After a generalised fall in the prices of virtual currencies, the crypto-sphere is experiencing a strange sort of interregnum: the standard-bearers are not dying quite yet, but nothing new is being born either. In the meantime, some would argue, morbid symptoms have appeared.
In May, the share price of Coinbase, a platform that presents itself as the Amazon-cum-Google of crypto, was trading at less than 20% of its record-high. The company has indefinitely frozen all hiring, and even rescinded some offers to workers about to join them. This despite Coinbase’s 98 million registered users having cumulatively deposited some $250 billion into its coffers. More than one fifth of that figure evaporated last month, when algorithmic stablecoins TerraUSD and Luna lost almost all of their value in 24 hours. These numbers are not trivial: according to the European Central Bank, around 16% of Americans and 10% of Europeans invested in crypto-assets in 2021.
Another bubble is bursting, with mainstream outlets now souring on the crypto-sphere’s favourite talking points. The New York Times ran a subhead announcing that cryptocurrency is egalitarian, decentralised, and anonymous in myth alone. Elsewhere in the real world, El Salvador’s bitcoin project continues to aggravate the country’s economic suffocation. Bloomberg compared El Salvador’s total crypto losses to the interest it owes bondholders in mid-June. The headline says they’re equal, but it’s an extra $2 million that has disappeared since September.
By contrast, back in the US, crypto executives are finding that older playbooks suit them just fine. They have wasted no time running straight to state legislatures, who are receiving them with open arms; some states are ready to copy-paste lobbyist language into law. With Congressional elections around the corner, the titans of this new industry are pouring more money into US politics than either Big Tech or Big Pharma.
As ever, the articles, papers, and books we’re sharing this month can help deepen our understanding of such events. We must do more than acknowledge the fact that internet hype stokes bitcoin prices; and that the Chivo Wallet – perhaps the silver lining to Bukele’s strategy – has further centralised capital among young men with a university education and access to traditional banking. There’s much to rehabilitate in the crypto world, as well as critique. Cypherpunk, to take one ideological inspiration, might very well help us agitate against paradigms of surveillance. Read on below.
The cypherpunk movement provides an intelligible, viable, and effective model of data activism and strategic agency. This essay contributes to the pluralistic, multidisciplinary understanding of resistance to surveillance and practice of sousveillance by outlining the basic normative, epistemic, and pragmatic aspects of cypherpunk theory and practice.
Despite the government’s ‘big push’ and a large fraction of people downloading the Chivo Wallet, bitcoin usage for everyday transactions is low. It is also concentrated among the banked, educated, young, and male population. This study also estimates the fixed cost of adopting the new payment technology, the importance of strategic complementarities for users, and the elasticity of substitution between mobile and other payment methods.
A sharp increase in bitcoin’s popularity or hype – which manifested through a rise in the number of bitcoin-related Google queries – also increased the price of the cryptocurrency. This effect corresponds to the ‘collective hysteria’ that spread in the online community, and was itself triggered by the increasing volatility of the bitcoin market.
Surveying processual changes in the global financial systems, this article characterises recent monetary systems, and predicts how technological changes – namely, the dominance of distributed ledger technology – will impact the adoption of digital money by central banks.
Beneath the surface of the global financial system is a long-established lobbying infrastructure: an alliance of partners, waging a covert war on cash. What are the technical, political, and cultural differences between our various forms of money? And whose interests are being served when banking and tech companies promote a cashless society under the banner of progress?
Online markets in cryptocurrency represent a sprawling and eclectic alternative financial system. Crime control is almost entirely absent from this new crypto economy, and it is full of scams. This paper draws on an ethnography of crypto trading to suggest that the grey economy of cryptocurrency trading is part of a wider evolution of society towards the technosocial, and perhaps even towards the metaversal.
Whether digital currencies become a geopolitical game-changer will depend on the digital RMB's successful transformation into a transnational unit of account, akin to the USD. The current gap between Chinese and US monetary power and autonomy is enormous, and their two currencies occupy very different positions within the global monetary hierarchy.
Preying on the Poor? Opportunities and Challenges for Tackling the Social and Environmental Threats of Cryptocurrencies for Vulnerable and Low-Income Communities
This paper argues that effective environmental regulation of cryptocurrencies is urgently required, both to reduce the threat of catastrophic climate change, and to help the world’s poorest towards sustainable development. However, regulating cryptocurrency mining in any context is likely to require a combination of efforts – and is unlikely to result in win-win outcomes for all.
Although several hurdles are constraining the immediate launch of carbon currency, the carbon standard poses a feasible international monetary system as the world-wide campaign to achieve carbon neutrality progresses.
Intense theoretical and practical struggles are set to continue over who should control the quantity of money, and the cause of the capitalist economy’s instability. But perhaps the biggest debate will concern who or what is more dangerous: concentrated centres of private wealth and private enterprises, or the contemporary state.