\n<\/p>\n
If you have ever accompanied a 5-year old child to a store, you know the risks of saying no to their demands for what you deem to be an unneeded purchase. In some cases, their breathing weakens, tears well up, and their little bodies shake in anger<\/a>. This can be heartbreaking\u2014and lead to longer-term problems if you give in to the temptation of spoiling them.<\/p>\n Marketers celebrate this moment of \u201cpester power\u201d<\/a> for its shattering of rationality and the cultivation of a lifelong vulnerability to the shopping frenzy. Never mind that kids can learn to identify those frenzied feelings and develop tools to deal with them, which include slow and deep breathing to calm the body and soul. That psychological skill is not much welcome in our culture of consumerism<\/a>.<\/p>\n This brings us to the latest craze to gin up the masses\u2014cryptocurrency and the useless stuff you can buy with it in the hope of a big payday. Advertising for crypto is on the rise, reflected in this year\u2019s Super Bowl commercial breaks<\/a>. As with most commercial advertising, crypto marketing exploits the psychology of \u201cmissing out\u201d or being \u201cless than,\u201d which can elicit a perpetual feeling of inadequacy<\/a>\u2014of body image<\/a>, health and fitness, income, and possessions. Celebrities feed this new frenzy<\/a> by hawking crypto and nonfungible tokens (NFTs). Movie studios add options for crypto exchanges, talent agencies like CAA pay to represent tokens, and some high-profile people, including the mayor of New York City, ask to be paid in cryptocurrency.<\/p>\n And then there are the grifters, influencers, and scam artists<\/a>; crooks using dating apps to cheat people<\/a> out of money to buy crypto; and the bullying<\/a> of ordinary folks threatened with identity theft<\/a> if they don\u2019t pony up some crypto coins. If you haven\u2019t watched Dan Olson\u2019s \u201cThe Line Goes Up\u201d<\/a> about the false promises and dangers of crypto, you might want to set aside a few hours to check it out.<\/p>\n All this publicity, good and bad, has the effect of creating the illusion of crypto\u2019s ubiquity and status as a store of value (despite its well-documented volatility, such as when Bitcoin lost half its value in January). Still, as of last year, 14 percent of Americans<\/a> held some amount of cryptocurrency: some for buying NFTs, some to hedge against inflation, and others who have money to burn and no casino nearby.<\/p>\n The sales pitch is basically that you can eliminate middlemen (central banks, data brokers, stock markets) and participate anonymously (actually, pseudonymously) because the blockchain on which crypto operates is supposed to enable decentralization and anonymity.<\/p>\n So why has so much of the recent reporting on Web3 (the catchall for crypto, NFTs, and the metaverse) identified a culture of \u201cFOMO bullies\u201d mocking crypto-skeptics as losers<\/a> and wimps<\/a>? As one software engineer says, \u201csome proponents of crypto get enormously angry<\/a> with those who so much as question the technology, much less criticize it, and I\u2019ve been told on more than a few occasions that it\u2019s not okay for me to express my skepticism or opinions.\u201d<\/p>\n Even the much-vaunted idea of decentralized power of crypto exchanges doesn\u2019t really match the reality of crypto ownership\u2014for example<\/a>, 95 percent of Bitcoin is held by 2 percent of accounts; 80 percent of the NFT market is owned by 12 percent of accounts. This is a picture of centralized power with one telling characteristic<\/a>: \u201cEvery member of Forbes<\/em>\u2019s 2021 crypto billionaires list<\/a> is a man. A third of them attended Stanford or Harvard. Out of the 12 listed, only one isn\u2019t white.\u201d<\/p>\n The problem of concentrated power hasn\u2019t lessened the enthusiasm among marketers of cryptocurrency and NFTs; in fact, the get-rich-quick ruses of crypto enthusiasts can barely hide the similarities of the crypto market to a Ponzi scheme. The<\/em> Wall St Journal<\/em> acknowledges as much<\/a> when it tells us that while crypto wealth will benefit only a handful of companies, \u201cindividual small-time investors will, as is so often the case, not be the ones who profit from their rise.\u201d<\/p>\n Software developer David Rosenthal has helpfully inventoried many of cryptocurrency\u2019s problems<\/a>: It\u2019s built as if there were no externalities like energy consumption and carbon emissions, when in fact token mining and exchanges consume as much electricity as some European countries and the system generates massive amounts of e-waste as miners burn through hardware. Its purveyors manipulate prices through hype and deception<\/a>. Ransomware enabled by crypto has disrupted supply chains, crypto gangs eat up storage capacity by exploiting free tier web services, and it has driven notorious crime<\/a> waves.<\/p>\n Rosenthal acknowledges the potential of blockchain-based protocols for decentralizing authority and safely preserving digital information but notes the empirical reality of re-centralization via concentrated \u201cpermissionless\u201d blockchains like that of Bitcoin as well as in long-standing, centralized \u201cpermissioned\u201d blockchains which are more energy efficient. The former is also more expensive, more dependent on cryptocurrency and speculative investors, and a bigger emitter of greenhouse gases. He notes, \u201cThe reason for this extraordinary waste is that the profitability of mining depends on the energy consumed per hash … Cryptocurrencies assume that society is committed to this waste of energy and hardware forever. Their response is frantic greenwashing.\u201d Even if crypto ran on renewable energy, he adds, \u201cthe idea that it is OK for speculation to waste vast amounts of renewable power assumes that doing so doesn\u2019t compete with more socially valuable uses for renewables, or indeed for power in general.\u201d<\/p>\n Crypto\u2019s over-consumption of electricity has led many countries to ban cryptocurrency mining in an effort to conserve energy and reduce carbon emissions. China has already done this, while Sweden<\/a> and Norway<\/a> have asked the EU to ban crypto-mining across the Union. One key goal for these countries is to stay on track to meet emission reductions set by the Paris Agreement of 2015, which means there\u2019s no place for crypto\u2019s unsustainable libertarianism. Many other countries have also banned<\/a> or are considering banning crypto for this and other reasons. In the US, where regulation of crypto is mostly non-existent, Silicon Valley continues to dominate the narrative with libertarian nonsense about freedom from big central powers and anonymity for crypto traders. There\u2019s even a move by some crypto miners to reopen shuttered coal-fired power plants<\/a> just to power their dirty businesses.<\/p>\n The good news is that blockchains can be created to help fight the climate crisis, and projects are underway to be everything that crypto isn\u2019t, starting with the decarbonization of energy production. The United Nations Development Programme (UNDP) is working on a number of global initiatives to ensure what they call an \u201cequitable digital future for everyone.\u201d<\/a> The UN\u2019s Environment Programme and the UNDP have also backed a Coalition for Digital Environmental Sustainability<\/a> (CODES), which has among its goals<\/a> a plan to use digital technologies to build a virtual world of sustainable practices<\/a> which just might offer a green antidote to the hyper-consumerist vision of the tech bros\u2019 metaverse<\/a>.<\/p>\n We can breathe easier knowing that these projects for a sustainable digital future exist. But we must also recognize how the manufactured frenzy behind cryptocurrencies and NFTs can trigger many of our worst consumerist behaviors and further exacerbate the dangers of climate change<\/a>. We\u2019re not so distant from that 5-year-old after all.<\/p>\n<\/p><\/div>\nThe crypto sales pitch<\/h3>\n
The reality of crypto ownership<\/h3>\n
Cryptocurrency’s problems<\/h3>\n