A People's History of Crypto

by Kyle Downey, CEO & Co-founder - 23 Apr 2022

For many people in crypto, there is a common story: when did you first read the Satoshi Nakamoto whitepaper? Rather than following a white rabbit, Alice followed a whitepaper, and down the rabbit hole we all went. For my part, I came across it in 2013 after spotting a news article about a Bitcoin mining operation in Kowloon; my family was living in Hong Kong at the time. For the last nine years exploring the world of crypto and then trading it has been a hobby bordering on an obsession. While the mechanism of blockchain was interesting and I enjoyed playing with the exchange interfaces — having a full order book feed freely available over Websockets was a revelation for someone used to high-end exchange co-location setups and premium equity price feeds — that was not actually what hooked me. It was instead the culture and the stories around crypto that was the real draw.

You cannot exaggerate the deep strangeness around the early history of crypto. The firing gun is the whitepaper, a brief technical manifesto by an anonymous individual or possibly a crypto-anarchist collective, one or more of whom may already be dead. As people sought to track him or her or them down, Satoshi’s messages on BitcoinTalk received scrutiny only exceeded by Q Anon fanatics parsing Q Drops. The whitepaper itself is treated with a degree of reverence that borders on religious devotion; Pantera Capital, an early hedge fund in the space, famously has a copy of it printed on the walls of a conference room. This despite the fact that it is only nine pages long including the endnotes, and as Amy Whitaker pointed out — among others — there’s an awkward fact about the whole thing: it’s not particularly innovative. So the first mystery, aside from the obvious one about Satoshi themselves, is why did the whitepaper land with such impact?

In the very first Bitcoin block, the so-called Genesis Block, Satoshi embedded a transaction comment: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks,” in reference to this article. This was not just an arbitrary proof-of-life statement in code. This comment is generally interpreted as a nod to both the Great Financial Crisis and quantitative easing by central banks. It was a political statement that chimed with Satoshi’s decision to cap the total number of bitcoins at 21 million. The world’s gold bugs and all and sundry obsessed with currency debasement took note, but I think there’s even more at work here. Unlike earlier work, the whitepaper landed post-GFC, post-Occupy Wall Street. It struck like a hammer on a rage-filled cultural moment, one animated by a deep sense of betrayal by central institutions. In the midst of all that, Satoshi released a proposal on how that could all be torn asunder and replaced: as the mob was coming for Wall Street, Satoshi was filling a Molotov cocktail with gasoline.

OK, fine, big mystery, non-binary cryptographer writes interesting technical paper and clearly has an inflation hang-up. Is that all? No! Because where people took it from there, long after the shock of the not-so-new had faded, that’s where things got really weird. Crypto has its sinners (Mark Karpeles and Craig Wright, among others); its saints (Hal Finney); a feast day (Bitcoin Pizza Day, May 22nd); rituals of devotion (Proof of Keys Day, January 3rd). Even the origins of Bitcoin trading have oddities, like the fact that the infamous Mt. Gox exchange was not originally a financial exchange. Mt. Gox stood for “Magic the Gathering Online Exchange:” one of the biggest Bitcoin exchanges was originally devoted to trading cards. Jon Stewart was not entirely wrong when he compared Bitcoin to the Tamagotchi of currency. Bitcoiners like to joke about how many times people have called time on Bitcoin and yet it rises again and again like some kind of disinflationary Jesus, but we should consider the possibility that for a long time it was just too stupid to die. Bitcoin was a joke and a scandal long before Dogecoin forked the code and literally turned a joke meme into a currency.

History is filled with revolutions that got co-opted or turned out to be just as bad as what they aimed to replace. But you cannot argue that the spectacle is worth the price of admission. This mad, shambolic train filled with cryptographers; Silicon Valley geeks; drug dealers; terrorist fundraisers; DeFi Degens; Greenwich hedge fund bros; venture capitalists; artists; hippies; New Hampshire free-staters; Communists; libertarians; gold bugs; Russian ransomware hackers; seasteading enthusiasts; economists; guys who read way too much Ayn Rand; billionaires; punters; pranksters; Utopians — it is, like the Internet that spawned it, the human comedy writ large. And as decentralization as a theme expands to embrace not just finance but also more recent rage against Big Tech’s abuse of everyone’s privacy and mixes in with a broader distrust of elites and institutions … it is very clear now that this was never just about data structures and protocols or even technology more generally. The up, down, strange and charmed quarks that we use to construct economics systems — ownership, provenance, price discovery, transfer of value — are being recoded and re-applied to everything from art to social media to politics. I don’t think this ends quietly.

Satoshi lit a match. We are all just living in their firestorm.