You’ve heard of Sam Bankman-Fried, right? You know, the 30-year-old (former) crypto-billionaire who is now disgraced and facing serious charges of fraud, but just months ago was hanging out with major ruling class politicians and being hailed by the media as a “genius.”
Well that’s just the tip of the cryptocurrency crime story.
There’s the fact that millions of people, disproportionately Black people, as well as other oppressed people who routinely get discriminated against by the banking industry, were sucked into get-rich-quick schemes, pushed by major ruling class figures and celebrities, from Matt Damon to Snoop Dogg, and ended up with their money evaporated.
There’s the libertarian philosophy of “democratizing” the (capitalist) economy and getting away from centralized financial institutions, thinking you’re going against “the system”… while in reality supporting one of the most parasitic expressions of the system, and ending up with the rich getting richer, the middle class and poor getting fucked, and the rise of major financial institutions—just more unregulated, unstable, and corrupt ones.
There’s the energy-intensive bitcoin “mining” that is flooding massive amounts of planet-killing greenhouse gases into the atmosphere.
Check, check, and check.
All that is on the surface. On the “next level down” of things, there may be more than meets the eye. For one thing, Bankman-Fried gave significant financial support to the Democrats, especially in the past election, and there’s ways that conflicts among different sections of the rulers can get fought out in affairs like this. This bears watching.
But none of that compares to the biggest crime of all: what's underneath all these transactions. Think about the blood, sweat, and tears of the children in the Congo mining the cobalt that goes in your cell phone, the garment workers in Bangladeshi sweatshops locked in their factories and burned alive, the people literally enslaved on Thai fishing boats serving American consumers, the women at the iPhone plant in China who are worked to the point of jumping out of factory windows to their deaths. This is the actual foundation of the capitalist-imperialist economy. This is where the “currency” comes from (and ultimately rests on) that gets invested, traded, and speculated on in “crypto-world.” This is the system that needs to be overthrown.
What is cryptocurrency?
Cryptocurrencies are digital tokens which allow people to make payments to each other through an online system. But unlike other currencies (U.S. dollars for example), they don’t exist in any physical form, and there’s no central bank that issues or regulates it. It is called “crypto” because it uses encryption to verify transactions. Cryptocurrency is stored in digital “wallets,” and transactions are recorded in a public ledger through a technology called “blockchain.” Units of cryptocurrency are created through a process called “mining,” which involves using massive amounts of computer power to solve complex mathematical problems in order to generate coins. You can also buy cryptocurrency from brokers and “exchanges,” like Sam Bankman-Fried’s now bankrupt FTX.
The first cryptocurrency was Bitcoin, which began in 2009. Since then, other kinds of crypto “coins” have proliferated. The craze around crypto has largely been driven by people hoping to buy low and sell high, gambling that there will be more and more demand, and the price of their crypto tokens will keep going up. Over the years this kind of speculative bubble has repeatedly resulted in peaks and crashes, with the current collapse being the most severe.