There were a couple of entertaining articles last month about people tragically losing access to Bitcoin wallets containing tens of millions of dollars by forgetting their private keys. In one anxiety-inducing instance, a programmer had two tries left to guess the password to a hard drive holding the private keys for $220M worth of Bitcoin. Considering the immateriality of these stories’ subject matter, their imagery was surprisingly concrete and vivid: hard drives in vacuum-sealed bags, reformatted laptops, metal plates buried in backyards, and a guy rummaging through a landfill in search of a discarded hard drive containing £50M worth of cryptocurrency. To paraphrase Tolstoy: Happy Bitcoins are all alike; every lost Bitcoin is lost in its own way. The currency’s chaotic failure modes, and the janky methods by which people stored their passwords, are a powerful illustration of the boundary that separates the platonic digital universe where Bitcoin lives—an internally consistent reality where everything works the way it’s supposed to—and the chaotic, flawed human domain where we can’t have nice things, where we depend on computers but consistently find ways to undermine their gifts. One of the articles cited an estimate that 20 percent of existing Bitcoin, or $140B worth, is currently stranded in inaccessible wallets or otherwise lost. That Bitcoin is all still there, of course—immutable and patiently existing, as it’s designed to—but its irresponsible stewards failed, losing the privilege of accessing it, and now the Bitcoin lives on without them in its own separate dimension to which the portal of entry has closed.
Cryptocurrency represents a remarkable triumph of abstraction, but as a human invention that ultimately exists to serve human needs—like any digital entity—it has to manifest itself in forms that enable us to manipulate it with our grubby hands. This is what interfaces do: They make an illegible system legible while channeling and focusing our interactions with that system, forcing us to operate in a controlled context where it’s difficult or impossible to do real damage. Interfaces are sensory organs and without the interface—when you lose the private key to your Bitcoin wallet, for example—the mediated environment itself becomes imperceptible once again. The quintessential contemporary interface, arguably, is that of Apple’s devices, which provide elegant, well-defined points of entry to a vast proprietary digital ecosystem. In The Stack, Benjamin Bratton writes, “Apple is positioned as a preferred physical ‘last millimeter’ of delivery…the exact physical point where User and Cloud touch.” Because the iPhone unifies so many formerly disparate functions within a single handheld object, it has facilitated a minimalism in its users’ lives that mirrors the appearance of the device itself. A couple of years ago I wrote, “Keys, wires, scraps of paper, tickets, disks, and CDs have all been absorbed into small aluminum and glass objects.” That is, Apple eliminated all the clutter that seemed to reappear once again in those lost Bitcoin stories—a metaphor for the subtle joys of heavy-handed centralization.
Decentralization, of course, is the grand objective of Bitcoin and other cryptocurrencies. Information and the value that corresponds to it resides on the blockchain instead of within a centralized repository like a bank or an Apple data center. But the sob stories of unrecoverable crypto fortunes and desperate efforts to guess forgotten passwords or dig hard drives out of trash heaps imply an important corollary: Decentralization at one scale produces a new kind of centralization at another, and Bitcoin places individuals at the center, whether they’re ready for that role or not. Discussing the lost Bitcoin passwords, Matt Levine writes, “That is an entirely solved problem in 21st-century finance. You will have a custodian who holds the stock for you, but it’s not like the custodian is keeping stock certificates in a vault that might burn down…there are a lot of backups and redundancies, and in practice stock does not just go missing…A hedge fund that is used to that system may be unprepared for the Bitcoin system of, like, write down your password and don’t lose it.” But that image and the contrasting minimalism that Apple embodies suggest that centralization might just have better branding, which covers up its glaring faults. With better interfaces, the alternative could be just as appealing. We’d at least lose less Bitcoin.
This newsletter is supported by paid subscriptions, so consider signing up to get the full experience. This week’s was about Clubhouse and why it doesn’t compete directly with in-person interactions or threaten to replace cities, as some have argued.
Another great installment of Dean Kissick’s column. “We don’t have flying cars. We have electric cars, and the world’s richest man is an electric carmaker who’s placing telepathic devices in monkeys’ minds; he is, in the fantasy parlance, a warg. It’s not what we expected, but is in many ways more interesting, more mystical and pagan. I’d much rather have psychic connections with animals, than hoverboards or flying cars.”
Why Muncher from the upcoming Ghostbusters movie embodies the present zeitgeist, in contrast to Slimer’s epitomization of the ‘80s: “Muncher’s specific appetites are more than just the characteristics of a made-up ghost; they reflect a profound crisis of American meaning.”