So the long and the short of it is, I made a comment on Hacker News, got asked to turn it into an opinion piece for the New York Times, agreed, and then a piece ran in the NYT that sort of, kind of resembled my opinion.
It began with a conversation in Hacker News that I made a comment in.
I will probably get downvoted for this, but: I think there is a recurring pattern here. Like discovering that absolute anonymity on the internet enabled bad behavior, and pseudonymity allowed foreign governments (or just trolls) to engage in duplicitous or offensive behavior more easily, it turns out that many of the traditional "limitations" of government-regulated currencies, are features and not bugs. I'm not saying there's no place for cryptocurrencies, but they are clearly not for the average, non-technical, mom-and-pop operation to use. They do not protect you from being abused by powerful institutions; they make you more vulnerable to being abused by powerful institutions (although perhaps different ones). If you are a technically savvy user or a large organization, there could be valid reasons for using them, but in general they are not a replacement for ordinary non-crypto currencies, and that's not in spite of their freedom from government control, but rather precisely because of it.
The next day, I found an email in my inbox asking if I wanted to expand that comment into an opinion piece for the New York Times. My first thought was, "this is a fishing expedition", but a bit of research suggested that it was, in fact, probably an email from the New York Times, so I decided, "why not?". I asked for the requirements on word count and timeline, and set to work.
I copied my comment into an editor, expanded each bit into a paragraph or two, tidied it up for a bit, and sent it in. Here's what it looked like when I sent it to them.
Partisans may disagree, but I think it is fair to say that cryptocurrencies are having a problem. Cryptocurrencies, such as Bitcoin, have lost over half their value so far in 2018, and more than that since late 2017. Cryptocurrencies have crashed before, but this time they seem in no hurry to gain back lost ground. Market manipulation of one sort or another might have been behind their dramatic runup in value in 2017 in the first place. A recent report by the New York Attorney General's office found substantial risk that consumers who invested in cryptocurrencies could lose access to it, either temporarily or permanently, if there were problems at their exchange. This has been obvious since at least 2014 when the Mt. Gox exchange was shut down, and most people who had bitcoins there were out of luck. They also found that numerous of the exchanges had taken part in trading in their own markets, essentially creating a conflict of interest where they are trading against their own customers.
It wasn't supposed to be like this. Cryptocurrencies were started, not as a way to get rich, but as a way to put the ordinary citizen's savings beyond the reach of corrupt governments who would devalue their money. Because cryptocurrencies were not controlled by a central institution, they were supposed to give the holder the reliability of gold, without the inconvenience of having to transfer a physical item to make a transaction. The reality is that cryptocurrency is (for the ordinary citizen) less secure, and more vulnerable to sudden drops in value, then fiat currency such as the U.S. dollar. They do not protect you from being abused by powerful institutions; they make you more vulnerable to being abused by powerful institutions (although perhaps different ones). If you are a technically savvy user or a large organization, there could be valid reasons for using cryptocurrencies, but in general they are not a replacement for ordinary currencies, and that's not in spite of their freedom from government control, but rather precisely because of it.
This is not the first time we've seen this. Early web forums allowed anonymous comments, thinking that it would make for a more free atmosphere. The reality was that anonymity did not make things free, they made it toxic, and unwelcoming to newcomers. The promise of social networks such as Facebook to connect anyone in the world to anyone, did not make things free (for long); they opened us up to manipulation by anyone, anywhere. Russia? China? Just plain old trolls? There is a feeling I get when I login to Facebook, and get assaulted by clickbait news, overly intrusive ads, and a confusing inability to configure my feed to show me the updates from friends that I came here for. "Free" is not the word for it.
Peer-to-Peer lending, where one can take the savings of one person who needs to invest, and transfer it to another person who needs to borrow, was supposed to make the economy work more fairly, by removing the arbitrary and inefficient banker middleman. In China, P2P lending has instead resulted in a lot of lost money for ordinary citizen savers, and an unstable finance sector. Those who lost money attempted to organize protests to demand action from the government, using online social networks. They found out that the Chinese government was able to use those same networks to find out who and where they were. The layers of irony pile on one another.
