Leda Glyptis shares a few ‘unpopular opinions’ about bitcoin, pointing a finger at the collective lack of imagination and understanding of its potential.

I remember the day someone first explained bitcoin and the underlying technology to me. I remember who was doing the explaining, where I was and who else was there. I even remember what time of day it was and what I was wearing. I remember it with the clarity those life-altering moments have, because the realisation of what this technology rendered possible did exactly that: it widened my horizon. It blew my mind. It was 2011.

Since then, we’ve talked a lot and we’ve built a lot. We’ve even built some stuff that genuinely needed a distributed ledger. Ethereum came, Ripple went mainstream, and Estonia showed us what digitising can really look like. I remained a believer and a fan, and the conversation shifted from “make this go away” to “let’s truly think about this now”. We’ve come a long way, and the place we got to mostly looked like this: We have a toolkit of technical capabilities including (but not limited to) various permutations of DLT (distributed ledger technology). These capabilities are smarter than us and most definitely smarter than the business models they are called upon to serve. The way we do business and make money in capital markets in particular, and financial services in general, is a product of its time, and its time is past. The new tools make a new reality possible. We just need to imagine and build it, rather than use these amazing tools to build faster horses, as the phrase goes. It was a good conversation.

Or rather, it was a moment of sanity – good while it lasted. In the last few months (accelerating to a frenzy in the past few weeks), I’ve been asked by more people than I care to count whether I have heard of bitcoin. They ask in a smug “wait till you hear this” manner. They ask because they want to share this thing that they genuinely feel they are in the know about. They ask because they have just spent some serious cash getting in on the action. Well, welcome to the party, kids. Only theirs is a different party.

These are not the droids I was hoping for

For years, there has been a ‘recognition’ moment; almost a crossing over when people new to this conversation came to understand what the technology can do. And there has been a certain degree of romance as our numbers grew; as this amazing new thing became known and increasingly understood. So in theory this mass awareness should be a good thing. Yet, all the folks who talk about nothing but the price of bitcoin these days don’t actually care about the what and the why. They barely understand proof of work, they don’t care about the philosophy of decentralisation and haven’t been curious enough to Google ‘hard fork’. I generalise, of course – this isn’t universally true, but it is sadly more true than not.

For sure, theirs is a different party – more Vegas casino than transformational moment. And the truth is that some of those gamblers will make money, and they will forever stay smug in the belief that they were clever. I don’t begrudge that. Some will lose money, but they won’t lose the belief that they knew what they were doing – they will be convinced they were unlucky rather than dumbly following the crowd onto the crest of the hype wave. I deplore that, but I can’t help. I tried and got lectured by people who understand neither bitcoin nor capital markets, and who are convinced they are smarter than the pack and will get out on time. They believe they are taking calculated risks like seasoned investors, and will outsmart the others (who, by the way, often think the same). Like a reveller at a party convinced they can stop drinking exactly three sips before they get drunk – it may work, but it wasn’t the shrewd calculation that made it so.

The bitcoin-furious neither spot the flaw in their reasoning nor admit that winning is a matter of luck, losing a matter of statistical probability, and going through life not learning a thing a downright human tragedy, win or lose a few bob.

Ignorance is not the absence of knowledge. It’s the refusal to acquire it. Don’t take that from me, take it from Karl Popper. In this bitcoin frenzy, I lament the truth of these words even more than the losers will lament the mortgage they took to buy bitcoin. So let me share with you my very unpopular opinions that haven’t yet persuaded a single Johnny-come-lately: I haven’t dissuaded anyone from sinking their kids’ college funds into what they see as a newly discovered get-rich-quick scheme, nor have I persuaded them to at least learn a thing or two while blowing their life savings.

Ignorance is not the absence of knowledge. It’s the refusal to acquire it. Click To Tweet

Unpopular opinion #1: Mate, you didn’t discover anything

The price alone indicates that it’s you and a few hundred thousand of your closest friends going crazy together. And you’re not investing – you’re hustling, putting your money ‘on red’ knowing a major price correction is coming and hoping you time it right. It’s a hustle. You’re playing chicken with the masses. It’s fine, because much of trading works the same way. Just admit it – to yourself, above all else.

