What it takes to be cryptotulip of the year

The CryptoTulip of the Year was first awarded in 2018 for “achievements” in 2017.  In the finest Nakamoto traditions, the criteria for this award have been “transparent”—not!

The winner of the first award in 2017 was Ethereum. It was cited for an array of accomplishments including spectacular technical failures, problematic successes (CyrptoKitties), disfunctional and very non-Nakamotoan governance—yet no noticeable loss of enthusiasm or optimism.

Runners up included Bitcoin (especially, the lack of progress on scaling) and ICOs (unregulated securities!  Both illegal and ridiculously risky!)

What is the Point of the CryptoTulip Award?

Cryptocurrency and related technologies and the communities who use them are complicated and interesting. There are many ideas and experiments being explored, and a lot of sincere interest and hard work.

However, the level of rigor varies a lot, and there is far more rah-rah enthusiasm than critical thinking.  For something that aims to reinvent money and disrupt the world economy, the level of discussion is frustratingly low caliber.

Over the years, cryptocurrencies—like many Internet technologies before them—have been compared to Tulip Mania.   This is a particularly apt analogy in the case of cryptocurrencies, since they are all about markets—unregulated markets—and have been reinventing and recapitulating many aspects of the history of market capitalism (usually naively).

The basic idea of the CryptoTulip award is to recognize technology, products, rhetoric, and practices in contemporary cryptocurrency/blockchain that epitomize an analogy to Tulip Mania.  Why be satisfied with old fashioned, legacy, analog (“fiat”?) Tulips, when we can create a seemingly infinite number and variety of digital CryptoTulips!

So what criteria are the judges (me) looking at when nominating selecting candidate CryptoTulips?

Up to now, these criteria have been shrouded in not so much secrecy, as just “making it up as I go along”.  (Now, that is certainly in the Nakamotoan spirit!)

Basic Tulipology

Here is a sketch of what makes a technical project or product a CryptoTulip

  • Irrational exuberance, a manic belief in the virtue of the technology or product, claims to “disrupt” gigantic facets of the universe, etc. Extra points for claims of immaculate perfections, e.g., “unstoppable” and “untraceable” technology
  • Deep logical and/or philosophical flaws in the rhetoric and/or product (underscoring the irrationality of the claims) g., glib claims about the alleged value of peer-to-peer services
  • Orwellian contradictions in word usage, especially abuse of the Nakamotoan sacred text [1]. E.g., strange twists of terms such as, ”trust / trustless”, “decentralized / centralized”, “consensus”, and “transparency”. (For example, private blockchains run be a central organization behind a firewall, are often described as “decentralized” and “transparent”.)
  • Gross technical flaws, failures, breaches, etc—which have no effect at all on exuberance
  • Social disfunction, possibly including criminal attacks, fraud, breakdown of “governance” and “consensus”, factionalism, politics (gasp!)

A great CryptoTulip candidate has high enthusiasm, even in the face of catastrophic technical failures and financial chaos.  It also probably departs from Nakamotoan orthodoxy, while at least implicitly holding Nakamoto’s coattails.  It might have a combination of deep factionalism and/or unacknowledged central decision making, generally resulting is a paralysis of “governance”.

But the hype never ceases, no matter what.

Not Everything Crypto or Blockchain project is Tulipy

It is important to be clear that the CyptoTulip Award is about irrationally exuberant technophilic mania, not about doing cryptocurrency or blockchain, per se.

There are many crypto projects that may or may not be good ideas, but which are serious attempts to solve real problems. I may criticize these ideas, but they are not cryptotulips.

For example, there are many people working on crypto wallets or exchanges which are perfectly reasonable things.  There are also developments to use blockchains for, say, provenance and supply chains, that are reasonable ideas.  I doubt that much will come of these efforts, but they are valid technical experiments.

There are even unreasonable ideas that are not manias. For example, I have been critical of projects trying to create property registries and identity systems, which are generally unrealistic, unlikely to succeed, and generally don’t need blockchain technology anyway.  But these are not irrational ideas, and there is little mania surrounding such earnest (and mostly non-profit) applications.

Another recent example would be LitCoin

I’m not sure this and similar electricity market application are really needed, or benefit from blockchain technology.  But Litcoin is not Cryptotulip-y at all, because, it is

  1. a real problem/use case,
  2. a real solution in the real world, serving “normal” people,
  3. not about making insane amounts of money, and
  4. cognizant of the limits and drawbacks of blockchain/crypto, and open to alternative technologies

In short: something that is not irrational, and when the exuberance tempered by reality is not tulip-y.  It may or may not be successful or even a good idea, but it’s not tulip mania

The Judging

It is important to note that the judges (i.e., me) are open to surprises, ideas, implementations, or events that no one thought of, or that suddenly reveal yet another weird and irrational aspect of cryptocurrency.  So who knows?

Anyone who really wants to win this award (and I don’t know why you would want to win!) should just keep innovating and disrupting and telling everyone about it.  It’s a tough competition, but with enough irrational enthusiasm anyone can win.

  1. Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System. 2009. http://bitcoin.org/bitcoin.pdf

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