep in the education debates, oddly familiar, sometimes in ways that I found illuminating. Familiar themes include--

Techbro awesomeness

The techbros driving the movement are absolutely certain that they Know How It Is, that they possess all the wisdom and know-how to engineer a complete replacement for the system already in place. People who stick up for that system are just showing that they aren't as smart as the bros. See also: Bill Gates on education.

Ignorance of the past.

If you're smarter than everyone, you don't have to listen to anyone, including people who know the history of the field you want to disrupt. The techbros driving the movement are sure they are pioneering bold new uncharted territory. "Behold! I have invented a new piece of technology! I shall call it [drum roll] The Wheel!!"

But as the authors point out, the idea of launching a "decentralized" currency backed by nothing but charm and big brass balls has been tried in this country back in the mid-19th century. Spoiler alert: it did not work. See also: Mr. Lancaster's System by Adam Laats.

Frauds and scamsters

McKenzie and Silverman mention several times that having been scammed is seen as a regular and normal part of the crypto landscape. It is so pervasive that most of the folks they talked to freely talked about their own losses as if being scammed was a rite of passage. The underlying assumption-- that scammers and fraudsters are just part of the price of "freedom" and that it's up to the marketplace to do their homework and avoid getting fleeced. Fraud is how we know we're really free, I guess. See also: complaints that school choice must not be hampered by regulation or oversight.

Lies about Decentralization and Power

Crypto is supposed to do away with the idea of money controlled by some central authority-- "government money," if you will. The power will be decentralized, declare crypto stans. Except that it isn't so much decentralized as simply moved. And it's not moved to the people who will supposedly benefit, but to a new, small set of people. And unlike a government, these people do not have to answer to anyone. They do, however, use the power and money they accumulate to make sure that elected officials and legislators stay friendly.

But the notion that this disruption is somehow creating more freedom and opportunity for the ordinary citizen is a fiction. Instead, by removing a trusted third party, they create an unregulated marketplace where the real power is in the hands of a few rich folks, and the average person is a sheep ripe for shearing--and no recourse should such a shearing happen. Without a trusted third party in the mix, the rich and powerful are free to set rules that serve them. See also: the entire school voucher biz.

Some of the stories are just astounding, like the folks who lost millions of dollars because when market fluctuations became extreme and investors went to cash in, the exchange simply shut down so that they couldn't until the moment had passed. Yes, crypto shares certain folks' naive faith in tech.

McKenzie and Silverman travel through many of the halls of crypto-land and talk to many of the major players (some of whom are remarkably willing to reveal to talk). In the end, you have to conclude that however bad, scammy, and fraudulent you thought crypto might be, it is probably way worse than that. And many of its worst features echo the school privatization movement.

Crypto uses the language of known, trusted stuff-- it's "currency" and "coin"-- to get folks to offer trust to something that has no basis in anything other than its creators' will to make something out of thin air that can be used as a foundation for grift. Sure, there are some people involved in good faith, but the whole edifice is built on smoke and mirrors.