The encryption crack looks amazing

Updated at 6:10PM ET May 18, 2022

What do you think of this company? netscape? asked my dad. It was 1995, and they called me on the landline, which at the time meant just the phone. Netscape was a company that created a graphical web browser –The A web browser, really—but give it free. The income statement showed modest revenues (and significant losses). The web was new and exciting but unproven, so I steered my folks away from the Netscape IPO.

Ha ha ha. Netscape’s stock doubled its $28 asking price on the day it went public, making its founders half-billionaires and ushering in the internet age. By the end of the year, the stock had reached $174, and when AOL acquired the company in 1999, just before the Internet crash, the deal was worth $10 billion.

A decade later, and a little later, the new digital “currency” called Bitcoin, launched by computers that solved math problems, was worth less than a dime. Even that price seemed too high. Bitcoin didn’t really exist, nobody accepted it for payment, and it was nearly impossible to create, store and trade it. stupid, I believed. If my parents called me again to ask if they should buy, I would tell them no again. But the $1,000 “invested” in bitcoin at the right moment in 2010 turned into $625 million last year, when the cryptocurrency hit $50,000. So far, as the cryptocurrency market recovers from this month’s massive crash, $1,000 will still be worth over $350 million.

A special acidic feeling revives when you realize you’ve missed out on getting rich without making any effort at all. More intense than jealousy but lighter than remorse, it is the nausea of ​​the soul and not the gut. Netscape, bitcoin (and GameStop and maybe even Tesla) are unexpected fantasies. In hindsight, a fool would have missed the boat only had he been on its lane at the crucial moment.

Now all the losers – like me and my dad (sorry, mom) – are standing ashore with our binoculars, wondering if the USS Crypto is about to sink into the sea. The crash this month happened, at least in a rough sense, when a stablecoin called the tera lost its correlation with the US dollar, an event that you don’t really need to understand to continue reading this article. The final causes were more numerous: inflation and rising interest rates destabilized financial markets in general, and technical securities were particularly volatile. The value of Bitcoin is now down to half of what it was last fall. Many people who bought recently lost their shirts. A lot of people who put their money into other cryptocurrencies lost a lot.

Alas, but also: hurray. I have sympathy for individuals who are suffering, but in the broadest sense, the frustration of “it would have been me” has been replaced by the darkened pleasure and comfort of “I’m glad I wasn’t”. It’s the same schadenfreude that arrives when Antiques promotion The expert says to some Schlemel that a dust bag discarded in a rare book means the difference between a six-figure auction and a cheap auction. It’s too bad, really, but it’s also fair very good.

You can tell that I didn’t buy (and keep) bitcoin at $0.08, because I write articles online instead of polishing the gilded fixtures of my yacht. In order to live with this folly, I told myself many stories. First, I am proud that I did not participate in the scams committed by bitcoin enthusiasts. On the other hand, I’m happy to avoid directly contributing to the energy consumption required to run the blockchain. As for the third, I’m happy to avoid getting involved in the cryptocurrency subculture in general, as society would tend to pay homage if it was a source of massive personal wealth.

But mostly, I take pleasure in the certainty that had I actually figured out how to create and store bitcoins circa 2010 in an online “wallet,” then sure, without a doubt, I would have stored that wallet on a hard drive that ended up crashing or losing the required encryption key. to open it. Losing $350 million in a storm drain would be much worse than not having it in the first place.

I’m sorry – and happy too – to say that the cryptocurrency crash has spread to other online assets as well. Non-fungible tokens are also in distress. Premium NFTs, such as Bored Apes, have lost half their default value, while other, less common issues are declining faster, and trade in these digital goods is slowing overall. Here again, schadenfreude sells for a high price. It remains to be determined whether all this fun, acquired at the expense of sapphires bought only to lose, will continue to expand in the coming weeks – or if it is just a short-lived bubble of its own. Cryptocurrency crash could turn into another boom at any moment. It’s happened before. Supporters urge fellow believers to “buy the plunge” and keep the faith, and that faith is sometimes rewarded.

Whatever happens, the curvy history of cryptocurrency shows that foolish risk-taking creates its own aesthetics. The cryptocurrency investor does not provoke indirect excitement, such as a stuntman jumping on motorcycles or a daring mountain climber, because his keyboard antics do not seem to require much skill. It’s more like a track bettor choosing a winning horse at random, or a country club jerk hitting a lucky hole in one. Watching him may surprise you with his cosmic luck – an athletic excellence. But no one would describe his victory as a beautiful achievement.

That’s why we ended up feeling nauseous about the success of the crypto bro: it’s so unearned, it just makes us sick. But our schadenfreude is the product of the same delusion. We don’t enjoy our prudence, so much as we indulge in a lame form of grandeur. The phrase “it could have been me” was a lie from the start: Sure, we might have won 10,000 times – and then lost it all a few years later – but maybe not. If people and I had bought Netscape in its initial public offering, we would now no longer be wealthy. We would put in a few thousand dollars, at most, and then sell our stock when it tripled or quadrupled in value. We’d make a little money and we’d be happy. As for cryptocurrencies, I bought a thousand dollars for some time and came back and fell in half. what ever. The fantasy of failing to make huge gains, and then also avoiding bankruptcy, tempts us twice. The truth is more trivial: can never It was me.


This article originally stated that the crash occurred when a stablecoin called Tether lost its peg to the US dollar. The crash had more to do with another stablecoin, Terra, which also lost its peg.

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