Episode Summary
From a policy standpoint, probably the biggest difference between Donald Trump’s first and second administrations has been his total allegiance to the cryptocurrency industry. It was a huge shift from 2021 when he argued that Bitcoin “seems like a scam” that was “not money” and could be used for narcotics transactions.
All of that is out the window now. In addition to pardoning drug kingpins like Juan Orlando Hernández, Trump, his wife, and his sons have been rolling out numerous cryptocurrencies of their own. And as you might expect, every single one of these virtual assets have declined massively in value since their initial hype cycle.
If you think about the history of cryptocurrency, however, the fact that Trump and his cronies have changed their views about them makes a lot of sense. Not only was Bitcoin initially marketed using anarchist libertarianism, but the industry it inspired has become completely dominated by the exact sort of plutocrats that have always bankrolled the reactionary conservatism that cemented its control of the Republican Party after the Tea Party movement of the 2010s.
Joining me today to discuss what’s happened with all this is Molly White, a bane of crypto scammers everywhere. She’s the creator of Web3 is Going Just Great, a project that tracks the crypto industry. She’s also got a separate interest in Wikipedia, which has recently come under massive attack by some of crypto’s biggest schemers like Elon Musk. These two episodes are linked in my opinion, as you’ll see in our discussion.
The video of our conversation is available, the transcript is below. Because of its length, some podcast apps and email programs may truncate it. Access the episode page to get the full text. You can subscribe to Theory of Change and other Flux podcasts on Apple Podcasts, Spotify, Amazon Podcasts, YouTube, Patreon, Substack, and elsewhere.
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Audio Chapters
00:00 — Introduction
03:10 — A brief history of cryptocurrencies
08:46 — How Wikipedia’s volunteer system works
11:37 — Why Elon Musk and far-right Republicans hate Wikipedia
15:47 — The emotional worldview of crypto advocates
18:22 — White’s backstory
22:45 — Bizarre crypto stories and celebrity rug pulls
25:43 — The two-class structure of crypto: sellers and victims
34:11 — Why crypto whales hate Wikipedia’s more realized decentralization
38:17 — Talking with crypto advocates
45:52 — Analyzing Trump’s about-face on crypto
51:50 — Does crypto have a legitimate purpose?
54:54 — Network states and the billionaire escape fantasy
Audio Transcript
The following is a machine-generated transcript of the audio that has not been proofed. It is provided for convenience purposes only.
MATTHEW SHEFFIELD: And joining me now is Molly White. Hey, Molly, welcome to the show.
MOLLY WHITE: Thanks for having me.
SHEFFIELD: Yeah, so we got two big topics on deck here for today. And in a lot of ways the culture of Wikipedia and the particulars of crypto, I think it’s safe to say that most people are not particularly enmeshed in these things.
Why don’t we just start with, if you could give us an overview of the history of cryptocurrency, where it came from and why are there always so many proliferating cryptocurrencies since Bitcoin, the supposedly master currency?
WHITE: Yeah. So I mean, cryptocurrency really came about in 2008 to 2009 with the advent of Bitcoin which was the first cryptocurrency and remains one of the most dominant cryptocurrencies. And it was created with the idea of changing how people transact digitally financially. The idea was that, unlike a cash transaction where you can hand someone $20 and there’s no record of that ever happening and it’s completely private, there’s not really a great way to do that digitally.
And [00:04:00] so the idea was that Bitcoin would be this peer-to-peer cash system. And, there was sort of this ideological belief behind it that it would help to eliminate the government’s role in surveilling financial transactions or even interfering with financial transactions. This all came about sort of in the wake of the great financial crisis where there was a lot of distrust in the government and anger at how that whole situation had happened.
And so, it sort of emerged as this sort of “cipher punk” way of transacting money using the internet. But over the years it has really evolved into something quite a bit different, I would say, where there’s now this entire realm of cryptocurrencies, thousands upon thousands of them.
