IV Trust, Money, Community

Where does crypto go from here? Read this part when you're ready to find out. In the meantime, ponder those words: trust, money, and community. Also, Ponzi.

Let me tell a couple of stories about crypto and society.

A.

Trust

One story goes like this. We live in a world of trust. That trust pervades everything we do. We're spoiled; the institutions we deal with every day are trustworthy. Not all of them, not all the time, not in every way, but quite a lot of them to a high degree. We put money in the bank, and when we go to take it out, it's there.

Crypto-Satoshi Nakamoto and his disciples said:

NO, NO, NO. TRUST IS BAD.

DON'T TRUST YOUR BANK.

USE IMMUTABLE CODE. VERIFY EVERY TRANSACTION FOR YOURSELF, OR DOWNLOAD OPENSOURCE CODE AND VERIFY THAT IT WORKS CORRECTLY, AND THEN USE IT TO VERIFY EVERY TRANSACTION FOR YOURSELF, OR AT LEAST USE A NETWORK IN WHICH THAT'S POSSIBLE AND IN WHICH ECONOMIC INCENTIVES DEMONSTRABLY MAKE IT LIKELY THAT IT WILL HAPPEN.

AND DO ALL OF THIS IN A SYSTEM THAT'S RESISTANT TO CHANGES, THAT CAN'T BE CONTROLLED BY GOVERNMENTS OR BANKS, THAT'S IMMUNE TO THE RULES OF WIDER SOCIETY.

This had an appeal, and crypto became very valuable, and people looked to put their money to work in crypto—and they trusted people. Over and over again, they trusted Quadriga and Terra and Voyager and Celsius and dozens of other projects that failed or ran off with their money or got hacked. They just fell over themselves to trust people.

Why did they do this? Well, there’s a common thread in these kinds of things. The people who are easiest to pull in are often the ones who think they’re the most independent-minded and cynical. “Either the bank is lying or Celsius is lying,” Celsius told people, flattering their unjustified belief that they knew the real score.