It’s your money, so burn it if you like. But I hope you don’t truly believe the stuff about your investment portfolio with no more than 20% exposure to alternative and risky assets. Call it ‘gambling’ and I have no issue, but then the truism would stand: In a casino, the house always wins. And this brave new world doesn’t come with a ‘house’ you recognise, yet still the curiosity of the gambler isn’t aroused.

It’s the lack of curiosity that bothers me. I vaguely realise that most folks don’t care to learn the things I get excited about, but I can’t help being bothered by it. The purist in me thinks you invest in crypto as part of a philosophical position, which can be legitimately held with no investment, to be clear. You believe in this decentralised, self-regulating future and want to both be a part of it and enable it. The banker in me bankrolls the purist and knows that speculation has always been a driving human foible, from the gold rush to Wall Street. It’s greed by a different name fuelled by the belief that this is bound to collapse, but as long as it doesn’t collapse on me, who cares?. Well, I do. That belief that you can be an island of success in a burning world, making your margins on the next guy’s poor timing, is how these things have historically worked. But it’s also what some of us hoped platform economics and networks ecosystems would move us away from. At least a little.

The very brokenness we were trying to fix is running riot. Don’t get me wrong – people want to make money … I get it … But the same people who thought subprime mortgages were OK think making big bucks on bitcoin is OK. And they think it on the proviso that the the fall will be taken by someone else, out of sight. There’s a downside. There are losers. Things will go south for many. As long as it’s not me, is the familiar approach. And we can’t blame the bankers for this one, boys and girls. But we can blame the same coldly calculating behaviour that’s evidently alive and well outside the banks.

#SorryNotSorry: I don’t like it. Not because I don’t understand how the markets work, but because I do. And because I refuse to be a cynic about human nature, even though I understand how that works too.

Unpopular opinion #2: Most of the people I speak to now hold bitcoin bought recently and think of it like day trading

They lose no sleep over the future of crypto cash as a concept, they don’t care about the mechanics of encryption that takes a bearer asset into securities territory (fiat money does it, whatevs, buy buy) so they won’t care if a silent divide emerges turning their playground into a fund-raising platform or ten. With everything that goes with it. Leaving these kids to their party and creating a separate and altogether quieter space where some interesting work can be done: self regulating securities, self adjusting coupons for dividend or redemption payments: where the asset, the executable (pay, hold, redeem, don’t do that it’s not allowed) and the rules are layered on top of each other in an exquisite symphony of DLT and APIs. That’s the happy path. Although it’s not exactly rid of the tensions and contradictions of our current money system. Leaving the gamblers to their own devices and continuing some imaginative work on the side. Constrained, sure, but able to still drive change. The unhappy path is the bubble bursts, many get burned by losses blamed on the exchanges being unable to process orders in a timely manner rather than gambles not paying off. Then they turn the blissful ignorance with which they danced into this space into rage against it. It won’t be the first time humans vilify what they can’t understand.

Unpopular opinion #3: We haven’t learned a thing

Here is a network devised to experiment with money supply outside traditional state control and banking distribution. Here is a thought experiment in decentralisation and self-regulation. Here is a technology that permits transparency and democratisation. And between the dark marketplaces and the gold rush of recent weeks, we have shown ourselves to collectively lack imagination – and worse. Humans just do the same stuff, in a different place. We just brought the worst of ourselves onto the blockchain. And truly this is the crux of the matter for me: you were shown the magic of DLT, the possibility of a decentralised, transparent and democratised network of data sets, executables and validations and what you took away from it was Vegas.

I refuse to accept that this is a definitive moment for blockchain, but I fear that it is a definitive moment for human instincts. The last few crashes were blamed on corporate greed and ruthless bankers. This one looks similar, but it’s not on faceless corporations. It’s all on us as individuals. And we ain’t lookin’ too good right now.

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Image by Zenzen, Shutterstock.com

About the author

Leda Glyptis

Leda Glyptis is a lapsed academic and long-term resident of the banking ecosystem, inhabiting both startups and banks over the years. She leads, writes on, lives and breathes transformation and digital disruption. She is a roaming banker and all-weather geek. All opinions her own. You can't have them.

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