New software is at the root of many of these problems, but software also has a phrase for this: "That's not a bug, it's a feature". Established systems (such as software, regulations, or customs) are the way they are, for many reasons. Sometimes the history behind them is forgotten. Sometimes we never knew all the reasons why a system needs a restriction, until we discover a way to make new systems without it. Cryptocurrencies, P2P lending, anonymity and pseudonymity in communication, are all impressive feats of engineering. They are also all excellent at showing us the value of society requiring that you have a name and identity, having a government support a currency, regulations for a financial system, etc.
Imagine if a living organism "realized" that it did not need an immune system, that there was so much more awesome genetic material out there. Every gene is potentially a new life-saving, or life-enhancing, protein that your body could be making. All that's holding us back is our stodgy old immune systems, that prevent new organisms and their new DNA from coming in. Break down the barriers! Move fast and break things! Disruptive innovation! But, it turns out, immune systems, and other kinds of restrictions, are a good idea.
There is an optimal growth rate for any new system, or new technology, and it's not zero, but it's also not infinite. Bitcoin's first commercial transaction was in 2010; by late 2017 it had grown to a value of over $100 billion. Facebook grew to 1 billion users in about the same amount of time. The word "viral" is often used to describe such exponential growth. But, viruses grow that way for a reason, and it's nothing to do with a benefit to the host.
This is not a reason to never make new things, and every system that is now old was once new, but when we make new systems to replace old ones, we should expect problems as they grow. This means that we should not expect it to be a good fit for small users who are not tech-savvy. If you're looking at a new opportunity like cryptocurrency, try to balance FOMO (fear of missing out) with the fear that you will be the small fish in the new pond full of new and unknown predators.
The response I got to this was encouraging, but also suggested a few changes. My initial response was, "why are you telling me what my own opinion is?", but then I calmed down. One of the requests was to include more links to existing news sources relevant to the topic (e.g. the problems in China with Peer-to-Peer lending), and that seemed a reasonable idea. There were a lot of other changes, though, that looked less like editing and more like somebody else's opinion.
Ultimately, instead of firing back something along the lines of, "if you want your own opinion, publish it under your own name", I recalled the fact that I was about to start teaching my daughter (who is homeschooled) how to do a research paper. Part of that process is editing her first drafts, to give her feedback on what she needed to add to or alter. It occurred to me that going through a similar process with the NYT might be a useful experience to give me perspective on what it's like to have somebody tell you to rewrite what you wrote. So, I decided to persist.
Aside from adding links, what bothered me was the addition of a couple sentences that didn't seem much like my opinion. One was inserted right after my first paragraph.
Cryptocurrency is in crisis, one stemming from lack of government oversight. [Add a sentence or two linking the previous paragraph to this point] It turns out that many of the traditional “limitations” of government-regulated currencies are features, not bugs.
Hmmm...no, that's not my opinion at all. If Bitcoin had begun with government oversight, I'm sure things would have gone differently, but I don't think they would have gone better. It was the fact that fiat currency was over half a century old that made it more stable; many of the bugs had been worked out.
Another was put at the end of the paragraph about Facebook.
More recently, social networks such as Facebook and Twitter promised to connect everyone in the world and give users a platform to speak freely. As we’ve seen, they did not make things free; they opened us up to manipulation by anyone, anywhere, including the manipulation of the 2016 U.S. Presidential Election by Russia [Find link for this]. When I visit these social media platforms today, what I find is a far cry from the promised land: clickbait news, overly intrusive ads, political trolls, and a confusing and confounding inability to choose what I want to see. “Free” is not the word for it, but “unregulated” certainly is.
Well I notice that they have replaced the uncertainty about who or what we are talking to or hearing from on Facebook, with a pretty definitive answer that Russia was manipulating the election. I also see that "unregulated" has been put in as a name for the feeling I get when I login to Facebook. Hmmm...that's not what I think at all. What I think is that the very lack of a stable identity, or geographic restrictions, that made Twitter and Facebook seem more free at first, eventually resulted in it seeming less free than an ordinary conversation face to face.
