Inside the ongoing argument over whether Bitcoin, Ethereum, and the

blockchain are transforming the world.

By Nick Paumgarten

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Audio: Listen to this article. To hear more, download the Audm iPhone app.

ot long ago, I was in Montreal for a cryptocurrency conference. My

N hotel, on the top floor of a big building downtown, had a roof garden
with a koi pond. One morning, as I had coffee and a bagel in this garden, I
watched a pair of ducks feeding on a mound of pellets that someone had left
for them at the pond’s edge. Every few seconds, they dipped their beaks to
drink, and, in the process, spilled undigested pellets into the water. A few koi
idled there, poking at the surface for the scraps. The longer I watched, the
more I wondered if the ducks were deliberately feeding the fish. Was such a
thing possible? I asked the breakfast attendant, a ruddy Quebecer. He smiled
and said, “No, but it is what I tell the children.”

My mind had been marinating overnight—and for more than a year,

really—in the abstrusities of cryptocurrencies and the blockchain technology
on which they are built. Bitcoin and, subsequently, a proliferation of other
cryptocurrencies had become an object of global fascination, amid prophecies
of societal upheaval and reform, but mainly on the promise of instant wealth.
A peer-to-peer money system that cut out banks and governments had made it
possible, and fashionable, to get rich by sticking it to the Man.
Some of this stuff I understood; much of it I still did not. If you’re not, say, a
computer scientist or a mathematician, the deeper you get into the esoterica of
distributed ledgers, consensus algorithms, hash functions, zero-knowledge
proofs, byzantine-fault-tolerance theory, and so on—the farther you travel
from the familiar terrain of “the legacy world,” where, one blockchain futurist
told me, pityingly, I live—the better the chance you have of bumping up
against the limits of your intelligence. You grasp, instead, for metaphors.

Blockchain talk makes a whiteboard of the brain. You’re always erasing,

starting over, as analogies present themselves. So, Montreal bagel in hand, I
considered the ducks and the carp. Let the pellets be a
cryptocurrency—koicoin, say. Would the ducks then be currency miners?
Every altcoin—the catchall for cryptocurrencies other than bitcoin, the
majority of which are eventually classified as shitcoin—has its own community
of enthusiasts and kvetchers, so perhaps the koi were this one’s. The
koicommunity. The breakfast attendant who had put out the pellets: he’d be
Satoshi Nakamoto
our koicoin Satoshi—as in Satoshi Nakamoto, the pseudonymous and still
unidentified creator of Bitcoin. Yes, the koicoin protocol was strong, and the
incentives appeared to be well aligned, but the project didn’t really pass muster
in terms of immutability, decentralization, and privacy. Koicoin was shitcoin.

A few hours later, I was at lunch in a conference room in another hotel, with a
table of crypto wizards, a few of them among the most respected devs in the
space. (Devs are developers, and even legacy worlders must surrender after a
while and ditch the scare quotes around “the space,” when referring to the
cryptosphere.) Four of these devs were researchers associated with Ethereum,
the open-source blockchain platform. Ethereum is not itself a cryptocurrency;
to operate on Ethereum, you have to use the cryptocurrency ether, which, like
bitcoin, you can buy or sell. (Among cryptocurrencies, ether’s market
capitalization is second only to bitcoin’s.) The devs were specimens of an
itinerant coder élite, engaged, wherever they turn up and to the exclusion of
pretty much everything else, in the ongoing construction of an alternate global
financial and computational infrastructure: a new way of handling money or
identity, a system they describe as a better, decentralized version of the World
Wide Web—a Web 3.0—more in keeping with the Internet’s early utopian
promise than with the invidious, monopolistic hellscape it has become. They
want to seize back the tubes, and the data—our lives—from Facebook,
Google, and the new oligarchs of Silicon Valley.

One of them, Vlad Zamfir, a twenty-eight-year-old Romanian-born

mathematician who grew up in Ottawa and dropped out of the University of
Guelph, was scribbling equations on an electronic tablet called a reMarkable
pad. He narrated as he scrawled. The others at the table leaned in toward him,
in a way that recalled Rembrandt’s “The Anatomy Lesson of Dr. Nicolaes
Tulp.” To the two or three people at the table who were clearly incapable of
following along, he said, earnestly, “Sorry to alienate you with my math.”
Zamfir is the lead developer of one strand of Casper, an ongoing software
upgrade designed to make Ethereum scale better and work more securely—an
undertaking thought to be vital to its viability and survival. “It’s shitty
technology,” Zamfir, whose Twitter bio reads “absurdist, troll,” told a
journalist two years ago.

Zamfir was showing the others some rough equations he’d worked out to
address one of the thousands of riddles that need to be solved. This particular
effort was an attempt (jargon alert) to optimize the incentive structure for
proof-of-stake validation—that is, how best to get enough people and
machines to participate in a computing operation essential to the functioning
of the entire system. “We’re trying to do game theory here,” Zamfir said. The
others pointed out what they thought might be flaws. “It doesn’t seem
reasonable,” Zamfir said. “But the math works out.” This summarized much
of what I’d encountered in crypto.

To his right sat Vitalik Buterin, Ethereum’s founder and semi-reluctant

philosopher king. Buterin, who is twenty-four, occasionally glanced at
Zamfir’s formulas but mostly looked into the middle distance with a
melancholic empty stare, sometimes typing out messages and tweets on his
phone with one finger. He was a quick study, and also he pretty much already
knew what Zamfir had come up with, and to his thinking the work wasn’t
quite there. “When the models are getting overcomplicated, it’s probably good
to have more time to try to simplify them,” he told me later, with what I took
to be generous understatement.

Lies and Truth in the Era of Trump

Buterin had been working, simultaneously, on another version of Casper. So

he and Zamfir were both collaborating and competing with each other. There
seemed to be no ego or bitterness—in their appraisal of each other’s work, in
person, or on social media, where so much of the conversation takes place, in
full view. Their assessments were Spockian, and cutting only to the Kirks
among us.

They had first met before a conference in Toronto in 2014. Zamfir was
amazed by Buterin, whom he called a “walking computer,” and he joined
Ethereum as a researcher soon after. Now good friends who meet up mostly at
conferences and workshops, they had greeted each other the day before in the
hotel lobby with a fervent embrace, like summer campers back for another
year, before quick-walking to a quiet corner to start in on the incentive-
structure-for-proof-of-stake-validation talk. Whenever and wherever Buterin
and Zamfir convene, people gather around—eavesdropping, hoping for scraps
of insight. The two are used to this and pay little heed. There were no secrets,
only problems and solutions, and the satisfaction that comes from proceeding
from one toward the other.

he first time I heard the word “Ethereum” was in April, 2017. A hedge-
T fund manager, at a benefit in Manhattan, was telling me that he’d made
more money buying and selling ether and other cryptocurrencies in the past
year than he’d ever made at his old hedge fund. This was a significant claim,
since the fund had made him a billionaire. He was using words I’d never heard
before. He mentioned bitcoin, too, which I’d certainly heard a lot about but,
like most people my age, didn’t really understand. I’d idly hoped I might be
just old enough to make it to my deathbed without having to get up to speed.

