Cross Post: Jeffrey A. Tucker Millennials Are Obsessed with Cryptoassets

Now, this is revealing. The New York Times ran a piece on Bitcoin with this sentence: “from less than a cent in early 2010 to around $2,600 currently.” The problem is that when the story went live, the price was actually $3,400.” An editor didn’t think to check it, because he or she didn’t know to do so.

This is how quickly these markets are moving. Not even the people assigned to be experts know enough to do a competent edit.

And this is precisely why so many of us are constantly intrigued by these markets.

Cryptofriends

Last week, when the NYT story was being filed, I was sitting at the national convention of the Young Americans for Liberty, feeling a vague sense of discomfort for one ridiculous reason. It had been a full day since I had talked with anyone about cryptoassets. So I grabbed the nearest dude and threw out a couple of observations. He lit up. He could talk ICOs, trading platforms, obscure coins and services, with the best of them. Soon others arrived. Then more. Pretty soon we had a big crowd, all talking and thinking about these bizarre new ways to invest.

Pretty interesting. I could never have assembled such a posse of group discussion if I had been talking about bank stocks and the S&P 500. Too boring. The crypto market, on the other hand, is incredibly interesting, lucrative, changing and wildly dynamic. Yes, many people lose their shirts. This is not a disgrace but a bragging right. If you have bought high and watched the thing fall to zero, it only demonstrates your derring do. If you have made money, you are a bit cheeky about it because, after all, these markets are edgy.

There is some glory in checking your smartphone in the middle of the night to find that your assets are up 10% since you went to bed. When you wake up and you are down 20% total, it’s sad but still exciting. That’s why people play these markets. And some people are truly winning.

What does it mean to be a millionaire but all your assets are in brand new digital things with names like BCH, NEO, GBYTE, FCT, or DSH? And do you really want this information known? Probably not.

It’s a Mania

Another scene: I’m at the UPS store and paying with a Bitpay debit card. The guy behind the counter nonchalantly says that his choice coin is Monero. I banter with him a bit. We do what everyone in these discussions does: we test the limits of each other’s knowledge. Who among us is the more tech savvy and experienced. Discerning that gives insight into the real question: what is your crypto net worth?

How likely is it that some dude I bump into at a mail service would know anything about this new thing going on? Could be a coincidence. Or he could be the voice of a generation. According to the New York Times, the second conclusion is the more likely truth.

After years as a niche market for technologically sophisticated anarchists and libertarians excited about a decentralized financial network not under government control, digital coins may be on the verge of going mainstream…. Cryptocurrency has understandable appeal to millennials who came of age during the 2008 financial crisis and are now watching the rise of antiglobalist populism threaten the stability of the international economy.

 This is a fake, he said, just like all social media platforms and time-wasting video games.

Typically with such reporting, there are great insights in this story, despite the misquoted price. The 2008 financial crisis traumatized a generation. They no longer trust banks. Conventional financial markets are driven by electronic trading, and there is no way to beat the market in the short run. Plus, there is the draw of the new and techy. Young people have no assets but they do have tech skill. Crypto markets are easy to get into and you are rewarded for knowing your way around. Older people tend to lack such skill, and they are afflicted by incredulity: surely this market is nothing more than a techno tulip mania.

I can recall being in front of an audience of 3,000 people some three years ago, interviewing a major and famous global investor. In passing – slightly expecting to be ridiculed – I asked about Bitcoin. He blew up in fury, as if I had committed a faux pas. This is a fake, he said, just like all social media platforms and time-wasting video games. If young people think this is productive, they are sadly mistaken. This country needs to get back to making things rather than taking food selfies.

I was crypto shamed.

And that was that.

Meanwhile, the dollar exchange ratio of Bitcoin moved from $30 to $3,000. Our savvy and “mature” and responsible investor was completely wrong. And he had misinformed thousands of people who had paid for his advice. And he was wrong because of the old Latin phrase: “Damnant quod non intellegunt.” They condemn what they do not understand.

The young have no such hangups. They don’t need a theory to justify their interests. They discern that the market is pointing a certain direction even if they do not know why. You could chalk it up to naivete of youth. Or you could look at the old investor and observe that his failure to believe is due to the foolhardy incredulity of age.

What It Is

Let me attempt, yet again, to explain why these markets are not tulipmania. Tulips had always existed. Cryptoassets, on the other hand, are a new innovation. What is it? Some people understood early on. For people not stuck in the old ways, not biased by prevailing practices, this was promising and exciting.

For the rest of us, it took time. It’s true that it is a way of hacking the internet to make a market-driven money. It’s true that the blockchain technology that backs cryptoassets makes for a great payment system, far faster, cheaper, and better than existing practices. Millennials know that the old way failed and, because of experience, they trust that there is a technological solution, even if old-world institutions are slow to adopt it.

