Three Pieces, May 2025
Bad crypto threatening good crypto, two protocol fictions
I’m going to be at the Edge Esmeralda pop-up city all week, so say hi if you’re around and run into me. I’ll be helping run the Protocol Worlds programming there, much of which is open to all attendees.
The Contraptions Book club May pick is The Printing Revolution in Early Modern Europe by Elizabeth S. Eisenstein. Discussion week has kicked off here. The June pick is Monkey King: Journey to the West.
Another week where I couldn’t get my own essay done in time, so sharing a few pieces I liked instead. I’m going to make this “three pieces” format a standard for weeks where I can’t get my own shit together in time to ship an original essay.
After this week, I should be done with travel for several months, so I hope to get into more of a writing groove and get a bunch of pieces out the door.
First, I want to share
’s post on the the state of crypto. Tough medicine that people in the scene need to swallow. This is not your regular incoherent techlash criticism, and isn’t solely a criticism of crypto by itself, but about the particular toxic combination of the casino side of crypto and the Trump administration’s extraordinary talent for grift and croynist corruption.
The piece links to his NYT op-ed, co-authored with Dan Davies, arguing that crypto is a threat to the US financial system. The way Trump is playing it, it’s hard to argue otherwise. That it needn’t be this way is a moot point. Farrell and Davies also have separate substack essays linking to that op-ed, elaborating on the argument.
Given what’s been going on, it’s hard for all but the more naive and uncritical of crypto enthusiasts to pretend current political developments are positive, despite the numbers going up on the speculation side of the game. What’s going on begs the whole question of the political philosophy premises of crypto.
If you think the technology is about decentralization and censorship/capture resistance, rather than speculation and political patronage, this is a bad trajectory. I’ve been remarking to my friends in the crypto world about the Trump regime’s embrace of crypto that we’re in a situation of “with friends like this, who needs enemies?”
On a more pleasant front in the world of protocol technology, the second and first place winners of our Terminological Twists protocol science fiction contest are out.
In second place, a fun story about getting back to square one with AI labor substitution.
And in first place, a story about what might happen if the world were run by neighborhood-noise-hating people like me.
That’s it for the week. I’ll get back to regular programming next week.
As someone who works in "crypto" for lack of a better word, I very much agree with you on the Trump/crypto nexus. Anyone who thinks it is good or progress for the space is fooling themselves. Number might go up now, but when the backlash hits (and it will, probably in 4 years or less) it's going to be harsh and indiscriminate and will make the Biden admin look reasonable in comparison. I don't think it will completely annihilate the space, but it will be a long winter.
Taking a step back though, I do find the whole dynamic kind of interesting. A decade and a half ago, many people in the crypto space thought that the biggest threat was a direct crackdown. But actually the most dangerous government bad actors have been those that partially integrated with the space to use it, instead of attacking it directly. I'm thinking of North Korea and Trump specifically here. With the former putting a lot of effort into stealing anything that isn't bolted down and the latter exacerbating the worst tendencies of the space for his direct enrichment.
In both cases, the entities involved are so large and powerful they don't need to directly rely on the tools of the space to protect themselves. Unlike a lot of smaller bad actors, they can act with impunity even if they are publicly observed. See how NK used Tornado Cash for instance - not as a way to hide themselves long term, but to just disrupt direct tracking of funds in the short term so they can move it into cash quickly. Their long term strength/protection comes from their nation-state power not anon/psudonymity or censorship resistance, so they are happy to sacrifice the long term viability of the space for immediate gain.
I'm not sure what the best way for the space to handle this kind of attacker is, but I think the key is to use their size, obviousness and public hate for them against them. As I recently read on a tweet by Vlad Zamfir, "decentralization doesn't imply non-interventionism" and these attackers should be easy to build consensus against. If you could somehow put it to a vote, I'm sure 90+% of the space would love to ban NK or Trump, there just isn't a good mechanism for this kind of organizing. I've seen hints of it in the Privacy Pools proposal where users can individually exclude themselves from interacting with known bad actors in a decentralized way. Maybe this mechanism can be expanded and strengthened.
A critique of this is that these actors can try harder to be anonymous so they can "blend in with the crowd", this would make it a lot harder to organize against them. However, I would say that forcing them to do this would be a big improvement - it would make them act much slower and more carefully and limit the amount of harm they can quickly do.