As the year wore on, that dream faded. The surge in the price of bitcoin, and
of other cryptocurrencies, which proliferated amid a craze for initial coin
offerings (I.C.O.s), prompted a commensurate explosion in the number of
stories and conversations about this new kind of money and, sometimes more
to the point, about the blockchain technology behind it—this either
revolutionary or needlessly laborious way of keeping track of transactions and
data. It seemed as if language had been randomized. I started hearing those
words—the ones I’d never heard before—an awful lot: “trustless,” “sharding,”
“flippening.” Explaining blockchain became a genre unto itself.

The dizzying run-up in crypto prices in 2017 was followed, this year, by a
long, lurching retreat that, as the summer gave way to fall, began to seem
perilous. As with notorious stock-market and real-estate bubbles, innocents
had been taken in and cleaned out. But both boom and bust reflected an
ongoing argument over what cryptocurrencies and their technological
underpinnings might be worth—which is to say, whether they are, as some
like to ask, real. Is crypto the future or a fad? Golden ticket or Ponzi scheme?
Amazon 2.0 or tulip mania? And what is it good for, anyway? It sure is neat,
but for now it lacks its killer app, a use that might lead to mass adoption, as
e-mail did for the Internet. “We need the hundred-dollar laptop, the iPod,” a
blockchain apostle told me.

Now and then, legacy titans voiced their scorn. Jamie Dimon, the chief
executive of J. P. Morgan, labelled crypto “a fraud”; Warren Buffett used the
phrase “rat poison squared.” Legions of skeptics and technophobes, out of
envy, ignorance, or wisdom, savored such pronouncements, while the true
believers and the vertiginously invested mostly brushed it aside. They had faith
that a new order was nigh. They pumped but did not dump.

Among a certain subset, it was both fashionable and integral to ignore the
fluctuations in price. The idea was to build and shore up a new system—for
everything from payments and banking to health care and identity—that was
either a replacement for the old one, or at least an alternative to it, one that
was borderless, independent of state control and of exploitation by Big Tech.
“It’s definitely nice to try to eke out some completely parallel kind of world
that’s totally separate from the existing one,” Buterin said. “It does interact
with the rest of society, and the goal is definitely to help improve the
mainstream world, but we’re on a different track.” Such an undertaking would,
at best, take many years and likely span several economic and investment
cycles. While the old armature rots, a new one rises alongside it, much as the
new Tappan Zee Bridge, over the Hudson, gradually took shape next to the
rusty old one it would one day replace. To Buterin, however, the benefits were
already clear. “The cryptocurrency space has succeeded at making certain
aspects of the international economy more open, when politics is moving in
the exact opposite direction,” he said. “I do think that’s a meaningful
contribution to the world.”
B uterin is a striking figure, tall and very lean, with long, fidgety fingers,
sharp elfin features, and vivid blue eyes, which, on the rare occasions when he
allows them to meet yours, convey a depth and warmth that you don’t expect,
in light of the flat, robotic cadence and tone of his speech. People often joke
about him being an alien, but they usually apologize for doing so, because
there’s a gentleness about him, an air of tolerance and moderation, that works
as a built-in rebuke to such unkind remarks. As we spoke, on the first
afternoon of the Montreal conference (the crypto life is a never-ending
enchainment of conferences, and is pretty much wall-to-wall dudes), he
aligned some items in front of him: pens, Post-its, phone. He forgoes most
social niceties and overt expressions of emotion but, when he finds questions
or assertions agreeable, is generous with notes of encouragement: “Yep, yep,
yep”; “Right, totally”; “Yes, yes, exactly.” Arguable remarks elicit a mechanical
“Hmm.” He seems to anticipate your question before you even know quite
what it is, but he forces himself to allow you to finish. He has a dry sense of
humor.

He said, “I definitely don’t have the kind of single-minded C.E.O. personality

that a lot of Silicon Valley V.C.s lionize—that thing of being ambitious and
wanting to win at all costs, like, basically, Mark Zuckerberg.” He was dressed
that day, as on the day before and the day after, in a gray turtleneck, black
track pants, and laceless Adidas sneakers over turquoise socks. He often wears
T-shirts with unicorns and rainbows. He likes to cite Lambos—as in
Lamborghini, the cryptobro trophy ride of choice—as shorthand for the
excessive trappings of wealth, which do not interest him. He’s about as
indifferently rich as a man can be. Although he sold a quarter of his bitcoin
and ether well before the prices began to soar last year, he is said to be worth
somewhere in the vicinity of a hundred million dollars. (He recently gave away
a couple of million dollars to a life-extension research project.) He has no
assistants or entourage. He owns little and travels light. “Recently, I reduced
my bag size from sixty litres to forty,” he said. “Forty is very tolerable. You can
go on fifteen-kilometre walks with it.” The Adidas, he said, were his only pair
of shoes. “Actually, I have another pair that’s in one of the many places I call
home.” These are friends’ apartments, where he sometimes sleeps for a few
nights at a stretch—in Toronto, San Francisco, Singapore, Shanghai, Taipei.
He especially likes East Asia. He speaks fluent Mandarin.

After Montreal, he was headed to Berlin and then Switzerland. His home,
really, is the Internet. At one point, I referred to an Ethereum outpost in San
Francisco, which I’d read about, as a “base of operations,” and he rejected the
term: “Home. Base of operations. The more you invent your own life style, the
more you realize that the categories that have been invented are ultimately, at
best, imperfect devices for understanding the world, and, at worst, fake.”

I’d been trying for months to talk to Buterin. In January, I reached out to his
father, Dmitry, who reported back that Vitalik was not interested in an
interview. “He is trying to focus his time on research,” Dmitry said. “He’s not
too excited that the community assigns so much importance to him. He wants
the community to be more resilient.” Dmitry Buterin, forty-six, is from
Grozny, in Chechnya. He studied computer science in Moscow and then
started a financial-software business, before emigrating to Canada, when
Vitalik was six. Dmitry settled in Toronto, with Vitalik; Vitalik’s mother, a
financial analyst, chose Edmonton. Vitalik, when he was three, got an old PC
and began fiddling around with Excel. By ten or eleven, he was developing
video games. “Vitalik was a very smart boy,” his father said. “It was not easy.
His mind was always racing. It was hard for him to communicate. He hardly
spoke until he was nine or ten. I was concerned, but at some point I realized it
is what it is. I just gave him my love.”

He also gave Vitalik his first glimpse of Bitcoin. It was 2011, somewhat early,
but Dmitry was an avowed anarcho-capitalist, a cynical child of Soviet and
post-Soviet Russia. For many others like him, especially in those early days,
the first encounter with Bitcoin was like a religious epiphany—powerful, life-
altering, a glimpse of an entirely different and perhaps more agreeable way of
ordering human affairs. “Bitcoin looks like money’s dream of itself,” the
technology journalist Brian Patrick Eha wrote, in “ How Money Got Free.”

