In April 2020 Vin Armani packed up his family “and got on the last flight to an obscure island in the middle of the Pacific”.
The cryptocurrency influencer suggested to his 14,000 Twitter followers, many times, that the pandemic is being used to impose “totalitarian tyranny” on America. As the CTO of CoinText, he was worried that his outspoken views and links to the crypto industry meant he could be “disappeared” by the “Gestapo”. He now lives in Saipan, population 50,000.
“This isn’t the end of what’s happening,” he says, citing the historical precedent of the Jewish people fleeing Germany before World War II. “Our ability to travel is going to be greatly restricted and you’re going to be trapped. And it’s going to be at the points of transit … where the undesirables get mopped up. The people who are on the list.”
Totalitarianism always starts out of an emergency.
While many in the crypto community share his fears about the erosion of civil liberties during the pandemic, Armani has gone further than most. Six thousands miles further.
He doesn’t see himself as a conspiracy theorist – just someone questioning society’s assumptions about money and power. Armani says the Bitcoin White Paper is often the catalyst that “wakes” people up and sets them on a journey of discovery.
“I hate conspiracy theories,” he says. “Because you don’t need a conspiracy, all you need is a perverse incentive. The world just works in a certain way. People act in their own self-interest. Lord Acton (said): ‘Power tends to corrupt, and absolute power corrupts absolutely’. I think that what you see in the crypto community is people who have read economic texts… you see people who recognize what the government is, what the state is and who the people are in pursuit of state power.”
Armani appears to have embraced what some call ‘the paranoid style’ in American politics. He is a big fan of notorious English conspiracy theorist David Icke and interviewed him twice on his YouTube show. He credits Icke with “waking me up when I first came across his work 15 years ago… David has been absolutely spot on for 30 years.”
Icke on the mic
Icke believes the world is run by a bunch of shape-shifting blood-drinking reptilian aliens from Alpha Draconis, one of whom is masquerading as the Queen.
Armani says Icke’s views have “evolved” — though Icke was recently booted off Facebook and YouTube for spreading 5G coronavirus conspiracy theories.
Another Bitcoiner interested in …. ‘unorthodox hypotheses’ is Caleb Chen, who works in content marketing for a popular VPN provider. Although he’s “undecided” about most conspiracy theories, he still spends part of each day trawling through conspiracy forums on Reddit looking for “alternative explanations” for what’s really going on in the world.
He says the crypto community was where he first encountered conspiracy theorists in the wild. “The first Bitcoin meetup I went to was in 2013. And yeah, it’s right around there when I started running into these people,” he says.
“I’d never met someone who didn’t believe that the moon landing happened, or that believed in the flat earth conspiracy, until I started going to Bitcoin conferences and Bitcoin meetups.”
5G or not 5G?
Kirby Ferguson, the writer/director of documentary This Is Not A Conspiracy Theory says there’s a definite strand of conspiratorial thinking within the crypto community, although price speculation and gossip are the major preoccupations.
“There certainly is that subculture of conspiracy theory in there,” he says. “I feel like it’s a combination of anti-establishment spirit, that spirit of dissent that is in cryptocurrency, and the dubious media sources that are mixed in there.”
The subculture is big enough to be noticeable.
Almost half a million people have watched Crypto Chico’s YouTube video in which he explains a complicated crypto meets COVID-19 conspiracy theory titled “Global Pandemic Planned“.
When Bitcoin Ben isn’t pumping the BTC price on YouTube and Twitter, he likes to post about QAnon — which The Washington Post described as the idea “there is a worldwide cabal of Satan-worshiping pedophiles who rule the world”.
And that 5G stuff that one in eight people apparently now believe? You know, how the pandemic was faked to cover up the health impacts of 5G so that Bill Gates can microchip everyone with his vaccine? That whole story was dreamed up by a crypto-loving pastor from the small town of Luton in the UK; a guy who has advised African central banks on digital currencies.
Crypto publication Trustnodes has run with the theme, devoting large amounts of space in recent months to stories with headlines like “America on the Verge of a Dictatorship” that suggest lockdowns are about “keeping humanity down, chained and enslaved.”
One editorial said: “No wonder people flock to the likes of Alex Jones …”
One possible reason the cryptocurrency space is so conducive to conspiracy theories is that there really are bad actors doing shady stuff in the space. There are whales out there manipulating the markets, which is why the SEC keeps knocking back Bitcoin ETFs.