There’s more going on than just that. This technology is the newest and best iteration of a universal human demand to document ownership rights. After many years of struggling to understand this, this is my best-possible explanation. Humanity documented “mine and thine” since the ancient world: stones, clay, parchment, vellum, databases. There must be a record to compel social assent to anything.

Is that an innovation? Yes. It’s everything.

And it is not only about rights. It is about rules. But the failing of every previous piece of technology has been that it has been centralized: only one authoritative copy. Blockchain distributes that knowledge and authority to an infinite number of nodes.

Is that an innovation? Yes. It’s everything. With millions of applications, only one of which could imply the possibility of abolishing government money and central banking in favor of a market-controlled money. And that’s just the most obvious. Blockchain actually offers up the hope that humanity can learn to master its own affairs on a purely voluntary basis: no need for coercive relationships, geographical jurisdictions, or preemptive revenue collection by force. It’s the realization of the old liberal dream.

But not yet. It will take decades to get there. In the meantime, young people are having a blast. Good for them. They understand more about the world than those who are charged with copy editing the New York Times.

Jeffrey A. Tucker


Jeffrey A. Tucker

Jeffrey Tucker is Director of Content for the Foundation for Economic Education. He is also Chief Liberty Officer and founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books. He has written 150 introductions to books and many thousands of articles appearing in the scholarly and popular press.

This article was originally published on FEE.org. Read the original article.

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29 Responses to Cross Post: Jeffrey A. Tucker Millennials Are Obsessed with Cryptoassets

  1. Bruce of Newcastle

    Traders love a good bubble.

    The virtual currency one is interesting. I suspect a lot of the recent spike in Bitcoin was actually due to the North Korean ransomware campaign, since they required payment in Bitcoin. Suddenly a whole lot of people desperately needed Bitcoin, with the expected result. The Norks have a slight problem financing Un’s luxuries so a virtual currency which is available everywhere and immediately transferable is just the ticket for such a project.

    One of the best examples of selling virtual stuff is the whole Chinese gold farming industry:

    In 2005, The New York Times estimated that there were over 100,000 full-time gold farmers in China alone, and by 2009 the number had increased to one million.[16][5] And in 2006, sales of such virtual goods were thought to amount to somewhere between 200[17] and 900 million USD.[4]

    So there were a million Chinese scraping up as much virtual gold from the likes of World of Warcraft as they could. Then their bosses were selling it to rich Western players so they could buy imaginary stuff. Cool!

    If I had a +5 vorpal longsword I could’ve got a pretty price, but sadly I don’t.

  2. .

    Bitcoin is great. Enough people get on it and governments can go and shit in their hands.

  3. Tim Neilson

    .
    #2464695, posted on August 10, 2017 at 5:21 pm

    Serious question dot.

    Given the train wreck that the Euro has made of the Eurozone, are there any dangers in moving to a single currency across lots of disparate national borders? Or is its being not a government fiat medium a protection against Euro-like disasters?

  4. .

    I don’t blame the Euro per se.

    The Euro was a bad idea for Ireland.

    The old gold standard was close to a single currency. It was standardised and nations with trade deficits, for example, would see price changes as specie flow altered. From here, trade balances would readjust.

    We’ve already done something like this before.

    There are alternatives to BTC and as long as it is convertible into national currencies or even privately run commodity backed accounts, it will work. I think it will still work even if this goes away, but it needs to gain enough momentum.

    The USD before has acted as a quasi-global currency. It has stabilised other economies. The lack of control over money supply has been used by Panama to create a stable banking system in an unstable region.

    I’m not worried about it at all.

    You’re right, BTC is secure and the way it is generated cannot be manipulated. You will not have parties breaching and cheating on the Maastricht treaty, nor will we ever see QE. On the other hand private quasi-central banks can act as clearinghouses and with BTC they won’t be able to issue currency, they can moderate shocks through their deposit system. This already happens now.

    Our monetary system costs 3% or so a year. That isn’t cheap nor is it particularly reliable.

  5. rebel with cause

    A currency with a value that fluctuates as wildly as Australia’s spot energy prices doesn’t sound business friendly.

  6. .

    What is fluctuating? Everything else fluctuates relative to the asset you nominate.

  7. Tim Neilson

    .
    #2464755, posted on August 10, 2017 at 6:16 pm

    Thanks dot.

  8. max

    I was very interested in cryptos a while back and wanted to invest. But my interest waned after checking a few sites where people recounted their experiences.

    Far too many complained about long delays or writeoffs when it came to cashing out. This was with a few mainstream internet platforms and with quite small sums. Still looking for something reliable.