Many of them are based on Bitcoin, but many of them are based on different systems. And, pretty much anyone can create a cryptocurrency and therefore people have in great numbers. And they have really transformed, or I’m not sure if they ever were really the, digital cash that Satoshi Nakamoto, the creator of Bitcoin had written about. They’ve sort of never really, especially Bitcoin has never really functioned in that way.
But now, the primary use case I would say for cryptocurrency is speculation. Where people are speculating that the price of this token will go up or down, and making trades based on that.
SHEFFIELD: Yeah. Well, and the idea of these assets going up or down, like they’re not tied to anything [the creators actually control] in particular. So it is entirely speculation. I mean, like that’s, that is a fundamental difference between current, actual currencies issued by nation states. That they’re at least based on some approximation to reality, whether, depending on how, even the most inflationary currencies are still at least [00:06:00] issued by something that is accountable in some way, shape, or form.
Whereas, like the inherent idea of buying a cryptocurrency as an investment vehicle, it, makes no sense at all. Except if you can get suckers, that’s what it seems like.
WHITE: Well, I mean, yeah, if, if you believe that you can buy an asset and then later sell it for more than you’ve purchased it for, I think a lot of people are willing to make trades based on that, regardless of whether there are sort of fundamentals that cause a currency or an asset to, to go up or down in price.
People are willing to speculate on just about anything I would say. And Bitcoin and other cryptocurrencies have certainly enjoyed quite a lot of popularity in that sense, even though they’re not issued by a government or a company or any sort of centralized entity.
SHEFFIELD: Yeah. Well, the currencies themselves are centrally issued.
WHITE: Yeah.
SHEFFIELD: But at the same time, that is, I think also why hype is so endemic to these ecosystems, because that is literally all they have to determine evaluation. It isn’t that some new mineral was discovered in the country, or that they developed some new manufacturing plan or something like that. The worth of a cryptocurrency is entirely dependent on the feelings of the people that buy it. Am I just making that up?
WHITE: No, I mean, I think that’s absolutely true. I mean, obviously, especially now that there are so many cryptocurrencies, there are different versions that you could say, oh, well this one’s tied to this company that’s trying to do this thing, or, a stable coin that’s tied to, it’s pegged to some other asset.
But I think you’re right, especially when you’re talking about, Bitcoin, Ethereum, Solana, some of the major cryptocurrencies that are really not tied to anything in particular. It is based on hype, and [00:08:00] certainly that’s the case with meme coins and other sorts of tokens which are basically intended to be completely dependent on hype, and therefore subject to these massive swings in price as people either pay attention to them or forget about them, usually forget about them.
But, that is really the goal is to attract as much attention and as much interest as possible so that people, early buyers can profit from those who learn about the token somewhat later.
SHEFFIELD: Yeah. Well, and it’s, that’s probably why a lot of people hate you, Molly, I would guess! That you are a hype deflator. And that’s the only thing that they really have.
And we’ll circle back to that.
How Wikipedia’s volunteer community works
But okay, so then the other thing though, the other main research interest that you have is in the culture of Wikipedia.
So, obviously everybody knows what Wikipedia is, but maybe just give us a little brief overview of the site and how it works and just how few people actually are editing it.
WHITE: Yeah, so Wikipedia is an online encyclopedia. It is maintained by a community of volunteers who edit the articles they write them, but also just sort of improve them gradually over time. And it’s a very collaborative project, it’s that the tagline is the encyclopedia that anyone can edit.
And the idea is that anyone, you or me or anyone, can begin contributing to the project as this free and open source of knowledge that is ideally covering, any topic that people might be interested about that, fits the notability criteria and, is suitable for an encyclopedia.
SHEFFIELD: Mm-hmm. Yeah. And but, and not very many people actually do it though, which is the interesting thing about Wikipedia is that every, everyone uses it. But no, almost no one edits it.