“Before Bitcoin came along, I was happily playing World of Warcraft,” Vitalik
told me. He had already been nursing some inchoate ideas about the risks and
intrinsic unfairness of centralized systems and authority. He once told a
journalist, “I saw everything to do with either government regulation or
corporate control as just being plain evil. And I assumed that people in those
institutions were kind of like Mr. Burns, sitting behind their desks saying,
‘Excellent. How can I screw a thousand people over this time?’ ” Bitcoin
scratched this itch. But in many ways what drew him in was the elegance of
the system, invented, it seemed, by a rogue outsider out of thin air. It suited a
world view, a dream of a fluid, borderless, decentralized financial system
beyond the reach of governments and banks, inclined as they inevitably are
toward corruption and self-dealing, or at least toward distortions of incentive.
Buterin said, “If you look at the people that were involved in the early stages of
the Bitcoin space, their earlier pedigrees, if they had any pedigrees at all, were
in open source—Linux, Mozilla, and cypherpunk mailing lists.” These were
subversives and libertarians, ranging in political affinity from far left to weird
right, as often as not without institutional or academic stature or access. “I
found it immensely empowering that just a few thousand people like myself
could re-create this fundamental social institution from nothing.”

n the eighties, cryptographers and computer scientists began trying to

I devise a foolproof form of digital money, and a way to execute transactions
and contracts without the involvement (or rent-seeking) of third parties. It
was the man, woman, or group of humans known as Satoshi Nakamoto who,
with Bitcoin in 2008, solved the crux—the so-called double-spend problem. If
you have ten dollars, you shouldn’t be able to pay ten dollars for one thing,
then spend the same ten for another. This requires some mechanism for
keeping track of what you have, whom you gave it to, and how much they now
have. And that was the blockchain.
Definitions of blockchain are as various as the metaphors—bingo, Google
Docs, a giant room of transparent safes—that people use to try to illustrate
them. Broadly speaking, a blockchain is an evolving record of all transactions
that is maintained, simultaneously and in common, by every computer in the
network of that blockchain, be it Ethereum, Bitcoin, or Monero. Think, as
some have suggested, of a dusty leather-bound ledger in a Dickensian
counting house, a record of every transaction relevant to that practice. Except
that every accountant in London, and in Calcutta, has the same ledger, and
when one adds a line to his own the addition appears in all of them. Once a
transaction is affirmed, it will—theoretically, anyway—be in the ledger
forever, unalterable and unerasable.

Historically, records have been stored in one place—a temple, a courthouse, a

server—and kept by whoever presided. If you distrust central authority, or are
queasy about Google, this won’t do at all. With blockchains, the records,
under a kind of cryptographic seal, are distributed to all and belong to no one.
You can’t revise them, because everyone is watching, and because the software
will reject it if you try. There is no Undo button. Each block is essentially a
bundle of transactions, with a tracking notation, represented in a bit of
cryptographic code known as a “hash,” of all the transactions in the past. Each
new block in the chain contains all the information (or, really, via the hash, a
secure reference to all the information) contained in the previous one, all the
way back to the first one, the so-called genesis block.

There are other words that are sometimes included in the definition of
blockchain, but they are slippery, and grounds for endless parsing, asterisking,
and debate. One is “decentralized.” (Some blockchains are more decentralized
than others.) Another is “immutable”—the idea that, in theory, the past record
can’t be altered. (This is different from having your crypto stolen or hacked,
when it’s stored in an online “wallet.” That happens all the time!) Then there’s
“privacy.” The aspiration is for a digital coin to have the untraceability of cash.
Because bitcoin was, at the outset, the dark Web’s go-to tender for the
purchase of drugs, sex, weaponry, and such, many assumed that it was private.
But it isn’t. Every transaction is there in the ledger for all to see. It is,
fundamentally, anonymous (or pseudonymous, anyway), but there are many
ways for that anonymity to be compromised.

The odds are high that someone, somewhere, has attempted to make an
explanation like this one to you. The chain-splainer is a notorious date spoiler
and cocktail-party pariah. Here he comes—you’re trapped. You should have
known better than to ask about mining.

Mining is a reward system—compensation for helping to maintain and build a

blockchain. The work of establishing and recording what’s legit takes
machinery, memory, power, and time. Cryptocurrency blockchains require
that a bunch of computers run software to affirm (or reject) transactions—it’s a
kind of automated convocation. During this ritual, the computers in the
network are competing, via brute guesswork, to be the first to get the answer
to a really difficult math problem. The more computational power you have,
the more guesses you can make, and the more likely you are to get the answer.
The winner creates a new block and gets a reward, in, say, bitcoin—new
bitcoin, which has not previously been in circulation. (Satoshi ordained that
there be a finite number of bitcoin ever created—twenty-one million—so that
no one could inflate away the value of existing bitcoin, as, say, the Federal
Reserve does with dollars. Other cryptocurrencies, including ether, don’t
necessarily have finite supplies.)

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This system is known as Proof of Work. The problem-solving exercise is proof

that the computers are doing the work. This approach has serious and, some
would say, fatal, flaws. First, it requires a tremendous amount of electricity.
This year, it is said, the Bitcoin network will use as much energy as the nation
of Austria, and produce as much carbon dioxide as a million transatlantic
flights. Mining rigs—computers designed specifically to do this work—are
thirsty machines. Mining farms tend to sprout up where juice is cheap
(typically, in proximity to hydropower projects with excess capacity to unload)
and where temperatures are low (so you don’t have to burn even more
electricity to keep the rigs cool). There are open-air warehouses in remote
corners of sub-Arctic Canada, Russia, and China, with machines whirring
away on the tundra, creating magic money, while the permafrost melts.
Second, a small number of mining conglomerates, or pools—many of them
Chinese—have wielded outsized influence over the network and the decisions
that get made. Last month, one of the biggest of these, Bitmain, confirmed
plans to go public.

The alternative, which Zamfir and Buterin were working on in Montreal, is

called Proof of Stake. In this scenario, the holders of the currency in question
become the validators, who typically take a small cut of every approved
transaction. Theoretically, the more crypto you have, the more influence you
have, so PoW partisans consider PoS to be plutocratic as well—a new gloss on
the old problem of too much in the hands of too few.

n 2013, Buterin travelled to San Jose for a Bitcoin meet-up, and felt that
I he’d encountered like-minded people for the first time in his life—a
movement worth devoting himself to. “The people that I had been searching
for the whole time were actually all there,” Buterin told me. Zooko Wilcox, a
cryptographer, recalled Buterin telling him, “This is the first technology I’ve
ever loved that loves me back.” Buterin had been writing blog posts about it
for five bitcoins per post. Together, he and Mihai Alisie, a Romanian
blockchain entrepreneur who’d read his posts, founded Bitcoin Magazine.
Buterin had a knack for explaining things—at least to an audience already
primed to understand. But, as he travelled around the world to Bitcoin meet-
ups, he began to think that the technology was limited, that attempts to jury-
rig non-money uses for this digital-money platform was the computational
equivalent of a Swiss Army knife. You basically had to devise hacks. He
envisaged a one-blade-fits-all version, a blockchain platform that was broader
and more adaptable to a wider array of uses and applications. The concept
behind Bitcoin—a network of machines all over the world—seemed to be a
building block upon which to construct a global computer capable of all kinds
of activities.

In the mid-nineties, Nick Szabo, a cryptographer and early cypherpunk,

coined the term “smart contract,” which two decades later became the basis of
Ethereum. This is a means of setting and enforcing the terms of an agreement
without a middleman—no lawyer, notary, bookie, or referee. The terms are
enshrined in and triggered by code, rather than by someone’s interpretation of
legal language or fit of pique. The proposition is that computer code, unlike,
say, Hammurabi’s or the Federal Reserve’s, is impartial—that it can eliminate,
or at least greatly reduce, the role of toxic subjectivity. This could cover a
simple exchange of digital money, or the sale of a house, or an insurance
payout, or a bet. Szabo’s preferred metaphor was the vending machine. You
don’t generally require someone to vouch for the machine. In a smart-contract
world, as he described it, if a borrower hasn’t paid off his car loans in time his
car just stops working, as per the terms of the loan, which are embedded in the
code and integrated into the mechanism of the car.

