Matt Levine Crypto Story: What Does This 40,000-Word Article on Crypto Say?

Bloomberg Businessweek published a 40,000-word article on crypto called The Crypto Story wrote by Matt Levine, the news outlet’s popular financial columnist, who – amid one of the worst downturns in the industry’s 14-year history – offered praise of the good parts, critiques of the bad and dangled hope that this new way of transferring money and information around has staying power.

Levine is well-known as a chronicler of all things finance, which in recent years has meant a lot of writing about cryptocurrencies. As a sign of just how importantly Bloomberg viewed the former investment banker and lawyer’s piece, the news outlet made it the only article in this week’s issue of the magazine, just the second time the 93-year-old publication has padded itself with a single story. (The previous one, in 2015, was about computer programming.)

It acknowledges some of the ridiculous aspects of crypto culture. “Many people who got into crypto early got very rich very fast and were very annoying about it. They bought Lamborghinis and islands,” Levine wrote. And the article notes this might appear to be a strange time for such an opus, with crypto prices down substantially from their peak less than a year ago. The CoinDesk Bitcoin Price Index (XBX), for instance, is languishing at around $20,000 after nearing $70,000 in November.

“But really it’s a good time to be talking about crypto,” he wrote. “There’s a pause; there’s some repose. Whatever is left in crypto is not just speculation and get-rich-quick schemes. We can think about what crypto means – divorced, a little bit, from the lines going up.”

One of Levine’s big topics over the years has been the basic plumbing of finance – call it market structure or the business of trading. And there’s plenty of that to discuss in crypto.

“My goal is to convince you that crypto is interesting, that it has found some new things to say about some old problems, and that even when those things are wrong, they’re wrong in illuminating ways,” he said. “Crypto has a pretty well-developed financial system, and I’m going to talk about it a fair bit, because it’s pretty well-developed and because I like finance.”

Much of the article explains core crypto topics and terms (usual suspects like proof-of-stake, ERC-20, etc.) in a plain English, explanatory way. It describes how offbeat aspects of crypto have bled into other areas of markets. In a section where Levine discusses the meme-stock craze that crested early last year, he said: “One important possibility is that the first generalization of Bitcoin, that an arbitrary tradeable electronic token can become valuable just because people want it to, permanently broke everyone’s brains about all of finance.”

Levine also talks about how crypto has merged some conventional markets and economics concepts in unique ways. For instance: “Crypto built an efficient system to make the customers of a business also its shareholders.”

An overarching theme is that modern life is driven by databases. The blockchain, which underpins cryptocurrencies, is also one of them – which means there could be a future for cryptocurrencies.

“If you build a financial system whose main appeal is its database, it will be well-suited to a world lived in databases,” he wrote in the final paragraph of the  article. “If the world is increasingly software and advertising and online social networking and, good Lord, the metaverse, then the crypto financial system doesn’t have to build all the way back down to the real world to be valuable. The world can come to crypto.”

Read the full article of The Crypto Story by By Matt Levine.

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