My knowledge of cryptocurrency is mostly gleaned from overhearing Quartz’s crypto reporters talking in the office. This is a bit like trying to study for an algebra exam by sitting in on an advanced calculus class: vaguely relevant, but several leagues above my head.
So you can imagine my delight when I—Quartzy’s London-based lifestyle reporter—spied crypto coverage in a place that is much more my aligned with my tribe and my vibe, so to speak: Goop.
Whether it’s tracking the ways Goop’s products overlap with Infowars‘, reading about Gwyneth Paltrow’s latest tastefully-chic brand collaboration (also known as her wedding), pondering just how GP (that’s what she’s called, btw) maintains the resolve to smoke precisely one cigarette per week, or probing how the wellness craze Goop helped catalyze makes privileged people increasingly terrified of death, Goop is right in my wheelhouse of coverage and interests. So maybe that means crypto can be too?
Before I even knew Goop had gotten into crypto in the form of a Q&A published on its website, I learned GP was very into it via her Twitter account. As a woman who can tweet any number of stories from her site on a daily basis, she decided to tweet this one. (Keep in mind the last time she tweeted was to share the details of her wedding, aka the “best day of [her life.]”) Upon closer inspection, though, I also learned that GP is an advisor to the Abra app—which is described as “part user-friendly investor app, part Venmo for crypto”—which is perhaps more pertinent context for her tweet about the Q&A with Abra’s CEO.
Anyway, here is everything I learned from Goop’s interview-slash-explainer with Bill Barhydt of Abra—fact-checked by Quartz cryptocurrency reporter Matt De Silva, who knows a thing or two about this stuff.
Bitcoin miners create new coins by solving a math problem that becomes harder and harder to crack over time. (Sounds like a nightmare.) Because of this, as time passes, there are less bitcoins to go around. So the people that have it start to hoard it, much like a California gold miner might’ve done in 1849. This, they say, is called a “deflationary currency.”
Matt: Yes! Unlike the US dollar, bitcoin has a fixed supply of 21 million units (so far, 17.3 million bitcoins have been created, or “mined”). Because bitcoin’s price has dramatically increased over the past 10 years—from fractions of a penny to thousands of dollars—people are scared they’ll miss out if the price continues to rise astronomically. Today, people aren’t really spending bitcoin, which makes it less like a currency you spend on things and more like digital gold that you squirrel away for safekeeping.
Just because I know what bitcoin is, and vaguely how it works, doesn’t mean I’m off the hook. There are more promising cryptocurrencies underpinned by the blockchain than just bitcoin. Goop tells me the ones to watch are litecoin (for “faster and cheaper transactions”), Dash (for privacy), and Ethereum (for… I’m not actually sure).
Matt: Rosie… please, please, please be careful about buying cryptocurrencies, especially the more exotic ones. It’s like the dot-com bubble on steroids (more on the internet comparison later).
Even though litecoin is “faster” than bitcoin, that doesn’t make it special—there are hundreds of cryptocurrencies that have tweaked bitcoin’s parameters to add or emphasize various features. (Also, it’s worth noting that litecoin’s creator sold all his holdings this past December, at the top of the crypto boom.) I’m not sure why Dash is being labeled as a privacy-enhancing cryptocurrency (that’s not really true) and, to be frank, I’m not convinced that regular consumers need “privacy coins.”
As for Ethereum, the potential value isn’t necessarily in the digital asset itself (known as “ether,” if you want to sound in-the-know), but in the distributed network on which it runs. If you’re into the idea of running software without a centralized server then you should read up on Ethereum; otherwise, just get on with your life.
Bitcoin is either a speculative gamble on the future of money or the answer to a lot of the world’s problems. (Much like turmeric is either a spice that goes well in soups or a miracle cure for cancer). In bitcoin’s latter scenario, it can fix things like the massive (and rather predatory) global market for remittances by cutting down on fees per transaction; enable all manner of frictionless investing by creating a smart-contract process underpinned by the blockchain; and enable people in the developing world to rent appliances and technology by enabling micro-payments via bitcoin. Sounds pretty altruistic to me.
Matt: “Speculative gamble” is exactly right. Cryptocurrencies may facilitate new markets, but there are many obstacles to overcome—legally and technologically—before blockchain can safely deliver on any of the grand claims made by its proponents.
Anytime somebody says, “blockchain can solve XYZ,” you’ve got to ask “How?” and “Why is that better than what currently exists?” They’re simple questions, but the answers (or non-answers) are often revealing.
Crypto gets a bad rap, but that’s totally unfair these days. Much like the internet in 1996 was associated with porn and gambling, the crypto world’s days as a cesspool of “heists, drug rings, and other criminal activity” are numbered, says Barhydt. The mainstreaming of bitcoin can be seen everywhere from its adoption by institutional investors and university endowments to, of course, this very post on Goop.
Matt: Slowly, but surely, cryptocurrency is shedding its shadowy reputation, moving from obscure message boards to Twitter, and from the dark web to the normal web. That seems to make bitcoin and its ilk mass-market products, so in that sense, yes, cryptocurrency is “going mainstream” (even if very few people understand what exactly they’re buying).
However, the broader comparison between the internet and blockchain is worryingly inaccurate. Don’t forget that the internet—and its predecessors—were useful long before the 1990s, helping to connect researchers across the country. Also, development of those networks was backed by the US government and supported by academic institutions. Thus far, nobody has proven much use for blockchain beyond cryptocurrencies and even the notion of censorship-resistant transactions seems a bit suspect, since traders must cash in or out through a broker.
I was thrilled to learn that what I presumed to be the hyper-masculine space of crypto might… not be so bad? “The crypto space is not Silicon Valley-centric, which gives me great hope for gender, racial, and socioeconomic diversity within the space,” Barhydt said. As far as I know, patriarchy pretty much exists everywhere, but at least I know crypto bros aren’t like those other tech bros.
Matt: The cryptocurrency community is certainly male-dominated, but based on a random sampling of attendees at Devcon (a big Ethereum conference in Prague last week) it seems like there are more women and people of color joining the space. As for “socioeconomic diversity,” that’s a stretch. Blockchain very much remains a rich man’s toy. That’s not so different from the rest of the tech sector, and obviously needs to improve.