Ethereum’s Dark Underbelly Shows That Even in Crypto, Trust Matters

Laura Shin’s book “The Cryptopians” drives home the reality that the human element is at least as important as it is in traditional fields.

AccessTimeIconApr 18, 2022 at 6:14 p.m. UTC
Updated May 11, 2023 at 4:50 p.m. UTC
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When it was released last month, “The Cryptopians” caught some buzz for a handful of juicy revelations about behind-the-scenes conflict during the development and launch of Ethereum. But the book, written by longtime crypto reporter and podcaster Laura Shin, has a lot more to offer than dirty laundry. It may be the best book about the crypto industry by a journalist so far.

I say that with apologies to Jeff Roberts, whose “Kings of Crypto” is similarly excellent and arguably written with a bit more outward verve. Shin takes it by a nose simply because her iconoclastic subjects keep your attention better than a corporate cipher like Brian Armstrong. And while the book is written in an understated tone, that serves Shin’s absolutely incredible reporting effort: She’s uncovered so many shocking, intriguing and surprising new details about the early history of Ethereum that there’s no need for extra mustard.

Those details, it should be said, will for now mostly interest crypto insiders or other business types looking for deeper insights into specific people or organizations. The book also offers a rich window on the realities of running a project structured along the loose, arguably democratic lines that many crypto projects aspire to. The book offers a functional introduction to what Ethereum is, what it can do and why it might matter, but that’s not the main focus. Those just starting their crypto journey should probably look elsewhere.

But for those with a knowledge base in place, the book will deepen your technical understanding of Ethereum and blockchains through endless real-world examples. Shin’s attention to detail is ferocious, and her accounts of specific incidents include things like long lists of transactions between specific addresses. Her descriptions of especially arcane events, such as the effort to recover The DAO’s funds or unlock the infamously lost Parity funds, will help focus your basic comprehension into true understanding.

They also occasionally make the book ever so slightly a slog, and I did find myself skipping past some of the more granular sections. But that detail also ensures that “The Cryptopians” will be a vital point of reference for years, possibly decades, to come.

And now, the juicy bits

The team that coalesced around Vitalik Buterin after he introduced the Ethereum concept clearly got the job done, but they were just as clearly a bowl of mixed nuts. Shin gives rich and nuanced pictures of effectively all of the Ethereum co-founders, and the word “spectrum” is apt in a couple of senses.

At one end of that spectrum is Amir Chetrit, who got bounced early because the rest of the team didn’t think he was doing enough work. Anthony Di Iorio emerges somewhat scuffed, seemingly regarded by the other Ethereans as too focused on profit and control. At the other end are Joe Lubin and, above all, Vitalik Buterin himself, who consistently come across as thoughtful and levelheaded, and the only two Ethereum co-founders who appear to remain close today.

It must be acknowledged, however, that it seems they were also the two who were most available to Shin: Some of the book’s most damning assessments of the various players appear to come from Buterin, even when he’s not quoted directly. That being said, Shin is clearly an independent thinker, and doesn’t hesitate to put Lubin or Buterin in the dunk tank when it’s their turn. While it’s a truth constantly evaded by bad actors of all stripes, people with less to hide simply have more leverage for defining their own narrative than those trapped in a web of lies and delusions.

And boy, the lies and delusions.

“The Cryptopians” puts real substance behind the crypto community’s longstanding antipathy for Charles Hoskinson, CEO of IOHK and founder of Cardano and Ethereum who was voted out of the Ethereum founding team at the same time as Chetrit. Hoskinson is convincingly depicted as a liar and manipulator of staggering boldness, bordering on sociopathy. This has allegedly included various false claims about his education and, according to Shin’s sources including Joe Lubin himself, claiming to be Bitcoin creator Satoshi Nakamoto. In crypto, sins don’t come much more cardinal than that one.

(By way of disclosure, I’ve had my own unpleasant brushes with Hoskinson: After I wrote a 2018 profile and interview focused on his various clashes (unfortunately now offline), he recorded a lengthy YouTube video warning the rest of the crypto community that I was a bad journalist and not to talk to me.

Being attacked by Hoskinson has had, if anything, a positive impact on my career. I highly recommend the experience.)

