Tag Archives: crypto

Age vs Crypto

1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.
2. Anything that’s invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.
3. Anything invented after you’re thirty-five is against the natural order of things.”

Douglas Adams, The Salmon of Doubt

It’s commonly known that younger generations tend to be more enthusiastic adopters of new technology. It’s easy to see why – younger people are more hungry to learn, are still forming habits, and have more to gain (and less to lose) from technological revolution.

So it’s worth casting my own resistance to crypto through this lens. I have always been an enthusiastic adopter of the internet and technology, and that attitude has served me very well; I owe my livelihood to it. It would be easy for me to jump on the Web3 bandwagon and go all-in on crypto.

Or would it?

I’m heading rapidly towards middle age, and certainly not as flexible as I used to be. Is my anti-crypto sentiment simply a natural resistance to change? Had I been this age when the internet was invented, would I have been such an enthusiastic adopter?

Do Your Own Research

The first data point I found on crypto adoption by age was from Pew Research Center. According to their research, 31% of people aged 18-29 in the US have invested/traded in or used a cryptocurrency, compared to 21% of my demographic – 30-49. So it would appear from this that millennials are less-likely to invest than gen-Z:

But it’s worth noting that had I taken this survey, I’d be considered an adopter, despite my opposition, as I have used cryptocurrencies in the past. This survey is really testing awareness, not sentiment.

Finding a better one

Finder.com have done a much more detailed survey, with more responses: Key UK crypto adoption trends for January 2022. On sentiment in the UK:

The survey found the United Kingdom ranks 23rd out of 23 countries in regard to positivity around cryptocurrency, with 17% of respondents saying they think cryptocurrency is a good investment. This is lower than the global average of 43%

Crypto sentiment in the United Kingdom [Finder.com]

What I also found interesting, is that increased positivity correlates highly with the corruption perceptions index. This makes intuitive sense – if you think the financial system in your country is corrupt, you’re more likely to view alternative systems favourably.

But why the particularly strong negative sentiment in the UK? Could that explain my own negative attitude? More research would be needed to know for certain, but I’d hypothesise that it’s a combination of relatively high transparency and a strong financial services sector. The UK is leading the world in fintech in many ways, and alternative money systems are simply less attractive in this environment, because the existing system functions well enough. Higher corruption is not a price worth paying, particularly when it functions worse.

Unfortunately, the Finder research doesn’t break down sentiment by age, but it does break down ownership by age (the chart is tall, so I’ve cut off the bottom – but black is 18-34, dark blue is 35-54, and light blue is 55+):

Source: https://www.finder.com/uk/finder-cryptocurrency-adoption-index

Compared to other countries, the UK and US have a fairly even spread, and from this breakdown it would appear that Gen-Z in the UK and US are even less likely than millennials to own crypto, although 35 is a somewhat awkward boundary as it lumps older millennials (“xennials”) such as myself with Gen-X.


So what have I found?

I went off on a bit of a tangent here, spending as much time on country statistics as age, simply because I found better data on it. But nonetheless, I’m comfortable that my age is not a significant factor in my attitude to crypto – in fact my own cohort in the Finder research is the highest adopter. The UK is an advanced financial market though, with strong consumer protections, and the country statistics have shown that it’s worth tempering my attitudes by considering the state of financial services in other countries.

But even in the worst circumstances, is a hyper-capitalist, easily-manipulated, coal-burning currency any better? In less-transparent countries, you could argue that you’re spreading the corruption risk globally, thus diluting any corruption (and inflation) in your own country. But that’s simply swapping local corruption for global coin-holder corruption, and you could very reasonably argue that this would drain more wealth from these countries than local investments. Even if it did prove better, a less-bad solution still isn’t good, and it’s an even harder case to make in high-transparency western nations.

At the end of the day though, I am no expert on corruption, or the economies of low-transparency nations. I can only argue the effects that I observe in my own market, and the technical details that I can understand.

Crypto-currencies are still bullshit.

Essential Reading on Crypto

Since penning a post on the libertarian ideology of Bitcoin, and the inherent unfairness of a deflationary currency (Bitcoin is the thin end of a far-right libertarian wedge), I’ve come across more articles on the subject that articulate the problems with crypto-currencies far better than I every could.

First up, the Folding Ideas video Line Goes Up – The Problem With NFTs, is a must-watch for anyone remotely interested in the space, or considering an investment in any form of crypto. Despite the headline being NFTs (you thought crypto-currency was bad? wait till you see this dumpster fire), it goes fairly deep into crypto-currencies and blockchains in general. At 2 hours and 18 minutes, it’s a very long video by YouTube standards, but the presentation is excellent, the research solid, and it never drags. Since it was posted 5 days ago, it has racked up 2 million views, so it’s certainly having an impact.

If two hours is too long though, I strongly recommend reading The Case Against Crypto, by software developer Stephen Diel. He nicely summarises the anti-crypto argument under 4 headings:

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Bitcoin is the thin end of a far-right libertarian wedge

There’s a fair bit of noise about crypto these days. About a year ago, advertising from crypto exchanges and various sh*t-coins really ramped up, and it really hasn’t ceased. Fortunately, the cringe-worthy tie-up between Matt Damon and crypto.com has been received about as well as anyone outside the crypto bubble would expect, but I’ve been doing a lot of thinking about crypto recently as a result. And I’ve been thinking more about about Bitcoin, as, regardless of what you think of crypto in general, Bitcoin is not a shi*t-coin, and is regularly held up as an alternative to the global financial system.

Yet, the markets are currently in free-fall, and one of the main reasons to hold Bitcoin (as a hedge against inflation) hasn’t really panned out – inflation is up, and Bitcoin is down more than the S&P 500. This is not a counterpoint to Bitcoin as a reserve currency though, as the free-fall of Bitcoin is based on its value in fiat. But the fact that we’re still pricing BTC in fiat, more than 10 years since its inception, demonstrates to me that it has failed in this mission.

I think there are many problems with cryptocurrencies and blockchains, but in this essay I’m only going to talk about one aspect of Bitcoin as a currency – the hard limit on supply. I should also add that I am not an expert, just an interested observer. In the early days I thought Bitcoin was an interesting idea, and I have held a little crypto over the years. While I never lost money, I didn’t make a fortune, and these days I am consciously a “no-coiner” – someone that holds no cryptocurrency, and believes they have no value. Or more specifically in my case, that they are a bad solution looking for a problem.

Deflationary by design

One of the arguments in favour of Bitcoin that I keep reading about, is that supply is inherently limited, making it a deflationary currency. This would mean that, hypothetically speaking, if adoption of Bitcoin was universal and stable, the price of goods in Bitcoin would steadily fall over time. This is a gross over-simplification, but the supply of Bitcoin has a hard limit, and thus we can never alleviate upwards pressure on its value by increasing the supply (I.E. debase it), without forking the chain. And of course, as a network participant, you wouldn’t support that if, like most Bitcoiners, you were against debasement in the first place.

Fiat currencies aren’t like this, because they have central banks issuing them, and these banks debase their currencies as a fiscal tool. The effect of this deliberate inflation is that the real value of the cash that people hold (and also their wages) goes down over time.

If the argument is that Bitcoin’s deflationary nature is a good thing, a corollary to this, is that a currency that can be debased is a bad thing.

With me so far? Good. Let’s take a look at that argument.

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