  9. Bad Samaritan

    All crap. Glorified IOUs and repackaged derivatives. No different to little kids “valuing” footy cards, or marbles or bottle-tops etc as “money”. I can still remember the day I swapped a special-edition Pepsi top with “Rod Laver” on the inside for a sausage roll at lunch-time in 1970. So long as the in-crowd are willing to play along, the promoters and scamsters will be doing well. And good on them. There can never be enough Ab-Blasters, Anti-wrinkle creams, cures for baldness, dating sites, Nigerian Princes, nor Crypto Currencies.

    Gullibles really are born every minute; since they are born as sheep, they also need regular shearing.

    BTW; I have some wonderful new crypto coins called Tulip Bulbs for a mere A$2500 a piece. This is a bargain I tell’s ya, as my mate will swap (let’s say “sell you”) a new Kia Cerrato for 7 of these instead of A$20,000 in old-style RBA currency. Yeah, I know that means they should be closer to $3000 but I really am doing all Cats a special favour. Send the old RBA stuff to me now..

    2nd BTW. If my mate hasn’t got a car right now, I can assure you that there are many willing buyers for these Tulip Bulbs at $2800+ Hope this helps/

  10. Bad Samaritan

    And more…..

    Casinos have been offering Crypto Coins for yonks; you buy them for $5 and then use them throughout the entire Caz. Many cruise-ships, and holiday resorts likewise. I even recall, in the very old days before electronic tickets and such, getting a physical, metal crypto currency to use when going through the turnstile at the Ferry Wharves at Circular Quay. One week it “cost” two old dollars, and a month later three old dollars. Luckily a friend had given me the heads up so that I bought a few of those Jetons in advance at $2….made a killing on-selling them at $2.90 the following month!

    FFS guys. A scam is a scam is a scam. Enjoy it if you were in at the start, but don’t risk real money this far into it.

  11. Mark A

    .
    #2464695, posted on August 10, 2017 at 5:21 pm

    Bitcoin is great. Enough people get on it and governments can go and shit in their hands.

    Dot, with all of your supposed knowledge of all things, I have to say you are quite naive when it comes to what govs. can or cannot do.

    Say you acquired a great deal of property dealing in Bitcoin. Suddenly Bitcoin becomes illegal.
    What do you think will happen to those properties if you can’t prove legit?

    Those who have the guns or command people with guns can do anything. You can squeal injustice like a stuck pig, won’t change anything.

  12. Herodotus

    I recall the younger crowd being all for the NBN too.

  13. John Constantine

    Why just count biological Japanese in the demographics?.

    If every biological Japanese has a hundred robots slaving away productively for them, and the robots could in theory be taxed, then what is the difference between a productive robot generating export earnings and tax revenue and Australian wymynsys employed by borrowings on the taxpayer account and churning paperwork between the Departments of Social Justice Regulation and the Departments of Social Justice Compliance?.

    Aren’t both just examples of Drones, but only the robots are actually generating excess returns on the capital it took to deploy them?.

  14. .

    If the government starts retrospectively seizing assets for “crimes” that didn’t exist yesterday, it doesn’t matter what currency you have. You have proven nothing at all. BTC will go on elsewhere, Australia will become Venezuela Mk II.

    Guess where those with BTC elsewhere and their assets here seized are going to go? Either to gaol or they won’t stay here.

    Somehow this proves that fiat currency that is designed to lose 3% of its value every year is a more trustworthy medium of exchange?

    What a bizarre argument.

    “The house nigger probably will catch you so don’t bother running away…”

  15. .

    If the government starts retrospectively seizing assets for “crimes” that didn’t exist yesterday, it doesn’t matter what currency you have. You have proven nothing at all. BTC will go on elsewhere, Australia will become Venezuela Mk II.

    Guess where those with BTC elsewhere and their assets here seized are going to go? Either to gaol or they won’t stay here.

    Somehow this proves that fiat currency that is designed to lose 3% of its value every year is a more trustworthy medium of exchange?

    What a bizarre argument.

    “The house n*gger probably will catch you so don’t bother running away…”

  16. struth

    Dot, with all of your supposed knowledge of all things, I have to say you are quite naive when it comes to what govs. can or cannot do.

    As you can see here, it is a perfect example of Dot think.

    The best outcome is to get government back under the control of the people.
    Dot- think has you trying to destroy government or work around it, and as you rightly say, when they have the guns, neither is possible.

  17. .

    You will never get the government back under control. Romney was right.

  18. struth

    You will never get the government back under control. Romney was right.

    Trump is having a crack.

    One bloke.

  19. .

    He shaved 100 bn off a 19 trillion dollar + debt.

    That is about half of one per cent.

  20. Peter Pickled

    What do you think will happen to those properties if you can’t prove legit?

