I joined in on the crypto craze at about the time developers started to clue in on the idea that their GPUs could be repurposed for hashing.
Which, I know, in crypto time, is an eternity ago. But I actually consider myself one of the late adopters. I wasn’t the one pushing the ideas or the software.
But it was a really exciting time to be a part of the community. Many of us spent long nights imagining how we would transform the meaning of value, the meaning of work, maybe even the meaning of democracy with a new kind of consensus protocol. Where the code, impartial and absolute, determined what value meant. It was pretty crazy, but it was worth a shot, because the rest of the financial world looked bleak. Bitcoin was nothing more than a backlash against a world that ran on corruption, greed, and the worst parts of human nature.
I miss those days.
I remember when I burned out my laptop GPUs on mining.
It was to the great protests of my girlfriend, who thought what I was doing was wasteful and insane. Which, honestly, it was. Bitcoin was worthless, and it was an epic hack when it was used to buy something expensive, like a pizza.
But nobody was doing this to get rich, or else . It might be hard to imagine, but the fact that we were early adopters flew over our heads. We never thought our worthless coins would someday be less worthless, and we certainly never thought pennies of electrical bills would turn to hundreds of thousands of dollars in a few years. Exchanges didn’t exist, so you couldn’t really cash out even if you wanted to. It just felt amazing to be part of a community that wanted to rethink the meaning of value as something truly fair, like a computer protocol.
At some point actual money started to flow in and out. By actual money, I mean that you could find people on crappy forums to navigate a complicated mess of a value chain to buy coins with dollars and eventually pay for a VPN without disclosing your identity to the VPN operator. This came at the cost of several hours of lost productivity that basically quintupled the price. Nobody left their day job for Bitcoin.
Until someone realized if you pulled the right tricks, you could leave your day job. The most obvious business model was the exchanges that interfaced to the real world and skimmed fees. Everything was still a joke and getting things done still meant talking to people when things broke and servers went down. But this was the first time that Bitcoin was given some formalized notion of value.
Once Bitcoin had a dollar price tag, that suddenly meant that every piece of the modern digital economy started to apply.
If you were scammed, you were out a few bucks, so reputation started to matter. If you followed closely you could arbitrate between exchanges and skim some token amount. If you were somewhat clever you could work to optimize this process — even automate it. And the first crappy trading bots appeared.
But then something else happened.
As BTC became more useful, the law of supply and demand kicked in. So Bitcoin became valuable. People were less willing to part with coins if they would be worth a little bit more tomorrow than they are today.
Miners were willing to pay to mine. Mining rigs became a thing. Pools became a thing. There were even jokes that one day the pools would turn into mining farms. This wasn’t really taken too seriously.
Still, people started to buy just a little bit of extra BTC, so they could cash it out later for for a small bonus. It seemed like you’d be richer if you held your coins instead of using them, so why not? You still believed in the vision, but it wouldn’t hurt to be rewarded for your faith. Nobody would publicly admit they invested their savings into coins, though I suspect some did.
Then the press noticed, and the fringe puff pieces started. If you were savvy in the tech space, you probably heard about cryptocurrencies at this point. The savviest of the technocrats at this point spun off their own flavors of coins. Most went nowhere and were abandoned, but some survive to this day.
As it became less insane to believe in cryptocurrencies as a thing that has real-world value, startup companies started to form around these ideas. This was a time of starry-eyed experimentation, and many different approaches were tried.
Micropayments were a bright spot— remember, this was a time when mining fees were still basically nonexistent, and the idea that Bitcoin could be the next Visa was very real.
This was the cryptocurrency golden age, and important players came out of it. You’ve probably heard of Coinbase.
The death bell
With the success of startups forming around cryptrocurrencies, the tech press started to go to town. This attracted a lot of newcomers, who began to seriously diverge on what the meaning of cryptocurerncies should be. Were they currencies? Enablers of new economies? Stores of value? Investments? Lotteries?
All of these were tried. Lack of regulation meant each new entrant outdid the last, and values became liabilities. If you wanted your idea to be heard through the noise, you had to strip out the parts that required the listener to think about what you were saying. Yeah, it’s cool that we’re building the new economy. But what’s in it for me? What are the returns?
The scariest thing I remember was when I was asked by a friend — who was not in the tech industry — to explain Bitcoin.
I excitedly obliged, and eagerly dove into the fundamentals of hashing and transactions and blockchains. I’m a programmer; I love explaining things. After a half an hour of explanation, my friend admitted they weren’t really following, and would need to do more research. But then came the million dollar question. “But be honest, should I buy Bitcoin?”
I’ve been asked this question probably a hundred times since, and each time a part of me dies. This isn’t why I got into cryptocurrencies.
I don’t remember when I first heard about an ICO, but that was when the switch flipped for me.
Bitcoin is alive, and I don’t see it dying. But the thing in Nakamoto’s paper that started it all? That’s dead and buried, and you’ll find no flowers on the grave.
But I long for the good old days of crypto.
I increasingly find myself wondering how we could go back to the days when we’d sacrifice our laptops for a democratized distributed exchange of value.
How do we do this?