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What the media gets wrong in its persistent crypto criticism

July 6, 2022, 3:19 PM UTC
The downturn in crypto markets has galvanized the sector's harshest critics.
Michael Nagle - Bloomberg - Getty Images

Nascar crashes, fail videos, and cryptocurrency market crashes. What do all three have in common? The pleasure some take in watching other people experience pain. 

But only one of these three supports a cottage industry of gravedancing, and that’s crypto. Whenever the price of Bitcoin drops, or a crypto project implodes, the aftermath is a tidal wave of commentary, reporting, and opinion think pieces rejoicing that, once again, the “crypto bros” got what they deserved. 

Mass schadenfreude may feel good in the short term, but it’s bad for society in the long term. Reflexive dunking on cryptocurrencies not only drowns out legitimate criticism but also holds us back from recognizing, embracing, and developing new technologies. 

Some sort of media negativity bias regarding crypto shouldn’t be too surprising. No one wants to read a story about a plane that landed safely. However, the negativity around crypto has become detached from the merits of the underlying subject matter and doesn’t come close to an objective evaluation. 

What’s even stranger is that this anti-crypto bias comes at a time of economy-wide decline and disruption. The major stock indices have entered bear market territory, inflation has surged to a 40-year high, and supply chain disruptions continue to plague the consumer. We are facing an ongoing struggle to keep infant formula on the shelves and energy affordable. Is celebrating the decline of crypto markets really the economic story of this moment? 

Ian Bogost’s recent article in The Atlantic, in which he opines on his feelings about the crash of a particular cryptocurrency, is a perfect example. Bogost reveals his intentions as he notes the source of his aversion: “We end up feeling nauseated at the crypto bro’s success [because] [i]t’s so unearned, it makes us sick.” Fair enough–but completely immaterial to the parameters and potential of the actual technology. 

Or as The Guardian’s Emma Brokes said, “I feel the same way about all those collapsing NFTs–pure schadenfreude, plus irritation at not understanding any of it.” 

What these and many other write-ups share is a pervasive schadenfreude and almost proud ignorance. The question our writers seem to be asking but refusing to answer is: “Why does everyone else see something in crypto, when I don’t get it at all?”

This is why some critics are going out of their way to target crypto. Why else would anyone get so riled up about a few celebrities making crypto-themed Super Bowl ads? Why else would certain Senators essentially call for Congressional hearings because Fidelity decided to offer its clients the completely voluntary option of adding Bitcoin exposure to their retirement accounts? 

The big problem here is that this frustrated seething has overwhelmed any substantive public debate on the applications of various crypto protocols, whether critical or supportive in nature. Fixation on daily price fluctuations and perceived “tulipmania” has obscured any debate on the merits and tradeoffs of cryptosystems. 

There’s plenty in the crypto ecosystem that demands scrupulous, careful attention. The recent market turmoil has shown that overleveraged, under-collateralized bets can go horribly wrong, just as they have in past financial crises in the traditional financial system. 

The ecosystem needs the media’s critical eye to help distinguish between real innovations and projects that simply blow smoke and entice speculative activity. But if “it’s all tulips,” that isn’t possible. 

It’s just as important to look at what hasn’t broken in this downturn. All of the major DeFi protocols are chugging along exactly as designed. Bitcoin may be down, but the network persists and is just one among many examples of crypto’s basic “plumbing” working quite well amid the speculative froth. 

To the benefit of the information-seeking public, for a more robust conversation on the utility of crypto, let’s quit the schadenfreude and critically examine this ecosystem. 

Miller Whitehouse-Levine is the policy director at the DeFi Education Fund.

The opinions expressed in commentary pieces are solely the views of their authors and do not reflect the opinions and beliefs of Fortune.

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