The reliability of the code, and of the system for checking it, would discharge
humans from having to read minds and look into hearts, or from having to pay
someone else to make up for the fact that they cannot. As it stands, here in the
dusty old legacy economy, we have to pay other people, and squander time and
resources, to establish a modicum of trust. It’s a legalized kind of protection
racket. A favorite example is title insurance; an entire industry exists to prove
that the person selling you a house is the owner in good standing.
Provenance—of property, both real and intellectual—is big business, but, to
the blockchain believers, it need not be. Code shall banish the odious frictions
and costs. “Blockchains are more fundamentally about increasing our ability to
collaborate across these large social distances,” Buterin said. “It’s the trust
machine bringing more trust where there was less trust before.”

Another thing we presently outsource, perhaps to our peril, is our identity: the
affirmation of who we are, along with whatever data sticks to that. Identity as
we know it now is typically maintained by a centralized state—by the taxman,
the department of motor vehicles, the police. Then it spills out into the world,
often without our knowledge or consent, through our transaction histories,
browsing habits, and unencrypted communications. In the Google era, we
spray aspects of ourselves all over the Internet. The blockchain innovation is
what’s often called “self-sovereign identity,” the idea that you’ll control and
parcel out information about yourself, as you wish. The Ethereum network
maintains the attestation.

Then there are those vast realms where the old intermediaries hardly exist at
all. The trust machine’s most obvious beneficiaries are said to be the
disenfranchised and the so-called unbanked—the billions of humans around
the world with no passports or access to any reliable kind of financial system.
We may find it harder to see the utility here in our daily lives, where we can
rely on Citibank, Visa, Venmo, and Western Union to handle our transactions
and keep track of all the money flying around. Amid such a sturdy (if
extractive) system, the blockchain can seem like a back-office fix, a change in
the accounting scheme, of interest to the systems geeks and bean counters but
not to oblivious customers. But if you are, say, a Venezuelan citizen or a
Turkish journalist, or a refugee from Syria or Myanmar, the prospect of being
able to maintain and render portable both money and identity could be hugely
liberating, perhaps even life-saving. Unless you forget your private key.

n November, 2013, Buterin wrote up a white paper—cryptoland is a

I blizzard of white papers—proposing a new open-source, distributed
computing platform upon which you could build all kinds of smart-contract
applications and uses, as well as other coins. He called it Ethereum. “I was
browsing a list of elements from science fiction on Wikipedia when I came
across the name,” he said then. “I suppose it was the fact that [it] sounded nice
and it had the word ‘ether,’ referring to the hypothetical invisible medium that
permeates the universe and allows light to travel.” He expected that
experienced cryptographers would pick his proposal to pieces. Instead,
everyone who read it seemed to be impressed by its elegance and ambition.
Among the early enthusiasts were a handful of Toronto Bitcoiners who’d got
to know one another at informal meet-ups and in a Skype group chat—“a
regular call with serious people,” as one of them recalled.

The foundational gathering, in the Ethereum creation story, occurred at the

North American Bitcoin Conference in Miami, in January, 2014. These
serious people decided to rent a beach house, and there, in a week or so,
banged out a fuller sense of what Ethereum, Buterin’s “computer in the sky,”
as he described it to me, might become. They defined themselves as founders.
Among them were Gavin Wood (a British programmer who later took on the
role of Ethereum’s chief technology officer), Charles Hoskinson (a Colorado
programmer who was briefly the C.E.O.), and Anthony Di Iorio, a
Torontonian who was underwriting the project. Di Iorio had invited a fellow
Toronto Bitcoiner named Joseph Lubin, then forty-nine, who, with a sense of
the import of the occasion, brought along the reporter Morgen Peck, to bear
witness. She later described it as “an after-hours grease trap” for dozens of
additional participants in the conference. (The online publication Backchannel
published her story, as well as a photograph she’d snapped of Buterin working
at his laptop one morning while the rest of the house slept. Peck says that the
pot pipe on the table next to him wasn’t his.)

Buterin’s Miami début of Ethereum was a hit. Nineteen at the time, he

dropped out of the University of Waterloo, where he’d been studying
computer science, and devoted himself full time to the Ethereum project. “We
realized this was going to be big,” Hoskinson recalled.

The founders assumed different roles. Lubin, who had Wall Street experience,
was the chief operating officer. “That’s one of the silly titles we chose to give
ourselves,” Lubin told me. “It didn’t really mean anything in that weird open-
source project.” (Buterin dubbed himself the C-3PO.) Lubin positioned
himself as the grownup in the room, the worldly chaperon. Wood, with whom
he eventually clashed, said, “He wanted to be the mentor, the Obi-Wan
Kenobi, but unfortunately he became the Darth Vader.”

Months of work ensued, in which the founders came up with a lexicon and a
conceptual framework both to define Ethereum in lay(ish) terms and to
inoculate it against possible legal consequences. When the idea arose to sell
new cryptocoins to the public, to raise money for the project, Lubin, along
with Hoskinson, recognized that this might be a fraught enterprise. “Some
people, including me, pointed out that it looks like we were going to raise tens
of millions of dollars from bitcoin nouveau riche and that we might want to
talk to some lawyers—that we should be concerned that we might be selling
an unregistered security to Americans,” Lubin said. It was an exercise in
semiotics with vital legal implications.

“In that process, we pretty much defined what Ethereum is and what ether is,”
Lubin said. “We realized—I realized—that we had an opportunity to tell
people what this is, and there was a good chance that they were just going to
accept our understanding and that we could create reality that way. And it
seems to have worked. We seem to have created a reality.” Language is
consciousness: they defined ether as a “crypto-fuel,” which one needs to run
programs and store data on the Ethereum system. Wood, at a meet-up in New
York, called it “a computer at the center of the world,” like a sixties-era
mainframe that everyone everywhere can use.

The founders took to calling it “the world computer,” and debated the best
corporate conveyance. Should it be a for-profit entity funded by an I.C.O. or
by venture capital—like Ripple, an earlier cryptocurrency protocol launch—or
a not-for-profit foundation, with independent oversight? Different groups
among the eight founders staked out different positions, with some favoring
for-profit, others not-for-profit. “Things started souring pretty quickly,”
Hoskinson recalls. Wood told me, “There was this sense, which I found
distasteful, that Vitalik was the goose that laid the golden egg, and he was
treated in that objectivizing form by everyone else, like he was some alien from
Mars sent to help us all.”

“There was a lot of drama,” Lubin said. “It got really complicated.” Broadly
speaking, the developers, among them Wood, were wary of the motives and
methods of the business guys, who in turn felt that the developers lacked
practical sense and an appreciation for the allure of a big payday.

Eventually, the founders agreed to let Buterin decide. “I was definitely the
person that people had respected and trusted more than they trusted each
other, which was unfortunate and sad,” Buterin said. He was also, he said,
“seemingly the most harmless of the group.”

“Vitalik was innocent and unprepared,” Dmitry Buterin told me. “He had to
learn a lot of tough lessons about people.”