WHITE: Yeah, the number of readers is, far, larger than the number of editors, [00:10:00] especially if you look at, active long-term editors versus, people who come by and fix a typo and then never edit again. It is a relatively small community of editors that, that maintain the site.
SHEFFIELD: Yeah. And what’s interesting, I think also about that community is that I mean, Elon Musk, I think has crystallized, I think that a lot of people on the political right strongly hate Wikipedia. Actually and that’s something that right wingers have, been kind of concerned about for, I mean, since the origin of this site, when it first launched in, what was it, 2005, I think or maybe a little earlier, but whenever it was.
WHITE: I think 2001.
SHEFFIELD: Okay. Well, whenever it was like the, I remember, and I wrote what I wrote about it when I was a columnist at the conservative Washington Times that there was a “Conservapedia” that was started. And it still exists now to this day because they argued that Wikipedia has a liberal bias. And that’s something that Elon Musk has been really hammering quite a bit recently. And in fact, he launched his own Republican flavored sort of, I guess that’s what he kind of is. Well, he’s claiming that it’s neutral.
WHITE: Right.
SHEFFIELD: And of course it is! But when you look at it the Grokipedia as he calls it, which God, that sounds like something that you would vomit up after a hangover or something. But it’s largely, basically is flattering to his personal obsessions—and otherwise it’s just kind of a regurgitation of Wikipedia.
WHITE: Right.
Why Elon Musk and far-right Republicans hate Wikipedia
SHEFFIELD: But it’s interesting though that-- and I think it’s probably fair to say, and, you can correct me if I kind of wrong, but you know, I think that it is fair to say that because Wikipedia is often, has lots of articles about science and about history and things like that, that the people who are contributing to it tend to be people that are more, let’s say, [00:12:00] extrinsically oriented that actually have to be concerned about facts and coherency and structure and be able to write well in, an understandable way.
And, that might if Stephen Colbert was right, that probably is going to make some people who are religious fundamentalists or market fundamentalists feel excluded. I think that might be fair to say. What do you think?
WHITE: Yeah, perhaps. I mean the, sort of the fundamental principle of Wikipedia is that editors who are contributing to articles are not writing their own knowledge or their own research or their own beliefs. They are collating reliable sources. And what those sources have to say on a topic. And those sources don’t necessarily all have to agree.
there can be multiple viewpoints on any given topic that are all represented, in due weight to, the prominence of those viewpoints. Which I think theoretically should allow people of very different perspectives and backgrounds and viewpoints, and ideologies to collaborate on the encyclopedia in a fairly productive way.
And I would say generally it, it does, I’ve spent a lot of time editing Wikipedia, and I’ve worked pretty regularly with people who have stated that, their viewpoints are very different from mine or they come from a very different background. But because we all agree on the way that articles should be written and the process by which disputes should be resolved, it actually works fairly well.
I think the problem is that there are people, Elon Musk included, who really disagree with that approach to writing an encyclopedia. The idea of neutrality as Wikipedia treats it, that basically, treating all reliable sources in, in, in, [00:14:00] weighted as, due to their prominence of those viewpoints really does not seem to jbe well with, Elon Musk and others who essentially have redefined the idea of reliability for a source or who have decided that various sources should be considered reliable if Wikipedia does not consider them to be, they have very strong opinions on bias in sources that they think should preclude a source from being used or, change how it’s treated.
And so, rather than come in and join Wikipedia as editors or contribute to this editorial process, they’ve decided essentially that Wikipedia is a lost cause. We can’t. Save it or we don’t want to. So we’re going to create this replacement of it that has, no real clear editorial structure.
for example, Wikipedia does not have the very transparent policies and guidelines that Wikipedia has. But that can be shaped to reflect viewpoints that they prefer, whether it’s about topics that relate to them personally. I know Elon Musk has had sort of longstanding issues with how the article on him on Wikipedia has been written.
