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They're back. As the crypto bear market worsens, the haters are coming out of the woodwork again to sneer at an industry they've long insisted was nothing more than an overhyped scam.
Veteran crypto users have seen this movie before. It happened in 2010, 2014, 2018, and it's happening right now: Media pundits and casual observers—many of whom know nothing about crypto—are trotting out the same tired talking points to say that they've been right all along.
At Decrypt, we report on the good, the bad, and the ugly of the crypto industry—and we're the first to admit that lately there is plenty of ugly. But we believe that crypto is fascinating and here to stay. And with the recent slew of mocking headlines celebrating the crash, it's deja vu all over again.
With BTC down almost 80% from peak (from 20K to ~4K) & all other cryptocurrencies down 80% to 99% I rest my case that this crypto bubble went bust for good. I feel vindicated. So I will take a break for a few days from this toxic Crypto Twitter. Waste of time to convince zealots
— Nouriel Roubini (@Nouriel) November 20, 2018
Happily, we’re here to help. Next time an "expert" at a dinner party starts mansplaining why crypto is nothing but a scam for suckers, point them to these retorts. Print it out. Fold it up and put it in your wallet. Laminate it and use it as a placemat. Tuck them under windshield wipers at the bank. Anything to shut these folks up—plus, it'll keep your blood pressure down.
Rebuttal: Are some token projects and shitcoins Ponzi-like scams? Absolutely. But you could say the same thing about many thinly-traded penny stocks and other high-risk investments. In the decade-plus price history of Bitcoin and other top tokens like Ethereum and XRP, their value has never gone to zero—which is what happens in a Ponzi scheme. Instead, each has recovered from multiple bear cycles to surpass previous highs.
Rebuttal: Since the dollar went off the gold standard in 1971, the dollar isn't backed by anything either. Bitcoin has value because of the uses of the technology behind it. And legitimate crypto projects are backed by large and growing online communities whose wealth and influence now exceeds those of some small countries.
Rebuttal: Hacks happen when people fall victim to phishing scams and give access to their wallet, just like similar scams in tradfi, outside of crypto. Novices and crypto newcomers who use safe platforms such as Coinbase or Gemini or FTX haven't lost a penny to fraud.
Well frens it happened to me. Got phished and had 4NFT stolen. @BoredApeYC @opensea @doodles @yugalabs please don’t buy or trade these while I work to resolve:@DarkWing84 looks like you bought my stolen ape- hit me up so we can fix it pic.twitter.com/VL1OVnd44m
— Seth Green (@SethGreen) May 17, 2022
Rebuttal: The internet was invented in 1969, and the first consumer web boom—the one that preceded the dotcom crash—didn’t happen until the mid-1990s. By 1995, there were only 40 million people on the Internet. Bitcoin already has over 100 million users worldwide. The widespread use of mobile web, apps, social media, and e-commerce (what crypto people refer to as Web2) didn’t truly happen until the creation of the iPhone in 2007. That's 18 years into the web. Bitcoin is only 13 years old.
Rebuttal: The same is true of $100 bills or gift cards, both of which are popular with drug cartels. While Bitcoin and other cryptocurrencies have become a favorite payment method for certain types of crime, particularly ransomware, the number of criminal transactions as a proportion of overall crypto activity is relatively small and shrinking every year. Moreover, law enforcement has recently done on multiple occasions what was once thought impossible: tracked down and recovered stolen crypto. Finally, data in 2019 from Chainalysis and the United Nations Office on Drugs and Crime found that for every dollar in Bitcoin spent on the darknet, $800 in USD is laundered.
Rebuttal: Blockchain applications are useful whenever something can be improved or made more efficient through decentralization, such as the ancient software banks use—which is why even banks are testing blockchains. Distributed ledger technology has already become an integral part of the tech stack.
Rebuttal: It's true that Bitcoin hasn't caught on as an everyday payment mechanism. The currency is still volatile, and even small crypto payments—including for a cup of coffee—can trigger tax obligations. Bitcoin and crypto payments are still not ready for prime time. But blockchain technology is evolving rapidly and there have already been major breakthroughs on the payment front in the form of non-volatile stablecoins such as USDC, Lighting, and other payment rails built atop blockchains, and pending bills in Congress propose tax exemption for crypto transactions under $200.
Rebuttal: Bitcoin's energy-intensive design is not representative of the vast majority of blockchains, which employ a technology called "proof-of-stake" with an exponentially lighter environmental footprint. Ethereum's migration to proof-of-stake will be complete by the fall. And Bitcoin miners are increasingly acknowledging the need to shift away from fossil fuel-based energy to solar or other forms of clean power.
Rebuttal: Compared to familiar apps like Instagram or PayPal, prominent Web3 services like OpenSea or MetaMask can feel janky or exasperatingly complicated. As for gaming—a field where Web3 has the potential to be a natural fit—the most prominent crypto initiatives (such as Axie Infinity) are simplistic affairs that prioritize hawking tokens over fun. So Web3 isn't pretty or easy yet, making this the most valid lingering criticism. But the good news is everyone in crypto knows it. Web3 builders correctly point out that the top priority for the industry has been backend infrastructure rather than user experience. Now that the infrastructure is in place, this is changing and new tools are focused on terrific UX. When the next crypto boom arrives, Web3 design will likely have already made a giant leap forward.
Click here for a printable PDF of the crypto defender's placemat.