Six months after Miami, the whole team holed up in a house in Switzerland,
in the canton of Zug, an old commodities-hedge-fund tax haven now known
as Crypto Valley. This was the first time all of the founders were in one room
together. Buterin, after some time alone on the patio, told Hoskinson and
another founder that they were out. Later, he made clear that Ethereum
would proceed as a nonprofit. “It was a shitty time, and it was a shitty thing
for Vitalik to have to do,” Wood said.

“That was one of those few nuclear bombs that I threw into the Ethereum
governance process,” Buterin told me. “I felt very strongly that Ethereum is
meant to be this open-source project for the world,” he continued. “Having a
for-profit entity be at the center of it felt like going way too far in this
centralized direction.” The remaining founders established the nonprofit
Ethereum Foundation, with headquarters in Zug, to help fund development.
(Ethereum itself is based nowhere, and in traditional corporate terms is as
substantial as the ether.)
And so the founders, driven by discord and the appeal of more lucrative
endeavors, decentralized themselves. “We all scattered to the winds,”
Hoskinson told me. He eventually started a crypto company called IOHK,
and a blockchain project called Cardano. “Now I run my own company, with a
hundred and sixty people,” he told me. “I’m basically a billionaire. At this
point, I couldn’t care less about those six months of my life with Ethereum.”

hat would a world reconstituted by smart contracts look like? One

W grasps at legacy tableaux: office towers emptied of bankers, lawyers,
and accountants; crypto-utopian settlements on hurricane-ravaged Caribbean
islands; open-air barns out on the steppes, stacked with bitcoin-mining
computers. In May, I attended the Ethereal Summit, a conference held in a
former industrial glassworks in Maspeth, Queens. The symbolism—new order
sprouting up in the derelict precincts of the old—was on the nose, as was the
vibe: food trucks, local craft beers, a “Zen Zone” meditation tent. Here was
blockchain as life style. Two big bathrooms, side by side, started out unisex,
but by the afternoon of the first day the conference attendees, at the urging of
no centralized authority, were self-sorting: men to the one on the right,
women the one on the left.

On the main stage, a roster of luminaries and evangelists served up a steady

diet of jargon stew, but elsewhere in the old factory you could find spoonfuls
of sugar—use cases for English majors. One was a presentation of a supply-
chain startup called Viant, which had deployed the blockchain to track fish
from “bait to plate.” A video depicted a yellowfin tuna caught off Fiji on April
10th. And here it was, a month later, as sashimi, its provenance indisputable,
trusted, immutable, thanks to the blockchain. Everyone surged forward for a
free taste—plate-to-mouth still requiring humans to jostle and reach. There
was a panel discussion with the founders of Civil, an attempt to use the
blockchain to remake the journalism business, amid the wreckage wrought by
the Internet and the demise of the advertising model. And, in a small brick
outbuilding, there was a demonstration of something called Cellarius, which
was, according to its founder, Igor Lilic, (1) a crowdsourced sci-fi story, set in
the year 2084, after the activation of an artificial super-intelligence; (2) a
community of artists and collaborators; and (3) a technological platform that
its developers were gradually building out. “It’s a hypothesis,” Lilic said. “The
long-term goal is to figure out some new economics of intellectual property.”
A worthy goal, Lord knows, and yet I failed to understand what it had to do
with distributed ledgers or consensus algorithms.

The host of the conference was ConsenSys, a company that Lubin started, in
Brooklyn, in 2014, after he left Ethereum. ConsenSys is an incubator of new
businesses and projects that operate—or will, or would—on the Ethereum
blockchain. It is the Ethereum community’s most prominent and ubiquitous
developer and promoter of what are called DApps, for decentralized
applications, less for stuff like tuna fish or sci-fi than for such fundamentals of
commerce as property ownership, identity management, document
verification, commodities trading, and legal agreements—the rudiments of
what Lubin calls the infrastructure of a new decentralized economy.

ConsenSys’s home base, in a graffittied industrial space in Bushwick, is a

defiant, almost ostentatious expression of an anti-corporate ethos—a nod to
crypto’s anarchic underpinnings, but with a bit of pretense, since ConsenSys
consults with businesses and governments seeking help in building private
blockchains. A friend who has done some work with them said, “They have
billions of dollars to spend. Why is it like this? Why don’t they have an office
on Twenty-eighth Street in Manhattan, like everyone else?” The firm now has
more than a thousand employees, in offices around the world. (Lubin says that
they’ve hired a lot of people from I.B.M.) “They have so much money,”
another member of the community said. “The approach is, throw it all at the
wall and see what sticks.” So far, not much has. They can cite dozens of
projects in various stages of emergence; none has morphed into a killer DApp.

Lubin is said to be the largest holder of ether and is estimated to be worth

more than a billion dollars. A few people told me that he had started
ConsenSys to enhance the value of his ether. When I asked him about this, he
scoffed. “What a poor strategy that would be for making money,” he said.
“Like, yeah, I’m going to build a company on an ecosystem that doesn’t exist,
so I can increase the value of my Internet magic-money holdings.” He went
on, “The people who were in the space early were there for philosophical
reasons, for political or economic reasons not tied to their personal wealth.”
ConsenSys has instituted a policy that forbids employees from talking about
price. I went to see Lubin in Bushwick one day, after ether, and other
currencies, had suffered a huge drop in value overnight. When I asked him
about the plunge, he said, “Who gives a fuck?” Not a cryptobillionaire,
apparently.

For a great number of people at Ethereal, there was an evangelical

fervor—techno-utopianism in a new guise, unaffiliated, for the most part, with
Silicon Valley and the cults of Elon and @Jack. The director of the Ethereum
Foundation, Aya Miyaguchi, told me, “We want to change the world. We
actually believe in it.”

Rent the Runway Wants Daniel Fish’s Dark Take Bill Irwin Goes Hudson
to Lend You Your Look on “Oklahoma!” Valley Gothic
By Alexandra Schwartz By Sarah Larson By Anna Russell
The first time I met Lubin, who was with his chief marketing officer, Amanda
Gutterman—over tacos in Williamsburg, in the summer of 2017—Gutterman
said, “We call him white Morpheus,” in reference to the Laurence Fishburne
character in “The Matrix.” (It started as a meme on Reddit.) Lubin summoned
a parallel reality, where heretofore unempowered citizens would be able to
perform amazing feats. Like Buterin, he rejects the primacy, in business, of the
charismatic founder, and yet the world can seem to insist on it. If Buterin,
who is often depicted in fan art as Jesus with a Lambo, is a kind of blockchain
messiah, Lubin is its Paul, both in his tireless evangelism and in his attention
to practical, worldly matters. He is an Ethereum true believer, but he is also a
proponent of so-called enterprise applications—actual business uses, often on
private blockchains—which could get the legacy world interested in hastening
its own obsolescence.

“Joe gets criticized for trying to push Ethereum into enterprise,” Emin Gün
Sirer, a professor of computer science at Cornell who has worked with
Ethereum, says. “You have two sides to it all. The one that appeals to the
fringe counterculture versus the one where someone has to pay all these
developers’ bills. One to appeal to the cypherpunk kids, another to appeal to
the adults in the room.”

Lubin has a shaved head and the flat accent of a native Torontonian. In a
roast-tinged panel discussion at Ethereal, the comedian Ronny Chieng, from
“The Daily Show,” worked Lubin over for his fashion sense (stone-washed
jeans and big swag-bag T-shirts), for the fact that his features don’t seem to
move when he talks (“You’d get more investors if you moved your face”), and
for his apparent inability to explain anything without using words that were
invented less than two years ago.