And sort of the, he seems to have decided that Wikipedia will be the solution to that and he’ll just make it say what he wants it to say. Or whether it’s, political beliefs that they have that they think Wikipedia is not reflecting honestly. The solution has really been to just replace Wikipedia with a version of it.
And, it is really a version of Wikipedia. Wikipedia has sourced many of its articles directly from Wikipedia and reused them and then sort of shaped them in the way that they wish Wikipedia would.
The emotional worldview of crypto advocates
SHEFFIELD: Yeah. Yeah, that’s right. And it is interesting to me because I, think that there is a, common epistemic orientation between that motivation of Musk and people like him and [00:16:00] why they also like cryptocurrency. These are people that, I mean, there, there is this tremendous irony I think, in that their worldview is extremely emotional. And, it is entirely intuition driven almost. And that they, proceed from their beliefs first and then go to, well, what facts should be discussed, should be allowed to be discussed, rather than saying, well, let’s figure out what facts are and then shape our worldview.
And so that, I think is, why they hate Wikipedia so much. And also why they love crypto so much. I mean, what do you think?
WHITE: Yeah, I mean, I do think that, crypto is very attractive to people who have very strong ideological beliefs, whether it’s about currency and how currency should operate or governments, and the degree to which governments should be involved in day-to-day financial transactions. But crypto really enjoys this almost religious community of advocates and enthusiasts who really love their currencies of choice and, could be all cryptocurrencies or sort of a subset of them with this almost religious fervor that is not particularly susceptible to reason I’ve found. And a lot of times when people do discuss cryptocurrencies from either an economic perspective, a technological perspective, a sort of, fact-based perspective, they’re met with an incredibly hostile response as though you’ve attacked their, friend or something like that.
There’s this very strong attachment to it that is very emotional, as you say, rather than, the types of emotions you tend to expect from financial instruments. most people, I would say are not incredibly emotionally attached to treasury bills or, any, I would say [00:18:00] stocks, but I, now that we’re in the sort of meme coin or meme stock era, there is actually sort of a very emotional attachment to some stocks as well.
But you know, most people are not emotionally attached to SPY or, just sort of like basic financial instruments like that, in the way that you see people very attached to cryptocurrencies.
White’s backstory
SHEFFIELD: They are. Yeah. And, we’ll circle back to that in a bit, but I did wanna, before we get into that, I did want to talk about your own personal interest in both of these topics. So like, how is it that you got into them? Because I think that they’re related. But I’m interested to hear your backstory on that.
WHITE: Yeah, well, I got involved with Wikipedia when I was very young. I was, I think 12 or 13 years old, and I discovered that the encyclopedia that anyone can edit included 12 year olds. and so I began editing when I was pretty young and then developed a real love for it a little bit later in my life.
And, have been a very active editor for probably 15 years now. it’s, something that really spoke to me as an opportunity to contribute to an open and free, resource that would be available to people who maybe don’t have access to a college education or a well stocked library or, any sort of many of these resources that are difficult to access. And so, that was sort of how I got into Wikipedia.
I got into cryptocurrency and, researching cryptocurrency quite a bit later. It was, I think, 2021 or so. At that time I was working as a software engineer. I had. Spent a lot of my time working on web software and people had really started to talk up this idea of Web3, in 2021 or so which was the idea that cryptocurrency was gonna solve everything that’s wrong with the web.
the idea of the web really centralizing around a small number of companies these sort of walled garden [00:20:00] social networks. The inequality of how people are able to in interact on the web and the, power dynamics that exist there. And I was originally like kind of interested because I do think there are a lot of issues with the web.
I’ve been a lifelong lover of the web and also a critic of the way the web has sort of evolved. And so I was interested in learning more, but as I learned more, I learned more about cryptocurrency, more about the hype that was happening, which was extreme in the sort of 2020 to 2021 era where, there were Super Bowl ads and all kinds of marketing, trying to encourage retail, everyday people to get involved in purchasing cryptocurrencies.