So, it occurred to me that what this was all demonstrating, was that my first opinion piece had not done its job very well at all. I was trying to make a point about the pattern in which older systems, with restrictions based on either geography or regulations or anything else, often have hidden benefits that we don't realize until we make a newer system that gets around those restrictions. But apparently, I didn't convey that very well, because the NYT saw it and thought I was calling for more government regulation.
This went back and forth a few times. I do want to make clear at this point that I am not a professional writer, and so it is not at all surprising that the NYT did NOT take a look at my first draft and say, "why that's great, run it!" What I was a little surprised at, though, is that so much of what ended up in the final piece was not written by me.
For example, the final piece that appeared in the NYT had this in it:
In the world of cryptocurrency, there are two categories of intermediary institutions. The first category contains the exchanges where users buy, sell and store their virtual currency. These exchanges include Coinbase, which the New York attorney general’s report claimed traded on its own platform, and the now-bankrupt Mt. Gox exchange, which lost over 700,000 of its users’ Bitcoins to hackers in 2014. The second category is made up of the people and companies who create and sell their own cryptocurrency, using initial coin offerings. This year, two founders of a virtual currency called Centra were arrested and charged with “conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud and wire fraud.” In May, The Wall Street Journal found that hundreds of initial coin offerings were “using deceptive or even fraudulent tactics to lure investors.”
I have no idea who wrote that; I didn't see it until I clicked on the link to read it on the NYT website. Looks mostly correct, though.
I also felt a bit like I was playing whack-a-mole, as sentences kept cropping up that seemed to call for more government. One of my last emails back included this:
"They are also all excellent at showing us the value of society that requires an identification system, government support of a currency and oversight of its financial systems."
...sounds a little Orwellian. I prefer:
"They are also all excellent at showing us the value to society of a stable identify, government support for a currency, and financial institutions for a financial system."
...which might seem like the same thing to you, but we had stable identity for centuries without a government-mandated ID card, which is what "an identification system" brings to mind, along with a fascist asking to see your papers. For people like me that's what it suggests, anyway.
The line that ran in the final piece was:
They are also all excellent at showing us the value of a society that requires a stable identity, government support of a currency and oversight of its financial systems.
This is still saying what we need is "oversight" for P2P lending, but that's not exactly what I'm saying. What I'm saying is that the middleman financial institutions that P2P lending was supposed to eliminate, turned out to have a purpose. If you just had government oversight of P2P lending, I don't necessarily expect things would go any better. The reason it's relevant to the recent problems with cryptocurrency, is that the very thing (a middleman financial institution) which we wanted to get rid of, turned out to be useful after all. Of course, those financial instititions are heavily regulated, but if you just had the government in the middle, but not the banks (with their several generations of accumulated customs and policies and expertise), I'm not at all convinced that things would have gone any better, and I'm not even a big fan of banks.
More generally, my opinion is that institutions and customs that evolve over an extended period of time, are likely to have advantages over newly created ones, even in cases where those older systems were more limiting. I tried to make this point with a couple paragraphs that got cut. One was the one about immune systems in the original draft that you can see above. The other was a proposed concluding paragraph in my fourth version:
Big, new government programs have long been known to have the potential to backfire, producing roughly the opposite of the intended result; this effect was dubbed by Milton Friedman "the invisible foot". Less well known is that big, new private sector projects can be just as likely to backfire, also producing roughly the opposite of the intended result. The underlying problem is systems that grow too fast, and get adopted for general use before the problems caused by their lack of restrictions is recognized. It takes time to find out what those problems are (usually by running smack into them).
Both of these got cut. I cannot help but notice that neither one paints government regulation in a flattering light; the quote of Milton Friedman might have been especially annoying to the NYT. Or, perhaps they're both just badly written, I don't know.
link to article in New York Times
In the end, the bottom line of the piece (if you're a "mom and pop" individual, don't invest in cryptocurrencies until the bugs get worked out) is one I believe in. The sentiment of, "oh, if only they had more government involvement", is not my opinion, but I think the NYT probably honestly thought it was.
Now, hopefully, I can remember what all this felt like, when I am editing my daughter's research papers.