Reared in Toronto (his father is a dentist, his mother a retired real-estate

broker), Lubin played squash and studied electrical engineering and computer
science at Princeton. Among his roommates were Mike Novogratz, now a
hedge-fund investor, who in 2017 became the Wall Street face of the crypto
boom, and a wrestler named Richard Tavoso, known as Fudge, who kept a
boom
record of who owed what to whom in their regular poker games. Fudge’s
ledger became a handy analogy for other roommates and friends, thirty years
later, when they followed Lubin and Novogratz into the blockchain boom.

After graduating, Lubin tried to make a go of it as a pro squash player while

working as a researcher on artificial-intelligence experiments, helping to build
nervous systems and visual systems for robots. He married young, had a son,
got divorced. There followed some years of programming and Wall Street
work, including at Goldman Sachs and then at a banking consortium called
Identrus. “That’s where I learned about cryptography, and how to write
software with cryptographic systems,” he said. He later developed a program
for trading currencies and securities, started a fund, and did very well.
Nonetheless, his encounters with the global financial markets, before and after
the 2008 collapse, and his earlier immersion in science fiction and cyberpunk
culture, put him in a quasi-apocalyptic frame of mind. (He has entertained the
theory that 9/11 was an inside job.) He looked into buying land in Peru or
Ecuador—“This was out of fear, a scarcity mind-set, the expectation of a
cascading collapse of financial systems,” he said—but instead began planning a
vertical farm in Brooklyn. Before he could see that idea through, he became
friends with a Jamaican model and actress and moved to Kingston to help her
launch a musical career. They got a house, built a recording studio, recorded
some songs, and made some videos. “Then things kind of fell apart,” he said.
“It just got very complicated. And then Ethereum happened.”

He’d got into Bitcoin in 2011, when he came across the Satoshi Nakamoto
white paper on Slashdot and began studying Bitcoin and new protocols in the
works. But it was Buterin’s white paper that changed his life. “Vitalik’s paper
was the best that I had read,” Lubin said. He met Buterin at a meet-up in
Toronto on New Year’s Day, 2014. (I asked Lubin what that was like. “We
talked about blockchain,” he said.)
Lubin gets a twinkle in his eye when he talks about what he sees as the first
opportunity in human history to create systems without the traditional clerical
class, the old priesthood of the record keepers, rune readers, and bean
counters. Still, he acknowledges, “You’ll certainly need priests to build these
systems.” These would be the top-end coders, the devs. William Shatner has
called crypto “cyber-snob currency.” In some respects, we’d be replacing one
priesthood with another.

overnance” is a dismal word, but in the crypto realm it has profound

“G implications. It concerns how decisions are made, and who gets to
make them. Each blockchain—as a technology, a community, and a social
experiment—is an exercise in achieving consensus. The quest is a human one,
so the mechanisms that rule it reflect the priorities of the mechanics.
Technology, as we learn time and again, is no cure for human nature. Power
accrues, even when the goal is to eliminate it. Szabo, the father of smart
contracts and a staunch libertarian, tweeted recently, “Blockchain governance
generally comes in only three varieties: (1) Lord of the Flies, (2) lawyers, or (3)
ruthlessly minimized.” Someone asked, “Why ruthless?” and Szabo wrote,
“Otherwise the children or the lawyers will win.”

Sometimes it can seem less “Lord of the Flies” than “Life of Brian”—a comical
exercise in the narcissism of small differences. The Judean People’s Front
versus the People’s Front of Judea. Last year, when bitcoin miners and
developers clashed over how to increase the efficiency of the network, a faction
split off—a maneuver called a hard fork—and created a new version of bitcoin,
called Bitcoin Cash, whose most visible cheerleader is Roger Ver, a libertarian
sometimes called Bitcoin Jesus. (He likes to say that digital money is as
important an invention as the wheel, electricity, and the transistor.) Ver, who
lives in Japan, was sentenced to ten months in prison for selling explosives
online; this seems to have both inflamed his mistrust of institutional authority
and enhanced his credibility as an anarcho-capitalist. Ver regularly declares
that Bitcoin Cash is the true bitcoin, in keeping with the ideas set forth by
Satoshi (as opposed to those espoused by all the “Faketoshis”).
The guiding principle in cryptoworld’s regular schisms is a version of “Love it
or leave it.” The viability of any particular upgrade or project is measured by
the extent to which people decide to adopt or participate in it. They do so
either on the merits—a common invocation is D.Y.O.W. (do your own work)
—or on the basis of the reputations of those proposing, endorsing, or
criticizing any particular idea.

In the absence of formal hierarchy, reputational capital is paramount. The

campaign to acquire it is waged largely on social media and on conference-
panel stages. As the crypto stars strut their stuff, declare their allegiances, and
taunt their rivals, you wind up with shifting, indistinct pecking orders. “Our
governance is inherently social,” Vlad Zamfir said, on one such stage. “People
who are more connected in the community have more power, a kind of soft
power.”

“There’s definitely, in all blockchains and cryptocurrencies, some notion of

what I call the high priest,” Buterin told me. “A high priest is basically
someone who has high status inside a cryptocurrency community for whatever
reason, and sometimes high priests say things. I don’t know if you want to mix
religious metaphors, but they can issue fatwas.” Buterin wasn’t excluding
himself. He has no real institutional writ or hierarchal role and yet is, by
default and by consensus, Ethereum’s face and figurehead, as much the arbiter
as on the day he paced the patio in Zug. It’s a position that he’s not entirely
eager to maintain. “The Ethereum community can’t survive in the long term if
it’s completely dependent on me,” he said. “I think the right way to do that
isn’t to subtract myself. It’s to add other people that can complement and
potentially replace myself. There have been more and more outspoken core
developers. I’ve acted in deliberate ways, for example, to encourage more high
priests in the Ethereum community to show up. One of the things you can do
is tolerate them.”
“Perceived authority and real authority blur,” Hoskinson told me. “Vitalik
hasn’t been elected to anything or endowed with any actual power. But when
he speaks millions of people around the world listen.”

Or they attack him. “Vitalik has shouldered the weight of the world—of the
unbelievable number of total assholes picking at him from a distance on the
Internet, and he’s done it at the age of nineteen, twenty, twenty-one, with a
lot of grace,” Lubin said. Last year, someone posted on a chat forum that
Buterin had died in a car crash. The price of ether plummeted. To counter the
report, Buterin posted a photo of himself, with a blockchain-appropriate time
stamp—an Ethereum block number and its corresponding hash, written on a
piece of paper. The price stabilized.

The most infamous crisis in the governance of Ethereum was the demise of
the DAO—short for Decentralized Autonomous Organization. The DAO was
a crowdsourced venture fund, a way of using smart contracts to cut out
traditional venture capitalists, reduce fees, and give access to regular civilians,
who contributed ether and voted on which projects to invest in. Two early
aspirants were a German smart-locks startup (for rental properties and
bicycles) and a French autonomous-electric-minicar ride-sharing venture. At
the time, it was the biggest crowdfunding ever—the equivalent, then, of about
a quarter-billion dollars, and, now, of about two billion. Within weeks, it was
hacked. There was a loophole in the code; the hacker, who could repeatedly
take money out of the DAO before the transfers were recorded, drained more
than a quarter of the funds.

