Episode 17: Fact or FUD
Crypto in the Media
There’s this phenomenon that happens when you read a news article on your area of expertise… Michael Crichton, famed film Jurassic Park producer, coined the term and defined it. The Murray Gell-Mann Amnesia Effect.
He describes the effect:
“You open the newspaper to an article on some subject you know well. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. You read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know.”
I’m sure many of our listeners can relate, whether it is about finance, about infosec, about privacy… whatever it is. I’ll bet when you read an article on your area of expertise, your gears start grinding. This is wrong! Where is the nuance? This is misleading!
Well, we are no different. So this week we are here to grind on crypto in the media.
Trope 1: Dr. Pangloss and the Blockchain
In Candide, Voltaire parodies the eternal optimism of Enlightenment thinkers with his character Dr. Pangloss. Pangloss has a cure for everything — though his cures are impractical at best and harmful at worst. Hearing what the media has to say about “the blockchain” can often feel like a conversation with Dr. Pangloss himself… But “the blockchain”, alas, is no panacea.
This is not mention the never-ending flood of press releases on blockchains that are solving everything from supply chain (erm, saladchain) to securities settlement. Note that few of these articles will cite the number of transactions actually occurring.
Trope 2: Subtle and Not-So Subtle Shills
There is a fine line between news… and pumping your own portfolio. In particular, if you are an investor or fund manager, this can get problematic pretty quickly.
We can’t publish this piece without touching on CNBC showing retail investors a step by step tutorial on how to buy XRP at the peak (January 2018) using a step by step tutorial on Poloniex. That said, is it really any different than Kramer (of MadMoney fame) yelling at folks to buy Telsa or ExxonMobil? We argue yes it is, but perhaps if you’re watching CNBC, this is what you came for.
Trope 3: Hunt for Satoshi and the Next (Male) Crypto Messiah
Our obsession with legends is a well-documented phenomenon. The media’s fervent hunt for Satoshi and the next crypto messiah is an incredible thing to watch. It started with Newsweek, who “outed” a man named Dorian Nakamoto as being Satoshi, which ended up ruining this poor man’s life.
Of course Dorian is not the only man who the media has hailed as Satoshi Nakamoto. In 2016, Craig Wright claimed publicly to be Satoshi. Naturally the media clambered all over the story… only to be disappointed when real evidence failed to emerge. While the media has moved on since then, it seems like certain parties are still holding onto either delusion or sour grapes when it comes to this claim. The media certainly hasn’t stopped fawning over the awkward coder crypto heroes archetype, and it’s led to a boom of self-styled and self-proclaimed polymath protocol founders. Enough said.
Trope 4: Stock Photo Images
I mean… I just can’t with the crypto stock photos. There are really only 4 standard stock photos: physical coins, “blockchain” networks as connected dots or clouds, an ominous shrouded figure “hacking” at a computer, and people biting bitcoins.
Coin Center’s head of communications, Neeraj K Agrawal, is a crypto stock photo historian, and if you follow him, you’ll never miss a beat. His job is to explain crypto and policy to journalists, so he probably feels the pain of crypto media most acutely. Some of our favorite stock photos are below — all credit to the original publishers.
Trope 5: Everyone is Getting Hilariously Rich or Absolutely Rekt
The media tends to see-saw between claiming that bitcoin is going to the moon and you’ve missed the boat and pronouncing that those who bought into crypto were foolhardy and destined for destitution.
No article encapsulated this more than the New York Times piece that perfectly captured the zeitgeist of early 2018: “Everyone is Getting Hilariously Rich”. However, just 4 days later the same author published an article proclaiming that the “Crypto Bubble was Deflating”. Now the funny thing is, she was right both times! The whiplash of crypto prices can result in a fair amount of tail-chasing it turns out.
Our favorite articles that fall within this trope tend to be the exposés… like Forbes’ piece: “Tricks of A Crypto Trader”.
Trope 6: Bitcoin is Dead Part 1,949,087
This one speaks for itself.
Check out the Bitcoin Obituaries.
Trope 7: Bring on the FUD (Dice)
And finally, the FUD. The Fear Uncertainty and Doubt.
China FUD. Tether FUD. Energy Waste. It’s not Decentralized. It’s only 7 transactions per second. It’s not scalable. It’s not private. All the FUD.
Oh and don’t forget that bitcoin is supposedly only for dark net activity, money laundering, and tax evasion.
Make Your Own Narrative
All of this is just to say, don’t believe everything you see on TV… or read on the internet. DYOR (do your own research) and make your own narrative. This is part of the value of crypto twitter, or select conferences, and of listening to content created by those who are in the trenches!