The book does have something of a secondary villain, former Ethereum Foundation head Ming Chan. The book spends a lot of time recounting her immense self-regard, apparent emotional instability and what occasionally looks like scheming for power. Some of the book’s most tense moments come when the Ethereum Foundation team reach the end of their rope and move to replace her.

Shin makes the counterintuitive but obviously correct decision to write about this craziness with a deadpan tone and meticulous attention to detail. A lesser writer (myself, for instance) would have had a hard time resisting taking egotistical pot shots at the various clownish figures and embarrassing behaviors sprinkled throughout.

A favorite example comes late in the book when Lubin’s ConsenSys buys the asteroid mining company Planetary Resources, at the height of the 2017-2018 crypto mania. Lubin at the time issued a laughable statement about how important “deep space capabilities” were to his cryptocurrency company.

Shin, with the discipline of an endurance athlete refusing a single delicious M&M, simply lets the self-evident absurdity stand without comment.

People always matter

Ming and Hoskinson, according to Shin’s reporting, were detrimental to Ethereum in fairly subtle ways, mostly emotional. Ming was an occasional roadblock or hassle, but by Shin’s telling she also did a lot of vital work. Hoskinson was out before the bulk of real work even began.

But their stories, along with the dozens of smaller conflicts and blowups chronicled in “The Cryptopians,” nonetheless drive home an important broader takeaway. In crypto, “trustlessness” is a technological term of art that has been widely misperceived as some sort of moral carte blanche, a sense that anything goes because blockchain somehow protects you from bad actors. It has even cropped up in the bizarre viewpoint that it’s okay if known criminals are running your project.

But the truth is that in crypto development and investment, people arguably matter more than in more formal or traditional settings. Open leadership structures leave bigger gaps for people with Machiavellian personalities to sow distrust or put their own interests ahead of the project’s. In developing fields, there’s far more leeway for individuals to pitch bad ideas to underinformed and greedy audiences, proactively fudging the line between failure and fraud.

Those technological bells and whistles, jangling on a yard-long line of horse pucky spun by someone who insists he nearly graduated from MIT, are often an intentional misdirection. Understanding the technical or financial claims being made by a new project is often less important than understanding the people behind it, their character, their past behavior and their present motivations.

There’s no better example of this than Buterin himself. He’s often hailed as a technical or systems genius, but what’s less often noted is his apparently strong moral and intellectual center. The key conflict in Ethereum’s history was the decision over whether to organize the projects on for-profit or nonprofit terms. Buterin was the most influential single person in that conversation, and his insistence on the nonprofit setup contributed to the alienation of Di Iorio in particular.

Buterin broadly believed the nonprofit setup was important because it aligned with the crypto and cypherpunk values of open protocols and public infrastructure. It’s too much to say that has been a crucial decision for cryptocurrency in general – the nonprofit structure pioneered by Ethereum has been abused at least as often as it has served to make projects more public-spirited.

More important is what it says about Buterin himself, and ultimately about Ethereum’s incredible success. His early insistence on a degree of selfless public-spiritedness has made Ethereum a comfortable home for all sorts of outside-the-box thinkers, people genuinely interested in much more than just money. And here’s the kicker – as it turns out, generosity is wealth-creating. It’s secretly true everywhere, but especially true in crypto.

That’s seemingly a hard lesson to absorb, even for full-grown adults. In a space where bitcoiners constantly bang on about “low time preference,” the reality is that most projects have extremely short-term viewpoints. Scammers are the most obvious examples, but you can also include trade-offs made to compromise security for throughput, or really any project where profit crowds out other priorities.

As those projects come and go, reaching or missing their confined, self-interested little metrics, Ethereum is still here. To a degree that’s rarely acknowledged, that’s because Buterin, even in the very early days, insisted on principles of openness, accessibility and fairness. Moreover, it seems clear he understood his power and didn’t hesitate to flex it (in his understated way) toward those unselfish goals.

That’s a truly remarkable set of ethical choices for someone who was not even old enough to drink in the U.S. when he started Ethereum. It’s far more impressive than how many languages he speaks or his command of crypto economics and incentive design.

I’m no fan of the great man theory of history, but in this case, I might be ready to make an exception.


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David Z. Morris

David Z. Morris was CoinDesk's Chief Insights Columnist. He holds Bitcoin, Ethereum, and small amounts of other crypto assets.