“Vitalik was powerless,” Emin Gün Sirer, the Cornell professor, who, with
Zamfir, had been involved in critiquing the DAO, told me. Along with others,
Sirer said, Buterin “had to spam Ethereum with other transactions to slow
down the hacker.”

Some in the Ethereum community, including Buterin, Sirer, and Zamfir,

argued for what was, effectively, the reversing of the transactions—altering
what was supposed to have been unalterable—in order to restore the funds to
the people who’d invested in the DAO. Others insisted that doing so would be
a violation of the principle that blocks must remain immutable. “We were all
wondering, Is code law?” Sirer recalled. “What is code? What is law? What is
the covenant? It was almost epistemological. We were a bunch of computer
geeks way out of our depth.” A schism ensued—a hard fork. The majority of
Ethereum users followed Buterin and other prominent figures onto a new
blockchain, while the fundamentalists stayed on the old chain, according to
which the ether had been lost. The latter became known as Ethereum Classic,
where, theoretically, the hacker, whoever it is, still holds stolen ether.

“A lot of people who objected to the hard fork were not of the Ethereum
community,” Zamfir has said. “It was more generally blockchain people
concerned about the precedent.”

Sirer said, “If you are courting illegal money from, you know, cartels and drug
dealers, you have to maintain immutability. That’s the Bitcoin mentality.”

To make a perilous generalization, the Bitcoin community seems to be more

contentious and confrontational than Ethereum’s, especially when it comes to
internecine battles. The bitcoin-or-bust crowd, including the so-called
HODLers, play a bruising game on Reddit and Twitter. (HODL, derived from
a drunken typo of “hold” five years ago on a Bitcoin message board, is
shorthand for holding onto one’s bitcoin, come hell or high water, and is a
Bitcoin maximalist battle cry.) In some respects, Bitcoin is as much a critique
of the fiat money system as it is an alternative to it. As such, there’s a side to it
that seems always to be scrapping for a fight. It wants you to hold its beer.
Ethereum retains some of Bitcoin’s scrappy, libertarian characteristics, but, as
a foundation for many other uses, it is by nature more fungible. The Ethereum
network is a platform for other currencies and tokens. It’s a bigger tent.

“Ethereum folks are nice,” Sirer said. “Many are latecomers to the Bitcoin
clique. They’re Obamaesque. They like to ponder and think.”
At any rate, Sirer said, “the hard fork was the best thing that happened to
Ethereum. It showed that Ethereum took errors seriously. And that it was
practical and not dogmatic. It chose the right thing over the letter of the
law—or, really, the letter of the code.”

small sliver of the population understands blockchain technology well

A enough to engage in fierce, esoteric debate over the meaning and relative
importance of various ideas and terms. At the highest levels, everyone
practices a kind of obscurantism, unwitting or otherwise. Elsewhere, people
fake it. An investor who has met with Joe Lubin and Mike Novogratz, and
who is getting up to speed for the purpose of a token sale for a publicly traded
company, told me one day, with regard to levels of understanding, “Joe, I’m
guessing, is an 8.5 or maybe even a 9, out of 10. Vitalik, whom I’ve never met,
I’m guessing is a 9.2. I’m probably a 2.5, maybe a 3. My tech guy is probably a
7, and I’ve met a few 4s and 5s who work in the space. But most every trader
coming in from other fields that I’ve met is 2.5 or lower.”

Peter Smith, the C.E.O. and co-founder of a cryptocurrency platform called

Blockchain, told me one afternoon, “This is my life’s work, inventing a
category, and I give myself a 4 out of 5. I don’t know anyone who’s a 5.”

A ConsenSys engineer said, “At a certain point, you break through it, you
come to understand it all, and then the door closes behind you, and then you
just get it but can’t explain it. All the words you use to explain it are words
people on the other side of the door don’t understand.”

A friend of mine who is involved in a blockchain startup remarked that people

keep trying to explain the underlying technology—the engine under the hood
rather than the car on the road. “It’s like they’re trying to describe e-mail to
people, and instead of saying, ‘You can send messages to people over the
Internet,’ they’re saying, ‘There’s a protocol called S.M.T.P., which locates a
set of rules for the movement of files from one to another.’ ” And yet he also
complained about what he calls the incorrigibles, the Luddites who refuse
even to try, whom he likened to the people in an office who profess not to
know how to work the copy machine.

Public understanding of the space has also been hindered by an abundance of

silliness. The more frivolous uses and manifestations are the jazz hands of
silliness
crypto, distracting from subtler virtues or cynical schemes. It was somehow
unsurprising when the founders of a crypto debit card called Centra, which
had been endorsed, to widespread sniggering, by the boxer Floyd Mayweather,
Jr., and the producer DJ Khaled, were arrested for securities and wire fraud.
(They pleaded not guilty.) The gold rush attracts a cartoonish array: Ashton
Kutcher, 50 Cent, Jamie Foxx, Paris Hilton, Brock Pierce (former child star of
“The Mighty Ducks”), and, of course, the Winklevoss twins, who plowed their
Facebook settlement money into bitcoin and were later widely cited as crypto’s
first billionaires.

It is now a well-worn joke that one need only throw the word “blockchain”
around to raise money or to seem smart. When the Long Island Iced Tea
Corp. changed its name to Long Blockchain Corp., its share price nearly
tripled, even though it hadn’t really attempted to articulate any case for how a
distributed ledger might be a panacea for the hawking of sugary drinks. Every
few weeks, it seems, there’s a new entry in the did-you-hear category of goofy
alt-I.C.O.s. One day it’s Bananacoin, offered by banana plantations in Laos
and pegged to the price of a kilo of Lady Fingers, and another it’s Dentacoin,
a dentistry token, which—but, seriously—at one point had a market cap of
more than two billion dollars. Coinye (the Shitcoin Formerly Known as
Coinye West) might have had a shot, too, had its developers not been sued by
Kanye for trademark infringement. Jesus Coin (a parody coin that has
nonetheless been traded like a real one) and Christ Coin (a non-parody coin
that has been shunned as though it were a spoof) have encountered no
namesake legal issues. Nor has Mike Tyson Bitcoin, a digital-wallet app,
about which Tyson said, “In no way do I profess to be any kind of bitcoin
currency guru. It just seems very interesting, and I’m intrigued with the
possibilities.” Turns out there is even a Koi Coin, worth a fraction of a penny.
Last December, as the price of ether was shooting up, the most popular DApp
on Ethereum was CryptoKitties, a virtual-pet-collection racket—you adopt as
a pet (or pets) unique bits of code that are stored on the network. Founder Cat
#18—whose bio reads, in part, “When no one’s home, I invite my pals over
and we listen to Rihanna. I look forward to riding unicorns with
you”—changed hands last year for the ether equivalent of a hundred and ten
thousand dollars. The popularity of CryptoKitties clogged the network and
exposed how ill-equipped Ethereum, as currently configured, is to handle the
kind of volume it would have to in order to be anything close to as
transformational as its adherents claim it will be.

ver the course of a few days—Blockchain Week in New York, in

O May—I saw Lubin onstage at three conferences taking on doubters of
different kinds. The first was Nouriel Roubini, a.k.a. Dr. Doom, the
economist best known for calling the 2008 financial meltdown. The organizers
of the conference, called Fluidity, had promoted this debate as a kind of
prizefight. A standing-room-only crowd of true believers and opportunists
crammed into the vast domed hall of a former Gilded Age savings bank in
Williamsburg. Roubini quickly warmed to the role of skeptical grouch.
“Ninety-nine per cent of all crypto transactions are occurring in centralized
exchanges,” he said. “Vitalik Buterin is called, what, a benevolent dictator for
life.” He went on, “Talking about decentralization is just nonsense.” There was
some laughter, and some booing. Lubin maintained a forbearing, almost
mischievous smile, and in his customary flat tone disputed the assertions one
at a time. “Vitalik doesn’t really write the code,” he said. There are ten
different teams that all “fight with one another.”

