raw me your map of utopia and I’ll tell you your tragic flaw. In 10 years of political reporting I’ve met a lot of intense, oddly dressed people with very specific ideas about what the perfect world would look like, some of them in elected office—but none quite so strange as the ideological soup of starry-eyed techno-utopians and sketchy-ass crypto-grifters on the 2018 CoinsBank Blockchain Cruise.
It happened like this.
Two months ago, an editor from BREAKER called and asked if I wanted to go on a four-day Mediterranean cruise with hundreds of crypto-crazed investors and evangelists. We’ll cover the travel, he said. Write something long about whatever you find, he said. It was 2 a.m. and I was over-caffeinated. I remember explaining that I know almost nothing about either cruises or blockchain, in the way that Sir Ian McKellen, in the criminally underrated series Extras, explains that he is not actually a wizard. Five days later I was at the port of Barcelona, boarding a ship. By which point it was way too late to wonder for the umpteenth time about my life choices.
I knew about bitcoin only as an investment vehicle favored by several essentially sweet nerds close to my heart—and I knew, too, that cryptocurrencies are the pet untraceable funding model of the far-right. I was told there would be an overall “Burning Man theme” to the adventure, guaranteed by the presence of Brock Pierce, the cryptocurrency mogul, former child actor, and one-man art installation about peer pressure. (More about him later.)
Ethereum is already the most famous cryptocurrency after Bitcoin and the third largest in total value. Unlike the others, however, it aims to serve as a general-purpose computing platform that could, its adherents believe, make possible entirely new forms of social organization. The central topic of Devcon is “Ethereum 2.0,” a radical upgrade that would finally allow the network to realize its true power.
The nagging truth, though, is that all the positivity in Prague masks daunting questions about Ethereum’s future. The handful of idealistic researchers, developers, and administrators in charge of maintaining its software are under increasing pressure to overcome technical limitations that stymie the network’s growth. At the same time, well-funded competitors have emerged, claiming that their blockchains perform better. Crackdowns by regulators, and a growing understanding of how far most blockchain applications are from ready for prime time, have scared many cryptocurrency investors away: Ethereum’s market value in dollars has fallen more than 90% since its peak last January.
The reason Devcon feels so upbeat despite these storm clouds is that the people building Ethereum have something bigger in mind—something world-changing, in fact. Yet to achieve its goal, this ragtag community needs to crack a problem as complicated as any of the toe-curling technical challenges it faces: how to govern itself. It must find a way to organize a scattered global network of contributors and stakeholders without sacrificing “decentralization”—the principle, which any cryptocurrency community strives for, that no one entity or group should be in control.
About a year ago, Charles and Claudia Wildes maxed out their credit cards and invested more than $40,000 in a hot new digital currency, just as the crypto mania peaked.
Now, all that money is gone—a small part of the billions investors lost as cryptocurrencies plunged in recent months.
But the Wildes’s losses aren’t just because of bad timing: The digital coin they bought, called BitConnect, was one of many alleged frauds pervading the market. The Securities and Exchange Commission is investigating BitConnect, people close to the probe said, but the regulator may never get the Wildes’s money back.
BitConnect couldn’t be reached for comment.
The SEC and state regulators have brought more than 90 crypto cases over the past two years, as bitcoin and other cryptocurrencies swung from highs to recent lows. So far, the regulators have only managed to claw back about $36 million for duped investors, according to an analysis by The Wall Street Journal.