I Don't Know...Why All Crypto News Articles Are Negative
Blocking out the haters
The Guardian website has a page within its Technology section dedicated to cryptocurrency. If you were to rely on this section for all your crypto news, you’d be forgiven for thinking that it is nothing other than a planet-destroying, criminal haven that we should all point and laugh at.
This appears to be a common theme and despite the innovation and excitement, nearly all the articles posted by mainstream media outlets seem to have a negative framing. Given my experience in web3 has been interesting, exciting, and friendly, I was a bit annoyed by the media portrayal that I was reading. I decided to step back and dig into why it might be the case that the media is so reticent to crypto.
To do this, I looked at both halves of the question. Firstly, crypto itself and some of the challenges posed and then, a look at mainstream media more generally.
Crypto and its Criticisms
The main challenges laid at the door of crypto are that it enables fraud, crime and scams and it has a terrible (avoidable) impact on the environment. There is also an undertone in lots of mainstream media of general ridicule and scorn at some of the use-cases. Which of these are fair and what are the answers to the criticisms?
Scams/Crime
According to an article in The Times, the FCA received 6,372 alerts about suspected crypto frauds in 2021, up from 3,134 the year before. The headline reads: CRYPTOCURRENCY SCAMS DOUBLE IN A YEAR.
A similar article in CNBC cites that $14bn was lost to scammers in 2021, up 79% from the prior year. The article is under the headline: CRYPTO SCAMMERS TOOK HOME A RECORD $14bn IN 2021.
These are big numbers, and clearly there are risks and scams that are serious issues within the world of cryptocurrency. Anyone advising or discussing crypto investment with those who are new to the space should warn of the risks and how to stay safe. Security should be front-of-mind for anyone investing.
Crypto is still a relatively new and emerging concept for most of the world. Because of that, and alongside the immature user experience, it is easy to see why bad actors target users and why the scam numbers are so high.
The CNBC article was based on the 2022 “Crypto Crime Report”, by Chainalysis who describe their services as “the worlds most comprehensive cryptocurrency investigation and transaction monitoring solutions”. I read through the report to see how the findings were represented, in comparison to how they were presented by CNBC.
The Exec Summary of the report was headlined in a similar manner to the CNBC article, but with one additional key piece of context:
Crypto Crime Trends for 2022: Illicit Transaction Activity Reaches All-Time High in Value, All-time Low in Share of All Cryptocurrency Activity
Whilst it’s important not to downplay the significance of the $14bn lost in 2021 to illicit activity and to acknowledge that it is the highest number since adoption began, adding the additional detail does change the narrative somewhat. I couldn’t put it any better than it is described in the Chainalysis report:
…those numbers don’t tell the full story. Cryptocurrency usage is growing faster than ever before. Across all cryptocurrencies tracked by Chainalysis, total transaction volume grew to $15.8 trillion in 2021, up 567% from 2020’s totals. Given that roaring adoption, it’s no surprise that more cybercriminals are using cryptocurrency. But the fact that the increase in illicit transaction volume was just 79% — nearly an order of magnitude lower than overall adoption — might be the biggest surprise of all.
To be fair to CNBC, there was mention of some of this nuance, right at the bottom of the page… but not in any of the key points listed atop the article.
Another interesting angle within the Chainalysis report which I’ve not seen appear anywhere in mainstream media coverage is the comparison of fraudulent activity in crypto versus that in the wider economy, or involving ‘fiat’ currency. When focusing on money laundering specifically, the report says:
…cybercriminals have laundered over $33 billion worth of cryptocurrency since 2017… For comparison, the UN Office of Drugs and Crime estimates that between $800 billion and $2 trillion of fiat currency is laundered each year — as much as 5% of global GDP. For comparison, money laundering accounted for just 0.05% of all cryptocurrency transaction volume in 2021.
The purpose here is not to minimise the crime that takes place within crypto, but to highlight that it is relatively low effort to add context that can change the narrative and open up both sides of the discussion.
Environmental Impact
The environmental impact of cryptocurrency is harder to defend against by providing context and comparators. The fact that there might be other industries that produce as much or more carbon emissions vs Bitcoin or other ‘proof-of-work’ blockchains is no defence in a world that should be doing all it can to reduce and remove as many carbon-intensive activities as possible.
Many articles you might see in the mainstream media on crypto’s environmental impact look to compare emissions to countries (more than the Netherlands, Argentina or the UAE by some estimates) or point out situations where the growing demand for energy driven specifically by computing power used to ‘mine’ have led to actions such as ‘reviving a fossil fuel plant’. Even some of cryptocurrency’s most famous proponents - such as Elon Musk - have taken issue, and in 2021 he halted Tesla’s use of the cryptocurrency because, he said, the electric vehicle company is “concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal…”
To provide a couple of definitions on the above, ‘mining’ is the process of users solving mathematical (cryptographic) equations which confirm transactions on the blockchain. This is relevant for ‘proof of work’ (PoW) blockchains, and the carbon emissions come from the amount of computing power used by miners attempting to be the first to solve the puzzles, confirm the transactions and be rewarded for doing so.