Lubin began conjuring the decentralized future again—state channels,

sidechains, plasma, sharding—and Roubini said, “You’ve been saying these
things for five years. I mean, come on.”

“I can show you the code,” Lubin said. “We’ll go back to the office after.”
A man sitting next to me mumbled, referring to Roubini, “He wouldn’t even
know what code looks like.”

Roubini kept going: “Of all the recent I.C.O.s, eighty-one per cent of them
are scams.” He summarized the usual blockchain pitch as being a variation on
the old solution-in-search-of-a-problem spiel, and said, “It’s totally lunatic!”

The audience began to jeer. “Shut him up!” someone shouted.

Lubin seemed to be enjoying himself. His remarks, and his posture, indicated
confidence that history would prove Roubini woefully incorrect. (Gavin Wood
told me that, whatever his differences with Lubin, he has no doubt that he is a
true believer: “It’s like Joe took some acid or some DMT and saw the light.”)

There was a moderator, and she asked them both, “Where do you think you
could be wrong?”

Lubin maintained the sly smile and said, “I think I may be wrong when I
anticipate that it will all take more time.” Then he added, “It’s difficult being a
human being living in exponential times.”

It was difficult, certainly, being a non-exponential human being during

Blockchain Week. There were the conferences themselves, each a welter of
feverish networking and buoyant gobbledygook, and then all the side
action—a party on a boat on the East River, another above a furniture store in
Bushwick. Consensus 2018, the main event, staged by the news site
CoinDesk, was at the Hilton, in midtown. No Zen Zone here. The organizers
had apparently sold their media list. P.R. inquiries poured into my in-box, a
deluge of cryptobabble.

In a vast ballroom at the Hilton, I saw Lubin bear up under another skeptical
barrage. He shared the stage with Amber Baldet, who had recently left J. P.
Morgan, where she led blockchain initiatives, to launch a decentralized-
application startup called Clovyr, which, with her business partner, Patrick
Nielsen, she’d just announced. Like Lubin, Baldet is a proponent of finding
ways to apply blockchain technology to existing businesses and corporations.
They were joined by Jimmy Song, a Bitcoin developer and true believer, who
was wearing a pink shirt and a cowboy hat and leaning back in his chair with
performative insouciance. Song was asked what he thought of Baldet’s Clovyr
presentation.

“I didn’t see anything other than buzzwords. It’s, like, let’s play buzzword
bingo!” he said. “I feel like I’m at a time-share presentation.”

Baldet smiled and let him continue.

He went on, “How can you decentralize, when you’re a corporation, which is
centralizing?” He kept hammering away. “Blockchains are expensive and
slow”; “You’re utilizing tools that don’t fit the problem. You end up with
crap”; “You’re a hammer-thrower looking for nails”; “Blockchain is not a
panacea. It’s not this magical thing that you sprinkle blockchain dust over it
and it’s O.K.”

Baldet, who has tattoos and lavender hair, has become adept at finessing the
cognitive dissonance between crypto-anarchism and global banking, as well as
that of being a woman in a mostly male line of work. She chalked up Song’s
aggressive stance to the ongoing game of reputation enhancement. You make
a name in the space by staking out turf and fighting for it, onstage and online.
She was also accustomed to men, especially on social media, dismissing her
work out of hand.

Lubin said, “So, five years from now we’re going to see nothing but Bitcoin
1.0?”

“Five years from now, most of the projects in this space will be nothing,” Song
said.
“If we can come up with some crisp criteria, I will bet you any amount of
bitcoin that you’re wrong,” Lubin said.

The room buzzed. They agreed to set the terms on Twitter.

he larger world has tended to see crypto as an asset class and, therefore,
T in terms defined by arrows pointing up or down, as numbers displayed
either in red or in green. The fact that prices have sunk so far, from the great
hype cycle of 2017, leads some to conclude that its relevance is past, its demise
nigh. As a method of payment, it remains flawed, owing to sparse adoption
and price volatility—it’s hard to open your crypto wallet when what you spend
today on a six-pack might be enough next year to buy the brewery.
Conversely, as a store of value, it has proved more fickle than the price of gold
or real estate in Peru. As for its utility as a vehicle for systemic and societal
renewal, it depends on whether society takes it up.

“It took crypto seven years to get to one per cent of the global financial-
services market,” Peter Smith, the Blockchain C.E.O., said. “Maybe at the
end of my career we’ll be at six per cent.”

David Chaum, a computer scientist in California who decades ago laid a lot of
the groundwork for cryptocurrency but then failed to participate in (or
capitalize on) its recent rise, told me, “There’s never been, in the history of
civilization, this much money aggregated as a result of doing nothing.”

One night this month, Lubin, just back from travels to Paris, Hamburg,
Singapore, Dublin, and Bermuda, was sitting up in bed in his Williamsburg
apartment. “There have been and will be booms and corrections,” he said. “I’ve
seen five or six already. Our ecosystem is fifty times larger than it was a year
ago. The price surge attracted attention, investment, and talent. The people
who signed on, they’re hooked: they can’t unsee what they’ve seen.”

At one point, at the Ethereal conference, I wandered away from a panel and
made my way through the derelict factory complex, past promotional booths
and Davos-calibre networking, to an airy brick hall, where Deepak Chopra
was addressing a standing-room-only (and sitting-with-proper-posture-on-
the-floor) audience. “We are all conditioned by the mind, by culture, by
religion, by history, by economics,” he was saying. “This shoe is a human
construct, this hand is a human construct, meaning is a human construct. We
created money. We created blockchain. These are human constructs.”

This seemed inarguable, but perhaps beyond the purview of a crypto

conference. Word around the site was that Buterin had boycotted Ethereal
because of Chopra—that this was one cultic indulgence too many for the
community’s mathematicians and computer scientists. (“It wasn’t a kind of
decision to deliberately boycott it,” Buterin said later. “I already had plans to
be in San Francisco for one quiet week, and sometimes I have to reject stuff.
Obviously, I think Deepak Chopra’s crazy.”)

At a picnic table by a taco truck, I met a couple of crypto traders from

Singapore. They weren’t much interested in changing the world—or in
trackable tuna or in an audience with Deepak Chopra. They were in the game
to make money. They told wallet-scam tales and talked about Ethereum
purely in currency-trading terms. “Conferences are different here,” one said.
“In Asia, they’re for business. Here they’re for marketing.”

As of last week, Lubin and Song hadn’t set the terms of their bet. For the
most part, the big talk was the point. Whoever won, a few years hence, would
receive the additional prize of the other being soon forgotten. ♦

This article appears in the print edition of the October 22, 2018, issue, with the
headline “The Stuff Dreams Are Made Of.”
Nick Paumgarten has been a staff writer at The New Yorker since
2005. Read more »

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