Opinion | Blockchain’s strange lure
For my part, the discussion about Thanksgiving remnants brought home a data point about women and people of color’s interest in cryptocurrency. A survey from 2021 found that people who trade crypto are far from the young, white, male image of a tech bridge:
The average cryptocurrency trader is under 40 (average age is 38) and does not have a college education (55 percent). Two-fifths of crypto traders are not white (44 percent), and 41 percent are women.
That survey captured many people, like my cousin.
What fascinates me is how much crypto and NFT talk has spread, and so fast. It’s not often I hear the same brand from colored people with lower incomes that I also hear from high-earning white peers with advanced degrees. Depending on your consumer profile – biographical data such as age, race and gender, plus your buying habits – you’ll probably hear about these financial instruments from online ads, social media groups, and peers who are early users.
I hear about crypto from my educated, high-income academic and writing friends who also shop a lot at Target. I also hear about crypto from financial advisors and classmates who share stories of making a lot of money by extracting crypto and trading NFTs. But because of my racial and geographical identity, I also hear about crypto from working class friends and family. They receive messages about crypto from Facebook and Instagram and their friends who have gone from candle-leggings-timeshare-jewelry to multi-level marketing schemes to trading Dogecoin. Crypto and NFT are perhaps the only things these different groups share in common. For that reason alone, the explosion of these technologies deserves some sociological attention.
All the labeled cryptos and NFTs were born out of the invention of the blockchain. I do not think of blockchain as a technological innovation as much as it is a cultural iteration. Blockchain is about solidarity among strangers. It’s the kind of thing we’ve been striving for since the first mechanical age. On a purely technical level, blockchain is a general ledger. That general ledger is decentralized (although we will complicate it a bit in future discussions) and that decentralization makes it difficult to manipulate. Now the point of decentralization is that ideally no one who registers information in the general ledger should trust anyone else when exchanging information based on that general ledger. If I buy something, I can list my ownership in the general ledger, which assigns my ownership rights a unique identifier. If anyone challenges my ownership, the ledger record is the god level of ownership. I have something that no one can take from me! You begin to see why this idea will appeal to many people, but especially to groups of people whose right to ownership has been coded into legal precedents and cultural norms for generations. If I live in a society where the police absolutely use eminent domain to claim my private property and I can do nothing about it, that feeling of everyday powerlessness would make the promise of blockchain sound pretty good. For me, however, it gives more questions than answers.
These questions are about the blockchain culture, not its technical innovation. Blockchain promises to unleash confidence in our financial transactions from institutions. I do not have to trust that someone owns something, or trust that an institution will defend my ownership of something. Blockchain says that trust is moving from institutions – such as banks and regulators – to the apolitical ledger. In theory, no one owns the general ledger. This means that no one can undermine your bargaining power in an exchange. But is that actually how the general ledger works? Is an apolitical platform possible in a world where everything we do has a political cause and effect? I’m skeptical on that front. And healthy skepticism is a good place to start when it comes to deciding if something is fraudulent or just risky.
