A Jacobin Podcast Review: Critiques on Crypto and Sterlin’s Response – Op-Ed Bitcoin News
The following opinion editorial is a Jacobin Podcast review written by the author Sterlin Lujan, the chief risk officer with Cryptospace. The Jacobin Podcast episode called: “Dig: Cryptocurrency w/ Edward Ongweso Jr & Jacob Silverman,” touches upon “cryptocurrency, NFTs, Elon Musk, the metaverse, meme stocks, and techno-utopianism amid the crushing reality of our neoliberal hellscape.”
Cryptocurrency isn’t fringe technology anymore. Over the last decade, it has become embedded into finance, culture, and even our social life. It’s drastically changing the way we think about money, economics, and human action. However, some people, primarily on the left, are skeptical of cryptocurrency. Many of them hate it, regardless of how much of a godsend it has been for many.
My friend, thought leader, author, and psychedelic visionary, Daniel Pinchbeck, pointed out a recent podcast episode of Jacobin called “Dig: Cryptocurrency w/ Edward Ongweso Jr & Jacob Silverman.” He asked me if I would listen to the podcast, and take the time to address their claims and concerns.
I would not typically use the time to do this — but Daniel is interested in furthering the discussion around crypto. I also believe a review and critique of the material will benefit others who want an insider’s opinion, as I have been working actively in the industry for 6 years. It’s my hope, then, that this in-depth response will create an evolutionary and freewheeling discussion about the benefits, capabilities, and fears behind crypto.
Notes: Moving forward, I refer to the podcast speakers and guests as the “Podcasters” for simplicity sake. All of their arguments are numbered and in bold. My response immediately follows each of their arguments. I also sometimes separate my use of “crypto” and “bitcoin.” I may use crypto to refer to the ecosystem generally, and I may use bitcoin to address a specific point they made about it. The context of each section and the argument I am addressing will help clarify. I have also left many links for follow-up research and to provide factual evidence.
“Crypto supporters believe these digital tokens are supposed to have value somehow.”
The podcasters believe “cryptocurrency” cannot or does not have value. They attempt to dismiss cryptocurrency by claiming it is not really a currency, but only “digital tokens” or digital faberge eggs.
The reality is these “digital tokens” do have value. They have literal value as demonstrated by their market capitalization and trading activity at exchanges. Even the podcasters reference the trillion-dollar valuation of the crypto markets throughout the podcast, undermining their own claims.
Naturally, their perspective leads them down the rabbit hole of believing crypto is not currency or money. Using semantics, they try to devalue cryptocurrency by dismissing or ignoring its impact, although their critique misses the reality of what’s happening in the world.
“Bitcoin (and other cryptos) are not “currency, because they can’t be exchanged for goods and services”
This claim is patently false. With a quick Google search, we can ascertain that roughly 15,000 businesses currently support accepting bitcoin for payment. This is not an insignificant amount. The number of businesses that accept crypto is also likely an underestimate, because many retailers also accept various alt-coins. To add an anecdote, I have personally exchanged crypto for goods and services…directly and on multiple occasions. So what is the point of the anecdote? You can disprove the podcaster’s claims yourself without having to strain too many neurons. Just navigate onto overstock.com, place some items into your cart, and proceed to pay with the crypto.
Here is another salient point. Not only can you purchase goods and services for crypto directly, you can also leverage various intermediaries to purchase goods with your crypto. With purse.io, you can use a middleman to buy your wares from Amazon and earn a 10 to 15% discount. Or, if you use Dash cryptocurrency, you can download dash direct app, buy gift cards, and then purchase from a variety of stores at a discount.
I mention these options and innovations to demonstrate the podcasters are ignorant of all the ways to purchase goods and services with crypto, or they are lying to support an anti-crypto agenda. I hope it’s the latter.
“Crypto is too volatile to support any kind of major use case.”
Cryptocurrency does suffer from violent swings on the market and seemingly excess volatility. But the podcasters missed the solution. The beautiful thing about crypto is innovation is not hamstrung by inefficient bureaucracies or sluggish banking regulators. In comes the stablecoin. It was invented as a way to mitigate market volatility.
Of course, many object to stablecoins as they are just pegged to the US dollar. It is certainly true many stable tokens are pegged to the dollar, but luckily stablecoins can be pegged to anything; silver, gold, oil, leprechauns (that is the beauty of programmable tokens). The point is stablecoins solve the volatility problem and allow crypto to morph into a stable unit of account when necessary.
As a side argument, some people don’t view the volatility of bitcoin and crypto as a problem. There is a huge amount of volatility in the fiat and FX markets. However, a lot of the volatility is obscured by capital controls and other government meddling. In nature, nothing is consistently stable; there are waves and troughs; tops and bottoms; sine waves. Early crypto thinker Daniel Krawisz wrote a piece called I love Bitcoin’s Volatility over at the Satoshi Nakamoto Institute. Daniel elaborated poignantly on the volatility problem,
“To complain that no one will use Bitcoin because it is too volatile is therefore like saying, ‘Bitcoin’s adoption rate is so astonishingly fast that it will never be popular!’ It’s like saying, ‘This oven is heating up so fast that I’ll never be able to cook with it!’ It’s like saying, ‘This novel is so exciting that no one will ever read it!’
There is no evidence that Bitcoin’s volatility is hurting it. Any imaginable indication of Bitcoin’s adoption rate will show that its adoption rate is extraordinarily rapid. So how, exactly, can volatility be a problem? If Bitcoin were less volatile, would it have an even more rapid adoption rate? This is nonsense because Bitcoin’s price has to go up as more people start using it, and if a lot of new people start using it, then it has to go up fast (that is, be volatile).”
“Main use case for cryptocurrency is market speculation.”
I rebutted this claim earlier by addressing the idea that crypto has no use case as a currency. However, one may say the main use case is still speculation. I believe this argument is primarily a diversion or red herring.
Speculation is not a use case. It’s simply a byproduct of emergent technology….