One potential way of measuring the actual size of the cryptocurrency industry might be in square footage. It sounds bizarre but this mostly synthetic, digital asset class actually has a growing footprint.
The New York Times published an article on how “The Crypto Bros Are Snapping Up Manhattan Real Estate” on Sunday. It had a stronger headline than the article supports, but did provide a look into one aspect of this rapidly professionalizing industry.
This article is excerpted from The Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.
“Crypto and related companies are believed to occupy less than a million square feet of an estimated 4.4 billion square feet of office space in the United States,” the article reads. What’s more, many realtors are looking at potential tenants not as gambles that could go up in flames, but like a “mom and pop” business.
This seems like a healthy attitude. Crypto is risky, but it’s a genuine economic opportunity for some.
See also: The Real Benefits of Blockchain Are Here
Compare that to another supposed dose of reality: This week a group of 26 concerned technology experts, writers and academics wrote an open letter to the U.S. Congress urging “a critical, skeptical approach toward [the] industry.”
In particular, the signatories took aim at the braggadocious claims that some in crypto have made as well as the predatory schemes that run rampant. It was meant to counter the increased crypto industry lobbying in Washington, D.C., and, speaking honestly, was mostly fair.
“As software engineers and technologists with deep expertise in our fields, we dispute the claims made in recent years about the novelty and potential of blockchain technology,” they wrote.
Crypto’s response, never of a single voice, was also measured. Some noted that 26 people – even experts – could not speak for a global industry. Others challenged specific language that sets crypto up like a strawman, such as the line that “not all innovation is unqualifiedly good” – a claim no one in crypto has made.
And though the letter writers correctly say many crypto boosters have financial exposure to the asset class and are therefore biased, a similar claim could be levied against them. Stephen Diehl, for instance, a London-based software engineer and long-standing critic of “public blockchains,” has for years drawn a paycheck from an “enterprise blockchain” firm.
Other signatories have worked, or still work, for Big Tech firms including Microsoft and Apple that theoretically stand to lose if crypto’s open-source ethos challenges their market share and business lines around private software.
Further, the claim that applications for crypto are “at best still ambiguous and at worst non-existent” is a pretty strong opinion that’s not entirely born out by fact. Tools are being built and used, Bitcoin has been running for 13 years straight. It’s just that crypto thrives at the edges.
In many cases, crypto works exactly as advertised: a means for “censorship-resistant” transactions. The whole financial and cultural apparatus that grows around that should take that simple premise to heart. The problem is when crypto doesn’t.
Vitalik Buterin, the co-founder of Ethereum, wrote a considered thread on Twitter in response to the letter. He was particularly dismayed that people he once considered “fellow travelers” have soured on his network and the industry at large. He mentions sci-fi author and journalist Cory Doctorow by name, but other open-source advocates might be implicated.
Although once a soft supporter of crypto, Doctorow has grown increasingly concerned with the financialization of the industry and the potential for crypto to financialize all aspects of human existence – turning friendships into benefit games and our public data into a monetizable product.
See also: 'Probably Nothing': Why People Still Hate Crypto | The Node
This is a real concern, I think, if crypto stakes out the aim of “mass adoption.” Blockchains were not built for such use, and in fact literally cannot scale to such a level with the current technology. But blockchain – with its transaction finality, irreversibility and costs of using – is extraordinarily good at ensuring those that need it most can have access.
The writers do not call for increased regulation. However, that is the logical endgame if crypto grows too large for itself especially at an unnatural pace catalyzed by venture capital and retail speculation.
Agree or disagree with these claims or with the 26 letter writers, but know it doesn’t matter. In addressing Congress, or in being concerned with governmental retaliation, they’re already missing the point. The true kernel of crypto hasn’t left, even if it’s surrounded by a speculative bubble.
The government was never supposed to support unstoppable, totally sovereign transactions. Not everyone will want to use these systems, but crypto grows by voluntary adoption. Or as Paul Dylan-Ennis said, it’s about “carving out” space from the existing, problematic world.
“[W]e can't fix everything but we can 'live as if we are already free,'” he wrote.
Last winter, SubStack writer Casey Newton wrote about a “vibe shift” happening across tech and tech journalism. Where public or state concern over tech was once centered around effective regulation of Big Tech behemoths, that now seems unlikely.
The vibe shift is instead to think about how solutions could be built from the ground up, in Web 3 and beyond. Writers, the public and the government all have a responsibility to look at this skeptically, Newton wrote. But he also suggests people “assume U.S.-led efforts to regulate tech will come to nothing, and allocate coverage resources accordingly.”
That’s practical advice for an industry with a pretty tiny footprint.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.