    It’s because people fear the government seizing their assets that crypto currencies exist! You cannot take someone’s ‘coin’ unless you know the password to their wallet. Crypto is enormously popular in Eastern block countries, not because everyone is in the mafia, but because people have finally found a place where their assets are safe from the hands of Marxist governments.

    Tucker is precisely right:

    It’s the realization of the old liberal dream.

  21. .
    #2465277, posted on August 11, 2017 at 7:57 am

    He shaved 100 bn off a 19 trillion dollar + debt.

    That is about half of one per cent.

    I’ll use Global Warming Scam tactics in reverse:-
    Considering Obama added more than One Trillion to the debt each and every year, I’d say Trump saved more than 600 Billion in six months. That is about 3 times of one per cent. W.I.N.N.I.N.G.

  22. notaluvvie

    The interesting thing about bitcoin is it is basically another commodity. Its “value” is measured against the fiat currency of the US Dollar. Ironic no? Other than being easy to hide for non-taxpaying functions such as crime or tax evasion, while the users still enjoy the benefits of the infrastructure, security and diversity immigration paid for by others’ taxes in fiat, you might as well be trading Scrooge McDuck’s fish or bottle top currencies.

  23. Stimpson J. Cat

    now watching the rise of antiglobalist populism threaten the stability of the international economy.

    Ha ha ha ha ha!
    Hilarity.

  24. Stimpson J. Cat

    Good article.
    Bow Tie Confirmed!

  25. .

    notaluvvie
    #2465332, posted on August 11, 2017 at 9:13 am
    The interesting thing about bitcoin is it is basically another commodity. Its “value” is measured against the fiat currency of the US Dollar. Ironic no? Other than being easy to hide for non-taxpaying functions such as crime or tax evasion, while the users still enjoy the benefits of the infrastructure, security and diversity immigration paid for by others’ taxes in fiat, you might as well be trading Scrooge McDuck’s fish or bottle top currencies.

    Government infrastructure hey? Second rate crap we’re forced to pay for. Diversity immigration? Stop giving them welfare. Security? Old mate the PFA for the ADF is now 20 situps and four push ups.

    You’re in denial that BTC has value. It is accepted by businesses globally. Probably more than accept the AUD or NZD. 260,000 new business in Japan have signed up for it recently.

    The USD loses 3% of its value every year and has done so more or less since 1973. Remember, a little bit of inflation the government wants is good. No one would fall for this is BTC charged 3% demurrage.

    Currencies fluctuate relative what ever you nominate.

  26. DM OF WA

    This is one of the more thought provoking articles on this site.
    Thank you.

    Cryptocurrencies and Bitcoin in particular are yet another part of
    the continuing computer revolution; just like social media, search
    engines, smartphones, machine learning and more. Like all revolutions
    it is chaotic and unpredictable; we have no idea where it will take us.

    The technology of Bitcoin is already changing mainstream finance. Big
    institutions and startups all see potential applications and are scrambling
    to get a place in the rapidly evolving finance industry.

    The thing I do not understand is this: Bitcoin is supposed to be a currency
    yet right now, for what can you exchange it and how easy is it to transact?
    Probably not useful enough yet to justify the current astronomical price.

    It cannot be good that Bitcoin has again become an asset which is the
    subject of wild financial speculation since bubbles always burst with
    much recrimination to follow.

    But when the current party is over I am fairly sure Bitcoin will survive
    and continue to evolve as a useful currency.

  27. .

    The thing I do not understand is this: Bitcoin is supposed to be a currency
    yet right now, for what can you exchange it and how easy is it to transact?
    Probably not useful enough yet to justify the current astronomical price.

    https://news.bitcoin.com/bitcoin-accepted-260000-stores-summer/

    It cannot be good that Bitcoin has again become an asset which is the
    subject of wild financial speculation since bubbles always burst with
    much recrimination to follow.

    Do you understand on what terms the USD is traded?

  28. Diogenes

    goodness gracious, there is a new one for the dead sea pedestrians called bitcoen
    can’t post the link because it contains a naughty 3 letter word , but from el reg (aka the register)

    Semenchuk, according to RT, has invested $500,000 in the project and hopes to raise as much as $20m through an initial coin offering that aims to sell 100m BitCoen digital tokens to investors.

    With that much market capitalization, BitCoen would rank at about 115th among the more than 1,000 cryptocurrencies tracked by coinmarketcap.com. Bitcoin’s current market cap is about $55bn.

    1000 cryptocurrencies wow, just wow !

  29. .

    BitCoen! Great branding.

    I think the real money is going to be acting as a quasi-central bank and clearinghouse for these currencies, like what the Bank of Scotland was during the days of a free market in currencies in Scotland.

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