Over the weekend, I tried my first Twitch stream. I played Teamfight Tactics and answered questions posed in the chatbox. One question stuck with me after the stream: “what frustrates you most about the crypto ecosystem?”
My answer at the time was the competing incentives for marketing and pumping versus building something useful. What drives coin prices doesn’t necessarily drive usefulness. It’s tempting to prioritize efforts that can directly impact price–building useful things is difficult and might take a long time–so we often see a lot of marketing and pumping and relatively little building.
This imbalance between pumping and building has always bothered me. I used to describe it as “intellectual dishonesty,” and my small way of combating it was to debunk popular and farcical claims through blog posts.
But I’ve found a more useful term well-studied by academics and philosophers: “bullshit.”
Bullshit is a greater enemy of truth than lies
Harry Frankfurt’s 1986 essay “On Bullshit” seems to be the best place to start on the subject. He argues that bullshit is (1) not lying and (2) more harmful to the truth than lying.
He cites an amusing anecdote that demonstrates Wittgenstein’s devotion to combating “non-sense.” Fania Pascal recalls:
I had my tonsils out and was in the Evelyn Nursing Home feeling sorry for myself. Wittgenstein called. I croaked: “I feel just like a dog that has been run over.” He was disgusted: “You don’t know what a dog that has been run over feels like.”
Wittgenstein isn’t upset with Pascal for lying–she does not speak to deceive, or say something that is the opposite of truth–but for saying something unconnected from truth. That something unconnected is “bullshit.”
A lie is the opposite of the truth. So a liar must know the truth. The motivation of a liar is to “insert a particular falsehood at a specific point in a set or system of beliefs, in order to avoid the consequences of having that point occupied by the truth.”
Bullshit is unconnected from the truth. A bullshitter need not know the truth. “The bullshitter may not deceive us, or even intend to do so, either about the facts or about what he takes the facts to be. What he does necessarily attempt to deceive us about is his enterprise. His only indispensably distinctive characteristic is that in a certain way he misrepresents what he is up to.”
Whereas the liar deceives us about facts, the bullshitter deceives us about intentions.
Reducing the return on bullshit in crypto
So what frustrates me most about the crypto ecosystem is the prevalence of bullshit. Bullshit is everywhere (and seems to be growing at an alarming rate) but is seems particularly insidious in crypto. This is driven by the following:
Direct incentive to do things that make coin prices go up (bullshit is created)
Lack of valuation models for coins reduces coin pricing to a Keynesian Beauty Contest (bullshit is consumed and even if one deems it bullshit, they may accept it if they think others will not realize it’s bullshit)
Low risk for bullshitters (lying is fraud but bullshit is just bullshit, relatively low legal or social risk to bullshitting)
The most common word I’ve seen used to describe this cycle of bullshit is “scam.” Project XYZ is a scam. This person is scammy. But almost all of the time, they’re not scams.
Scams are closer to lies. They are falsities designed to swindle.
What we see is bullshit. Wild claims disconnected from the truth. Dishonest framing of problems and solutions. Empty promises that aren’t quite lies but are unlikely to be fulfilled or wouldn’t matter if they were.
How do we fight this?
First, we need to individually improve at detecting our own bullshit. When Socrates says “know thyself” this is what he means. Wisdom is aligning your attention with the truth. Bullshit is when your attention gets caught up in things and ideas that are non-true.
For more on this, I recommend John Vervaeke’s excellent video series “Awakening From The Meaning Crisis”. It’s the Intro Philosophy class I wish I’d had in college.
The most common contributors of self-bullshit in crypto are “status quo bias” and “confirmation bias.” The former distorts reality to prefer what coins you currently hold and the latter distorts reality to confirm preexisting beliefs.
Second, we need stronger punishments for bullshitters. I believe Messari was founded in the spirit of this: self regulation for the industry. And we can do more. While it may seem like yelling into the wind, calling out bullshit when you see it on twitter or writing blogs debunking bullshit helps others identify and avoid bullshit.
And perhaps the most direct way to address this is to reduce the benefits to bullshit. I think this may look like more short markets for assets propped up by bullshit. As information in the industry continues to improve, the education of the average market participant will rise, hopefully leading to diminished returns on bullshit.