The Media's Obsession with Crypto's Dark Side

Have you noticed that your social media feed is once again flooded with crypto enthusiasts celebrating the supposed inevitability of bitcoin's success? If you're wondering how we ended up back here, or why TV news claimed that Bitcoin was dead, you're not alone. The constant barrage of negative coverage, fueled by viral social media campaigns like Elizabeth Warren's 'Anti-Crypto Army,' has led to crypto being viewed as a dirty word, much like investment banking was in the aftermath of the 2008 financial crisis. However, this criticism can be seen as lazy, especially considering the tangible problems being solved within the crypto sector. For instance, stablecoins, which are digital assets pegged to fiat currencies like the US dollar, are gaining widespread adoption, particularly in emerging markets where local currencies are unstable. Decentralized finance (DeFi) is also making significant strides, enabling users to lend, borrow, and trade assets directly, bypassing traditional financial intermediaries. This represents a substantial opportunity for financial inclusion in countries with limited access to banking. Moreover, DeFi offers a neutral platform for transactions, furthering the use and proliferation of the dollar. Not all crypto projects have inherent value, however. Memecoins, whose value is driven by internet attention rather than tangible use, are a divisive topic, even within crypto circles. The market value of dogecoin, for example, exceeds that of 94% of companies in the S&P 500, despite lacking a product or business model. Chris Dixon, a partner at Andreessen Horowitz, has criticized memecoins for undermining the sector's utility. If one were looking for a reason to argue that crypto is a scam, they could find it in the world of memecoins. Since Sam Bankman-Fried's downfall in 2022, a new primitive has emerged, using crypto rails to rebuild the physical world: decentralized physical infrastructure networks (DePIN). These networks allow individuals to contribute resources, such as data or connectivity, in exchange for rewards. By crowdsourcing infrastructure, DePIN projects can compete with large incumbents, offering cheaper and more accessible services. The term DePIN, coined by an analyst at Messari, has been called 'boring' by The Atlantic, but these networks are already transforming the market structure of legacy industries. With over 1,400 DePIN projects currently in development, having raised more than $1 billion in venture funding, it's clear that this sector is making significant progress. A notable example is Helium, a network that crowdsources mini-tower and hotspot deployment to create a decentralized mobile coverage network. With over 120,000 active mobile plans in service, Helium provides affordable connectivity by reducing operating costs. However, some reports have misleadingly labeled Helium a scam, declaring it a failure after its token price fell 90% in 2022. This misunderstanding stems from the fact that volatile token prices often overshadow real business developments. Crypto networks like Helium are often 'antifragile,' adapting to volatility even as extreme price swings fuel misleading narratives. Perhaps this explains why certain individuals, like Trump, have an affinity for crypto: both are often misrepresented or taken out of context. Like with MAGA, certain crypto actors become conflated with the entire industry, and those looking for something to blame find an easy scapegoat. This also explains why crypto-natives feel so misunderstood. Yes, there is a cohort of crypto-owners that support anarchy, and others that have abused this unregulated market for personal gain. As the failures of the last cycle pushed mainstream media to pessimism, it's understandable that many believe the worst of crypto is yet to come. However, as real use-cases in stablecoins, DeFi, and DePIN continue to emerge, it's clear that the best of crypto is yet to come, too.