The theory that Tether isn’t actually backed 1:1 with US dollars has been shown in court to be correct. Many ICOs were elaborate fictions, constructed to fleece gullible investors of their cash. And there is so much doubt over the circumstances surrounding the death of Quadriga’s CEO — which left the exchange ‘unable’ to access $145 million in crypto — that there have been legal moves to exhume the body of Gerald Cotten. (Or ‘Gerald Cotten’, if you prefer.)
“Every conspiracy theory, there’s always some sort of truth behind it, some sort of fact hidden in it which makes it easier to believe,” says filmmaker Torsten Hoffman, who covers the conspiracy theory swirling around Bitcoin development company Blockstream (replete with cartoon Lizard People) in his new documentary Cryptopia.
There are people in the Bitcoin Cash community who genuinely believe that Blockstream deliberately hobbled Bitcoin with a small block size limit as part of a grand plan to push people towards its scaling solutions, Lightning and Liquid. A sample post from Redditor BitAlien: “It’s not a conspiracy theory, it’s a conspiracy. Blockstream exists to cripple Bitcoin and allow the legacy banks to retain control over us. Seriously, WAKE UP SHEEPLE!”
And for their part, some in the Bitcoin community believe that big block proponent Roger Ver set out to destroy Bitcoin to pump up the price of Bitcoin Cash.
Hoffman admits he disappeared down the rabbit hole on this conspiracy theory and spent far too long investigating “inside information” about Blockstream allegedly bribing various parties to get its own way. But in the end the truth appears to a lot more humdrum: the two communities just have genuine ideological differences about scaling the blockchain. In reality he says, it comes down to the question: “Is it digital cash or is it digital gold? If you believe in one of those two then you have two different technical solutions.”
Occam’s Razor, the idea that the simplest explanation is often the right one, helps explain away some of the theories. But it doesn’t explain how some people arrive at the really ‘out there’ conclusions, like Redditor ShadowOfHarbinger who suggested in r/btc this week that Blockstream is really a front for the CIA.
The “CIA has been meddling in Bitcoin affairs since 2012-2013,” he wrote blithely as if everyone knows that. “It is all a government operation and government-sponsored opposition.” He received 12 upvotes.
It’s a riff on the theory the CIA invented Bitcoin. After all, the NSA created the SHA-256 hashing algorithm that Bitcoin uses and Satoshi Nakamoto means something vaguely like “Central Intelligence” in Japanese…
Searching for answers
Hoffman says it’s really not that surprising that some Bitcoiners hold unorthodox views.
“Bitcoin started at the fringe and started to question the establishment, the economic rules and capitalism and everything — the whole world. So these people question other things as well in our society and that’s where maybe these conspiracy theories kind of slip in.”
Crypto fans and conspiracy theorists share similar motivations: Both groups see themselves as warriors fighting against a corrupt elite – whether it’s bankers or the Illuminati. Both groups are suspicious of institutions and are more open minded than most when it comes to leftfield ideas.
And given how opaque and incredibly complex the financial system is, it’s probably not surprising that some people go down some blind alleyways in their pursuit of the truth. David Golumbia, the author of The Politics of Bitcoin: Software as Right Wing Extremism, says that even the question “what is money?” defies easy answers.
“It’s very hard to get your head around… even the experts can’t really provide you with a terrific understanding,” he says. “I think a lot of people want a simple explanation. They want something that makes sense to them. I understand it’s frustrating when reality just doesn’t conform to our desire to have things be simple.” In this view, a conspiracy theory in this view is a neat and simple wrong answer to a complicated question.
In a similar vein, Horizen founder Rob Viglione says he’s observed that some people, especially in the privacy coin sphere, are drawn to big ideas and grand narratives.
“There’s this assumption of agency in the world, like big forces are being driven by some higher agent … big forces, mystical forces are driving things,” he said. “And I think there’s a lot of that for some people who come into Bitcoin. It’s like ‘we’re changing the world’. There are really big ideas here you know and it’s easy to sometimes think there’s agency behind just a whole bunch of random events.”
A similar phenomenon has been observed in other parts of the financial world. Time Magazine’s Justin Fox wrote that Wall Street traders also love conspiracy theories, in a piece on ‘alternative’ financial news source Zero Hedge (which was also recently banned from Twitter for spreading coronavirus misinformation).
“Wall Street traders are among the most conspiracy-minded groups of people on the planet,” he wrote. “That’s because (a) some financial market conspiracies are real and (b) without theories of some sort to grasp on to, you’re going to get completely lost in the chaos of the market’s day-to-day movements.”
