Market meltdowns, a failure of leadership at both the state and corporate level and a disruption to human civility are all built into the crypto mindset following the recession of 2007-2008. It explains why the relatively small enclave of Crypto Twitter was weeks ahead of the global pandemic, with crypto’s thought leaders urging people to prepare for the worst.
Now that the worst is here, these harbingers of doom feel vindicated.
“The word you’re looking for to describe those tech Twitter personalities who you spent the last month mocking and who have been proven right on CV-19 is ‘Cassandra,’” Nic Carter, a partner at Castle Island Ventures and lover of the classics, tweeted yesterday.
Once-trusted sources of information, from media to presidents and prime ministers as well as international health organizations, have all failed in preparing the world for Coronavirus. And now, the call to “decentralize or die” has never taken on a more literal meaning.
“Most companies in the [crypto] space have become relatively quicker to react and prepare for the virus than some other industries,” said Anil Lulla, a founder of Delphi Digital, said in a direct message.
Twitter, crypto’s public square, has helped reinforce the need for decisive action ahead of the pandemic, with prominent voices like Ryan Selkis of Messari sounding the alarm early and often. Selkis wrote on Feb 8 about why the virus could be a big deal, and set company work from home policies March 3, well before most businesses, crypto or otherwise, had taken that step.
To some extent, this skepticism of centralized systems has better prepared crypto firms and proponents for what lies ahead. Despite the anxiety rampant on social media, when queried individuals in the crypto sphere are treating the coronavirus pandemic as a “Life Changes! Be Ready” event.
“Bitcoiners don’t seem fazed much,” said Christian Langalis, who works for Urbit but gained prominence as Bitcoin Sign Guy.
The preparedness mindset and crypto have long had close ideological associations, said John Ramey, former Innovation Adviser to the Obama White House and founder of The Prepared, a site with a full-on guide to getting ready for the worst. The Prepared is a likely onramp for people looking for information on how to wait-out a crisis.
“People drawn to crypto don’t believe in central government fiat currencies, and recognize the risks in our institutions and systems,” he said. “That spirit is alive in the preparedness community. It’s two sides of the same coin.”
Ramey has a three-point set of guidelines to prepare for any contingency. First, and most important, is for people to get their personal finances in order. Stocking up on food and essential goods and learning how to medicate yourself are secondary and tertiary (though still essential) concerns.
“Even if you have to move quickly in an acute event, there is value in keeping cash aside if you have a choice to do so,” Ramey said. “You have to be ready for the cascading economic effects.”
Personal finance is a key concern for coiners; in fact, it’s the bedrock of the industry. “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party,” Satoshi, bitcoin’s unknown creator, said when introducing the idea of the first trustless digital currency.
Norwegian bitcoiner Hodlonaut said, “I have done very little really [to prepare for the coronavirus.] Norwegian society is pretty robust, it’s hard to see that food supply will become an issue and we have very high quality tap water in unlimited supply.”
“I just hodl my bitcoin (BTC) like always,” he added.
Likewise, Ramey said that people rushing out to buy toilet paper and hand sanitizers “aren’t preparing, they’re reacting.”
“People can come into preparedness from different angles, but it all boils down to understanding the world is fragile and the responsibility is on you,” Ramey said.
Hector Rosekrans, client advisor for bitcoin software firm Casa, is building systems that allow people to maintain control over their money in times of financial crisis.
“While COVID-19 can impact operations at centralized custodians, self custody is not impacted,” he said. “With certain multisig setups you can safely keep a key at home, without risk losing funds in a physical attack.”
Concentration risk is something Anil Lulla is facing head on, as he lives with two of his Delphi Digital business partners. “Our apartment has severe concentration risk as far as our business goes,” he said. “We’re all trying to social distance from other people to the best of our abilities and have stocked up on a month of food supplies as well as medicine.”
He also said they’re taking measures to self-medicate in the event one of them gets sick, to not take up hospital space or medical attention that could better serve someone else.
Likewise, Amber Baldet, CEO of Clovyr, said she’s taking precautions to limit the spread of the coronavirus in her Brooklyn, NY community. “I work with financial risk, and my family works with technical risk. We’re generally risk-averse people,” she said. As a young and healthy adult she said she will likely be spared the worst of the coronavirus’ effects, though she’s staying home and cancelling a trip to New York in order to mitigate the spread of the virus.
Many, like Jake Chervinsky, counsel for decentralized finance startup Compound, have seen little disruption to their daily habits – except more frequent handwashing.
“Luckily, I often work from home since our office is in [San Francisco] and I’m based in [Washington] D.C.,” Chervinksy said. “I wouldn’t say I’m exactly self-quarantining at this point, but I’m prepared to do so if necessary.”
Compound instituted a “remote-encouraged” policy and has begun cancelling non-essential in-person meetings this week, he said.
Flatten the curve!
The phrase “flattening the curve” has also had viral spread. The idea is to slow transmission rates through quarantining and social distancing, Ramey said, thereby limiting the chance the healthcare system gets overloaded.
“I’ve been self-quarantined for basically a week [and] told everyone I knew to stock up over a month ago,” Nic Carter said over Telegram. “The U.S. is on a trajectory to become Lombardy/Wuhan within a couple weeks so it’ll happen regardless.”
Still, Carter questions the assumption that the economy’s health should come before public health, as some in traditional finance have been arguing. “The economy is downstream from the virus, which could kill millions – a down economy probably wouldn’t.”
Carter thinks the virus is a “black swan” event that was due to disrupt debt-bloated markets, probably for the better. It’s what attracted him to the currency in the first place.
“Bitcoin’s primary critique is against phony markets,” Christian Langalis said. “That it was a virus which served as the pin seems fitting given our highly internationalized economy.”
“When one blows up spectacularly, it really just confirms the thesis,” he said.