Why Crypto Has a Conflict of Interest Problem, and How to Fix It

in cryptocurrency •  28 days ago

This is probably illegal. In any standard equities market, this would be an SEC violation, at the very least. It's also a conflict of interest since Peter is a major player in BTC.

Next time Peter calls someone a "scammer," remind him of this. #bitcoin #blockstream pic.twitter.com/4fykDBIpru

— Kurt Wuckert Jr (@kurtwuckertjr) March 20, 2019

The idea of "free" and "no one owns it" aren't how the real world works

As the mythology goes, Bitcoin was created by no one important with no ulterior motives and no lasting direct control over the project, and to this day cryptocurrencies are supposed to conform to this "pure" ideal of being devoid of ownership and profit, simply existing for the benevolent use by mankind. Reality, however, is a little bit different. Everything costs money, whether it comes in the form of literal financial resources or in expert labor, and things with no owner quickly find themselves under the de facto control of someone anyway. Ultimately, even a well-distributed idea based on publicly-available open-source code develops associated social media accounts and forums, major code repositories, respected websites, and other major points of access that can easily be taken over by lone groups or individuals. Someone also has to work to maintain all of the above and to continue to develop on the project, much of which requires salary, donations, or unsustainable volunteer efforts.

Similarly, the idea of simply being a pure, unbiased fan has a mythical quality as well. Any number of compromising factors can come into play, from having personal relationships with those involved in a certain project and other social pressures to having significant investments, to even having a soft spot for the "look and feel" of a coin's branding or popular messaging. And naturally, few will remain fans long before investing, adding the financial interest that may not have been there originally. Simply the "first information bias," where the first opinion formed becomes difficult to shake in the presence of new information, applies here as well.

How my tweets performed before having my account restricted by @jack, compared with today. I had 300k fewer followers at that time, too.

Any journalists want to write about how @jack is restricting accounts that are critical of one of his portfolio companies? pic.twitter.com/B7m201OBBt

— Bitcoin (@Bitcoin) March 24, 2019

Pretending vested interest doesn't exist has led to all sorts of destructive and deceptive practices

Regrettably, not coming clean to these basic realities has led to them manifesting in underhanded ways. Bitcoin development infamously received funding from Blockstream, which influenced the long-term vision to square more tightly with its business model, with coordinated and similarly infamous social media censorship and manipulation. Twitter engaging in behavior in line with the investment interests of its CEO also has recently become apparent. Ripple rebranded its currency (for which it is the sole known creator) to XRP and may have engaged a bot army on social media to both pump the coin and simulate a community-driven project rather than a corporate coin. Digital Currency Group has its influence in a wide variety of projects including one of the more popular exchanges/onramps and one of the largest news outlets in the space, leading to some dicey coverage of projects outside of their purview. The list goes on and on.

None of this should be surprising. What does leave many unsuspecting users and investors blindsided, however, is pretending that cryptocurrency is above this sort of thing.

Direct, shameless disclosure of interest and holdings is the only reasonable approach

Bluntly put, the only way to combat the underhanded approaches and narratives in the space is to dispel the myth of the benevolent unbiased volunteer. Be clear about who owns what, and has a keen interest in seeing what succeed or fail. Be transparent about holdings and employment. And, most importantly, fight the shaming of those who are upfront about their influences. If someone is trying to discredit someone for having a publicly-stated vested interest in a project, that person is probably the one who has something to hide.

There is no shame or stigma in having an alignment of ideas and incentives, and being upfront about them. Here's my version: I have been philosophically aligned with sound and decentralized money as long as I can remember. I started living partially off of Bitcoin in 2013, completely in 2015, and closed my bank account and got rid of all my non-crypto money. When it was a hardship to continue to do so I switched to using Dash, not because I was a fanboy but because I had no other options other than to return to fiat at the time. I quickly became a fan of Dash and a few months later started to work for the Dash DAO, which I still do to this day. I don't hold meaningful amounts of anything else and have no stake in crypto companies or other projects. When I speak, now you know my perspective with nothing to hide. Let's get the rest of the space to be a little more honest.

Posted from Dash News : https://dashnews.org/why-crypto-has-a-conflict-of-interest-problem-and-how-to-fix-it/

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