However, PoW is not the only type of blockchain, and proof of stake (PoS) blockchains with their more passive approach to transaction confirmation, can replace vast mining centres with individual laptops. These are becoming more prevalent and more environmentally efficient, and in some cases have been labelled the environmental saviour of blockchain.
Whilst it is a very narrow possibility at this stage, there is an argument that suggests blockchain could end up being one of the greatest inventions as it relates to the world’s push to reducing carbon. Very simplistically, there are several industries which could be replaced or enhanced by a blockchain, resulting in institutions and their environmental impacts being negated, and replaced with an underlying technology that would serve the same purpose.
There are parallels here to technologies which may be difficult to understand, but could make a big difference in our fight against climate change (carbon capture, solar geo-engineering). The narratives here are similar, in that they are largely ignored by the mainstream media.
Derision
There are also several articles that can be found on crypto in the mainstream media which are hard to describe as anything other than scornful.
Whether it is laughter at the fact that people really sell cartoon pictures to each other, questions as to whether NFTs can ever constitute as art, or opinion pieces about the cringe-worthiness of ‘crypto bros’, there is far more out there which seems to be designed to arm the sceptics with pithy one-liners than informative articles about the balanced potential or innovation that exists within web3.
For me, that is a shame and it needs a look at the media itself to understand why that is the case.
21st Century Media
Whilst we have looked at some of the challenges with crypto which are there to be scrutinised, the mainstream media itself does have a negativity bias which means that most headlines seem to be based on bad news. This is much broader than technology or cryptocurrency.
Negativity Bias
Negativity bias is psychologists' term for our collective appetite to hear and remember bad news. The theory suggests that we've evolved to react to potential threats and therefore bad news could be a signal that we need to change what we're doing to avoid danger.
Media outlets have several goals (depending on who you ask) but clearly one of them in the modern world - with competition for attention ever growing - is to maximise their profits by attracting as many consumers as possible. If we have an appetite for bad news, it’s in the outlet’s interest to maximise the negatives, in order to maximise the attention generated. To be more sympathetic to mainstream media outlets, they may also argue that they have a duty to warn individuals of the risks and doing so with striking, negative headlines is a way of ensuring people heed the warnings.
Cynically, I suggest there is also an element of schadenfreude when it comes to bad news as it relates to cryptocurrencies. I am sure lots of us know people who talk at length about their gains in crypto or NFTs over the last few years and reading bad news on it arms some with soundbites or comebacks when the conversation eventually turns back to crypto.
Confirmation Bias
Linked to that, confirmation bias is likely also at play. There is a narrative that has emerged that is based on the criticisms of crypto (that it enables scams and is environmentally damaging) and articles that confirm this are going to be more popular with those who hold that belief. Mainstream media reports and news that talks up the benefits and potential of crypto, aren’t likely to be as popular with those individuals, even if they include facts and data.
Under confirmation bias, the mind doesn’t necessarily follow facts, however credible and convincing they might be. In fact, we tend to undervalue evidence that contradicts our beliefs and overvalue evidence that confirms them, filtering out inconvenient truths and arguments on the opposing side. In relation to crypto articles, this provides a self-perpetuating feedback loop of sorts.
Typically there is also a belief that criticising or challenging make us sound smarter, where as excitement or positivity can make us seem naive or immature. If individuals want to sound knowledgeable without putting in the hours to understand deeply, it is going to be negative soundbites and headlines that help them do that.
Nuance
Most of my defences or counter points when looking into the criticisms of crypto involved the introduction of nuance. It has become increasingly rare that nuance appears anywhere in the mainstream media. With the rise of social media, articles need to be appropriate for summarising into headlines, or 280-character long opinions, often with click-bait titles, as outlets compete for our attention. In this environment, it is impossible to introduce the nuance that is required to openly review both sides of a debate.
There is perhaps an argument that this is lazy, both on the part of the writer and the reader. However, most people aren’t going to be spending their time looking into pros and cons on something that is still largely peripheral to everyday life. In the case of a casual observer, why wouldn’t they be happy to take in some soundbites about crypto and be fed their opinions in this way?
This brings us to the final point, on general derision, to which I do understand both angles. One is that it is wholly justified, and the use cases of crypto (particularly NFTs) bring on derision. It’s hard not to look at some of the numbers and stories behind what appears to be based on nothing other than cartoon jpegs and laugh with disbelief and wonder what-on-earth these people must be thinking.
On the other hand, perhaps it is just easier to poke fun at things when you don’t understand them. When we understand something, we feel as though we can control it, when we don’t, we consider it a threat. In exploring this idea a little, I came across perhaps the perfect quote to close this article with, from author Sarah Gerdes:
“We mock what we don’t understand, then we experience it”