Ethics of Email and Cryptocurrencies

I recently made the assertion that cryptocurrency is as unethical as email.

Having lived through similar trajectories for both, this is my reasoning.

When email started becoming popular (that is, when almost no businesses had email and its main use was college/university students and faculty communicating with other college/university students and faculty) it held much promise as a way for people around the globe to quickly and cheaply communicate with each other. Postal mail was slow, expensive, and occasionally unreliable. In comparison, email let people type a few words into a computer and at the press of a button deliver it quickly and cheaply to almost anyone (given they had an email address... still a fairly rare thing at that time).

Over time it became common for most people to have an email address. That led to a few major developments: its use as an authentication method, then as a target of business marketing, and then as an information source for email providers. All of these unfortunately had a corrupting influence.

The easiest to see is the business marketing, which quickly became spam. There were a few major pushes to deal with the problem at the edges: naive bayesian filters, SPF, etc, etc. Google entered the game and became a convenient, “free” way to deal with the problem by being an effective filter based on their massive corpus of email and users. Other major players (hotmail, yahoo, etc) started to catch up, and many friends and family eventually migrated to these. In current times, running a self-hosted email service which used to be fairly easy has become very difficult. Users will have difficulty emailing a user on any of the large entities unless specific dances and IP address shuffling and a variety of undocumented processes are followed to keep legitimate mail flowing. It's unfortunately a mess, but there are a few brave individuals and organisations still fighting the tide. The end result is that fewer people use it for actual communication than before and it's now more common to use messengers or SMS or a variety of other methods to communicate with actual humans. Business communication, shopping receipts, etc, still flow through email for the most part.

With all of this information flowing through a few providers, there are a few knock-on effects. One is that plaintext information about people's lives flows through companies that are able to use that to categorize and sell the information to advertisers. Even if a person does everything they can to avoid giving these entities their info, the fact that their contacts do means that much of the communication in the world still passes through their servers. This has chilling privacy implications that the world is only starting to wake up to.

Additionally, as email is the most common method today for password and account recovery, it becomes a prime target for those with malicious intent. Get access to an email address for even a short period, and that person's entire financial and social graph can be quickly exploited in ways that are difficult to undo. Incidences of this happening have become common enough that they don't even break into the news cycle anymore.

All that is to say, that email is a blessing and a curse. It's a major benefit and a risk with major downsides.

So how does that compare to the evolution of cryptocurrency?

Though cryptocurrencies have had a much shorter evolution timeframe, it follows a similar path but at a much higher velocity.

When bitcoin was first gaining traction it was mainly among geeks, libertarians, and anarchists who found the ability to move wealth around the world quickly and cheaply very appealing. No corporate or government middle men to take a large chunk of the value on its way. The ability for individuals to run their own nodes and miners to keep the system distributed and fair. It was email for money, and though there were few businesses or other individuals using it, it still had value and appeal. People could send money around the world at the press of a button and it would be delivered quickly and cheaply to almost anyone (who also had an address, but those were free and easy). Compared to the previous slow, expensive, and sometimes unreliable methods of moving money, this was clearly beneficial.

Over time it became common for others (especially in the financial world) to be interested in cryptocurrencies. That led to a few major developments: its appeal as an “investment” instead of a value exchange medium, the realization that it was possible to quickly create a similar one and get in on the “ground floor” causing a flood of Initial Coin Offerings (ICOs) where people tried to get rich quick, and its use as convenient means of extortion/extraction.

The investment (really gambling) potential has, in my opinion, hurt the field the most as it has had an accelerating influence on the other negatives. When regular people started looking to “invest” in cryptocurrencies that was somewhat a signal of its success. It had broken through being a fringe vehicle for people to pay each other back or purchase the odd pizza. The amount of money flowing in and around lead to bubbles and continues to generate wide swings in value that make it difficult to use as a currency. Paying for something when the value may be super high one day and super low the next is a tricky proposition.

That much value also brought out (more of) the greedy with “exchanges” that were poorly run either through incompetence or malice, and which cost many people a sizable amount of wealth. Then there's the ICOs where everyone and their doge wanted to get in on the ground floor and become insanely rich if their particular copy of cryptocurrency (which are almost all copies of bitcoin with some values tweaked) took off. That muddied the field and soured enough people that even today even the idea of a cryptocurrency is described as a 'ponzi scheme' by those who should know better.

Also unfortunate is that the pseudononymous property of most of the blockchains meant that it was even more convenient for scammers anywhere in the world to work their old scams and use bitcoin or similar as the means of extracting wealth from their victims. An unfortunately large number of people and businesses have first heard of 'bitcoin' via these scams or malware that have locked up their machines and demanding payment via these methods. That's not a great introduction to what is otherwise not a bad idea.

Cryptocurrencies are still growing and getting some major issues sorted out. “Proof of work” was a great invention in the beginning as a way to keep the playing field level, but has since become a substantial drain on the energy resources of the world, having sizeable environmental impact. It also has meant over centralisation of control with those who can create the largest mining farms. That has meant that needed improvements in the number of transactions that can be processed have been stalled or split, creating side coins that are then vulnerable to 51% attacks. There are still growing pains, and unfortunately many people invested too much too early and have lost a lot as a result. There alternatives in the works, but those have been slow to develop and get traction.

So, similar to email, cryptocurrencies are both a blessing and a curse. The major benefits of being able to quickly send money anywhere in the world without dealing with absurd fees and regulations has led to some strife and misfortune. There are still risks and major downsides.

That's not to say that the entire field is unethical. There are players who are fighting to improve it for good reasons, while there are also those who are corrupting the attempts.

It's still a developing field and interesting to watch and play with. It has risen from an amazing technological darling with great potential, to the beginning of its corruption with some silver linings in a very short period of time. It has taken about 5 years compared to the 25-30 years to reach the same state for email. Probably due to the more direct influence of money.

They will both live on for quite some time, and hopefully the upsides will outweigh the downsides when all is said and done.