In the grand tradition of conceited dudes inventing unnecessary shit, forcing it on the entire world, and then acting deeply shocked when their plans inevitably go awry (see: Facebook, the British Empire), the Cryptocurrency economy is officially majorly fucked up. On the off chance none of the bros you know spent most of 2017 bragging about investing in Bitcoin early, here’s a quick recap.
Cryptocurrencies, the most prominent of which is Bitcoin, are blockchain-based currencies that allow users to make payments and store their funds using a supposedly uncrackable code. The goal was to eliminate the need for banks by replacing the current financial system with a public, unhackable history of all transactions ever. Shockingly, replacing a financial system regulated by actual laws with a worldwide Venmo feed isn’t working out perfectly.
Bitcoin was created in 2009, and there are now thousands of random cryptocurrencies, many of which are failures or frauds, in circulation. At its peak, a single Bitcoin was worth about $20,000, and now hovers around $8,000, so the value of a cryptocurrency is even more volatile than your feelings about your diet. Because cryptocurrencies’ valuations are influenced by hype, a bunch of dudes thinking their bitcoin is like, so fetch, inspires the Dow to actually make fetch happen. Unsurprisingly, this does not make for an extremely stable form of currency and thus has led to a proliferation of scams, failed companies, and actual violent crimes. Let’s discuss a few of the worst examples of cryptocurrency creating problems that did not need to exist.
1. Straight Up Frauds
In May, the North American Securities Administrators Association announced that it is investigating over 70 initial coin offerings and cryptocurrency companies that might be total scams. These include websites advertising cryptocurrencies that literally don’t exist, which unsuspecting customers purchase only to discover their money has been stolen. According to the research firm Ernst & Young, 10% of all money invested in initial coin offerings is stolen. The DOJ has launched a probe into whether cryptocurrency traders illegally inflate and deflate the value of their coins. In South Africa, a single fake cryptocurrency company stole over $80 million dollars from clients who were promised 50% returns on their investments. Basically, the system in which we let bros decide how much their money is worth inspires them to lie and steal. Why am I not shocked?
2. Failed Crypto Companies
While not all cryptocurrencies are totally fake, many of the real ones are embarrassing failures. In 2017, 418 out of 902 initial coin offerings ended in bankruptcy and investors losing massive amounts of money. Bitcoin News literally called 2017’s ICO history “a digital graveyard of broken promises,” which makes me imagine a bunch of dudes crying over a video game cemetery and that is honestly hilarious.
3. Trying to Turn Puerto Rico Into a Crypto Bro Playground
Because they are literally the absolute worst, a group of freshly crypto-rich bros is trying to build a new society run on the blockchain in post-hurricane Puerto Rico. Instead of using their billions of dollars to, I don’t know, bring food and electricity to the communities ravaged by Maria, many of which still lack power and access to medical care, these dudes are buying property to build a luxury society where they conveniently don’t have to pay capital gains taxes. For sure.
One of the vanguards of the movement to create this mini-city, which was initially being called “Puertopia” and now is being called “Sol” because “Puertopia” literally translates to “boy paradise” (I actually cannot), is Brock Pierce. Besides the fact that “Brock Pierce” sounds like the name of the date rapist scion of a WASP-y family probably built on financial crimes, this man is shady as fuck. A group of employees at Pierce’s former company Digital Entertainment Network alleged in a lawsuit that he ran a child sexual abuse ring, which is horrifying. After settling that lawsuit, he started a video game based cryptocurrency company I don’t care about enough to fully understand, which eventually hired noted Joseph Goebbels impersonator Steve Bannon as CEO. I actually don’t know if I’ve ever heard a bio rendering someone less qualified to lead a new society.
When asked about his vision for the crypto society in Puerto Rico, Pierce’s business partner said, “I don’t want to pay taxes…This is the first time in human history anyone other than kings or governments or gods can create their own money.” If you weren’t convinced this was going to end like all acts of colonialism—horribly—I hope this dude comparing himself to a literal god convinced you.
4. As If We Need a New Source of Fossil Fuel Emissions
Because of our society’s inability to stop using fossil fuels and Trump’s obsession with inciting climate disasters in order to give about 500 former coal miners day jobs, climate change is encroaching faster than ever. The last thing we need is a completely new technology that runs on fossil fuels, but that is exactly what cryptocurrency is. Cryptocurrencies are created using huge amounts of computer power, which just means they guzzle electricity. Mining one bitcoin uses the same amount of electricity as the average American household does in two years. If cryptocurrency processing continued to grow at its December 2017 rate, the network would use more electricity in July 2019 than the ENTIRE UNITED STATES DOES TODAY. Sorry for caps, but seriously an electronic currency literally no one asked for could emit as many fossil fuels as this godforsaken country already does.
5. Theft & Literally Murder
Lastly, we have the extremely violent crimes made possible by cryptocurrencies. The anonymous nature of the blockchain makes it hard to track down criminals, which has inspired people to use the currencies to do illegal shit. An Illinois woman having an affair with a married man paid a hit man in Bitcoin to murder her boyfriend’s wife, and a woman in Italy paid someone in Bitcoin to kill her boyfriend.
People are also engaging in violence in an attempt to steal other people’s Bitcoin. There have been multiple instances of people held at gunpoint and forced to transfer their cryptocurrency to thieves, and a South African boy was kidnapped and held for ransom to extort his parents for Bitcoin. Oh, and in what is being called “the biggest heist in the history of Iceland,” robbers stole $2 million worth of computers to mine bitcoin.
Bitcoin Success(ish): Akon’s Akoin
Earlier this year, Akon announced at a blockchain panel (sounds lit) that he wanted to create a “real life Wakanda” fueled by cryptocurrency called…wait for it….the Akoin. We hesitate to call this a fail because 1) it’s the best idea we’ve ever heard and we fully support Akon in all his endeavors and 2) it has not failed! I mean, it hasn’t succeeded either, but credit where credit is due. Akoin’s website says that an “Akon Crypto city” is currently in the works on land the rapper was gifted by the president of Senegal so….there’s that! Akon’s vision is to revolutionize the African economy through cryptocurrency, and is building off his Lighting Africa project, which is looking to make Africa run on solar panels. A pun-based economy with the aim of helping some of the world’s poorest countries? Alright, Akon. We’ll allow it.
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