Opinion | The Strange Allure of the Blockchain

For my part, the discussion over Thanksgiving leftovers brought home a data point about women’s and people of color’s interest in cryptocurrency. A 2021 survey found that the people who trade crypto are a far cry from the young, white, male image of a techbro:

The average cryptocurrency trader is under 40 (mean age is 38) and does not have a college degree (55 percent). Two-fifths of crypto traders are not white (44 percent), and 41 percent are women.

That survey captured a lot of people, like my cousin.

What fascinates me is how widely crypto and NFT talk has diffused, and so quickly. It is not often that I hear the same branding from lower-income people of color that I also hear from high-earning white peers with advanced degrees. Depending on your consumer profile — biographical data like your age, race and gender, plus your purchasing habits — you probably hear about these financial instruments from online ads, social media groups, and peers who are early adopters.

I hear about crypto from my educated, high-income academic and writing friends who also shop at Target a lot. I also hear about crypto from financial advisers and college classmates who share stories about making a lot of money mining crypto and trading NFTs. But because of my racial and geographic identities, I also hear about crypto from my working-class friends and family. They are getting messages about crypto from Facebook and Instagram and their friends who have moved on from candle-leggings-timeshare-jewelry multilevel marketing schemes to trading Dogecoin. Crypto and NFTs might be the only thing these diverse groups share in common. For that reason alone, the explosion of these technologies deserves some sociological attention.

All of the branded cryptos and NFTs were born out of the invention of the blockchain. I don’t think of blockchain as a technological innovation so much as it is a cultural iteration. Blockchain is about solidarity among strangers. That’s the kind of thing we have been striving for since the first mechanical age. On a purely technical level, blockchain is a ledger. That ledger is decentralized (although we will complicate that a bit in future discussions) and that decentralization makes it hard to manipulate. Now, the point of decentralization is that ideally no one who records information in the ledger has to trust anyone else when they exchange information based on that ledger. If I buy something, I can list my ownership in the ledger that assigns my ownership rights a unique identifier. If someone challenges my ownership, the ledger’s record is the god tier of ownership. I have something that no one can take away from me! You start to see why this idea would appeal to a lot of people, but especially to groups of people whose right to ownership has been encoded in legal precedent and cultural norms for generations. If I live in a community where the police absolutely use eminent domain to claim my private property and I cannot do anything about it, that sense of everyday powerlessness would make the promise of blockchain sound pretty good. To me, though, it presents more questions than answers.

Those questions are about the culture of blockchain, not about its technical innovation. Blockchain promises to decouple trust 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 trust moves from institutions — like banks and regulators — to the apolitical ledger. In theory, no one owns the ledger. That means no one can undermine your bargaining power in an exchange. But is that actually how the 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 deciding whether something is a scam or merely risky.

Last week I did something I wish I had done before that Thanksgiving dinner conversation. I talked with some people about cryptocurrencies and NFTs. First was a far-ranging conversation with Anil Dash, a writer and entrepreneur best known, perhaps, as the C.E.O. of Glitch, a software development company. He has taken a lot of heat for having a nuanced assessment of blockchain, crypto and NFTs. We used to write together on a culture and technology vertical on Medium, where Anil has blogged about tech for years now. Anil is thoughtful and erudite on the cultural history of internet technologies. He is also pragmatic and has a keen interest in inequality. That mix of expertise and sensibility made him the first person I wanted to talk to about the intersection of citizen consumers and the alternative financial technologies infiltrating our everyday lives. The conversation was so rich that I will write about it in a two-part discussion starting next week.