Don't buy crypto!


Crypto businesses made it to the mainstream, with tv ads at the SuperBowl, huge billboards at soccer matches and more.

We are encouraged to “be brave”, “to take the risk”, so we can get rich just by installing an app and buying some coins.

Thanks god, the usage of cryptocurrencies is not mainstream yet. In fact, as of September 2021, 9 out 10 Americans had heard about crypto but just 16% of them actually used or bought a coin/token.

There’s a good explanation for that.

13 years after the launch of Bitcoin, there’s still not much we can do with cryptocurrencies, apart from buying them and waiting for the value to increase.

Coinbase claims that the future of money is here. Well, apparently there’s not much we can do with money in the future.

The promise behind cryptocurrencies was that of democratising the finance industry and money in general. It hasn’t happened yet. Actually, the exact opposite happened!

Research by the The Wall Street Journal shows that as of December 2021 just 0.01% of bitcoin holders controls 27% of the currency in circulation. And now they’re even planning to build their own cities, as I explain in a previous post.

This is late-stage capitalism, not the egalitarian utopia promised by the crypto evangelists.

Their motto goes by “We’re all gonna make it” #WAGMI. Agreed, they’re definitely going to make it (and already are), at the expense of the regular people to whom the Super Bowl ads are targeted.

But who are they?

They are mostly entrepreneurs who built popular apps around crypto, mainly exchange and trading platforms. Apps to trade cryptocurrencies, not to actually make use of them. Those entrepreneurs made it to the billionaires club thanks to real-dollar commissions paid by their users.

An argument could be that investing in cryptocurrencies is no different from buying shares in a company, with the “company” being the crypto ecosystem. Agreed!

So, would you buy shares in a company that doesn’t make profit, whose products very few people use and are complex to understand, as well as not regulated? Probably not.

So, why would you buy crypto?

However, cryptocurrencies did something good. They popularised the concept of blockchain.

The blockchain technology can have a myriad of applications other than cryptocurrencies. Many “boring” industries are already making strong use of it, for example the pharma industry, which is using it to prevent counterfeiting.

The blockchain revolution is actually happening, but it’s going to be way less sexy than Matt Damon in his Crypto.com advert.

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To read more about this: It’s okay to opt out of the crypto revolution

What is the guy in the picture staring at?

It is the Worldcoin "orb". A metal sphere that looks just off of a dystopian sci-fi movie. The story of Worldcoin is in fact dystopic and shows the dark side of web3 and cryptocurrencies.

Inspired by the basic-income concept, the company's vision is to fairly distribute its cryptocurrency (WLD) to every person on earth. But first, it wants to scan everybody’s eyeballs in order to avoid fraud. This is what the "orb" is for: a feminine robotic voice asks you to come closer and open your eyes: "Initiating scan".

Co-founded in 2020 by former Y Combinator's head Sam Altman, Worldcoin is already valued at $3 billion! 🤯

It has raised funds from top investors like Andreessen Horowitz, the venture capital arm of Coinbase, Reid Hoffman and others.

However, it hasn't got much publicity.

Why?

Its cryptocurrency hasn't been launched yet, although it was meant to last summer, and then again at the end of last year and now "sometime in 2022". I guess this shouldn't be concerning, delays happen.

But it is concerning, when the coin was promised as a financial reward to the hundreds of thousand people who already registered over the past two years and agreed for their eyes to be scanned.

Worldcoin has mainly operated in poor and developing countries, like Sudan, Ghana, Chile and Kenya to name a few. This is instrumental to get more people to sign up. A small financial reward in exchange for valuable biometric information is more appealing to uneducated and poor populations, than even to the most crypto-enthusiast nerd in the rich world.

In fact, the company is scanning as many people as possible to train its AI algorithm. The scope is to identify unique eye scans and avoid duplicates as well as bots. The same system can be used by (or maybe sold to?) other web3 applications for identity verification purposes.

This involves huge privacy concerns, which the company hasn't clearly addressed yet. Somewhat ironically, the whole point of crypto is for our personal data to be "crypto" and anonymous. Well...

There are reports of people being misled and given false promises. Many didn't even own a smartphone and so couldn't install the Worldcoin wallet to redeem the coins. Many felt literally scammed.

With personal data being the most valuable asset of the 21st century, tech companies are racing to get as much of it as possible. It's just easier and cheaper to get it from poor countries, where privacy regulations don't apply.

This is called data colonialism or even crypto colonialism if you wish.

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To know more about this story:

MIT Technology Review: Deception, exploited workers, and cash handouts: How Worldcoin recruited its first half a million test users