The Dark Side of End The Fed
The US Federal Reserve has long been an object of suspicion for Bitcoiners. It gives five unelected officials the power to change policies on the world’s reserve currency with impunity. And as Hoffman points out, the whole concept is weird: “I mean, the Fed isn’t a government body, it’s owned by private banks,” he says (which is sort of true). “And if you tell that to someone who doesn’t know, it sounds like a conspiracy theory.”
While they may be seen as a bunch of conspirators devaluing the currency and carrying out various schemes for nefarious reasons, Viglione says it’s much more likely they’re just blundering about, pulling levers in the hope that it’ll help the economy.
“My background is in academic finance,” Viglione says (he analyzed the Fed’s actions in detail for his PhD). “I can say quite confidently: I don’t think that they have any idea what they’re doing.”
The further some people go down the rabbit hole of ‘greedy bankers’ the more likely it is to lead them somewhere nasty.
“A lot of that Anti-Fed stuff leads back to the Rothschilds and Jewish conspiracy theories and the Protocols of the Elders of Zion and all that crap,” says Ferguson. “Once you start questioning the Fed and where money comes from and all that stuff you can fall into a gravity well that leads you to thinking the Jews did it.”
Let’s not overstate it, but there’s definitely some overlap. The crypto trading discussions on on 8chan were full of far right hatred and anti-Semitic memes right up until the site was taken down after its users carried out three mass shootings. It was resurrected as 8kun on the darknet thanks to Monero fork Loki. (For a taste, if you dare, visit 4chan.)
Neo Nazis, including Andrew ‘weev’ Auernheimer, Stormfront and The Daily Stormer also stay afloat with Bitcoin donations. “Many on the far-right were early adopters” writes the Southern Poverty Law Centre on its page monitoring their known BTC addresses. “And … many cashed in as the currency’s valuation skyrocketed.”
Digital gold bugs
Golumbia used to work on Wall Street and when Bitcoin began to emerge a few years ago he realized he’d heard a lot of the same conspiracy theories already. They were “the same conspiracy theories that I used to see floating around gold.”
Gold bugs have a reputation for wacky ideas. Urban Dictionary defines them as: “associated with paranoia, conspiracy theories, 9/11 ‘truthers’, survivalism, tax protesters, racism, anti-semitism, and the far right. ‘As a gold bug, I can tell you that gold is REAL money, and worthless fiat paper money is a fraud’.”
Bitcoin narratives around hard money, fixed supply, inflation hedge, market manipulation and distaste for the Fed’s money printer, can all be traced back to gold bugs.
Everett Millman, Precious Metals Specialist at Gainesville Coins — which is developing a gold backed crypto — believes the idea of “hard money” comes hand in glove with a deep distrust of the financial world.
“Such a viewpoint is steeped in the idea of conspiracy at its genesis: it characterizes the establishment of the Federal Reserve in 1913 as a coup against an honest system of money based on gold,” he says.
“So the whole premise is entangled with the notion of conspiracy from its start. It’s fair to say that this does open a path for gold bugs to be exposed to many other kinds of conspiracy theories. When you believe you’ve been lied to about something as basic as how money works, it naturally leads to questioning other aspects of the world. Similar feelings animate the crypto community.”
He says the strain of anti-Semitism that infects the fringes of the gold and crypto communities — small though it may be — contributes to them being pushed into the margins of mainstream financial discourse. He says this can become a self-fulfilling phenomenon.
“When it seems the entire investment community is against you, grand conspiracies take on greater explanatory power.”
Bitcoin was born of paranoia
Golumbia is no fan of Bitcoin and sees conspiratorial narratives in everything from the concept of ‘middlemen’ (which he say recalls anti-Jewish tropes) to the hatred for the Fed. But he argues convincingly that Bitcoin was born out of the paranoia inherent in cypherpunk concerns about the impending surveillance state. As Ferguson points out:
“Paranoia is at the heart of conspiratorial reasoning.”
Golumbia details in his book how Bitcoin had its roots in Eric Hughes’ ‘Cypherpunk’ mailing list. By 1994 the 700 ‘cypherpunks’ included Blockstream’s Adam Back, Satoshi-confidant Hal Finney, ‘Bit Gold’ creator Nick Szabo and even Satoshi-claimant Craig Wright.
The cypherpunks were hyper-concerned with online privacy and the government monitoring their communications, and saw cryptography as a tool to carve out a space free from Big Brother’s watchful eyes.
“The problem they kept running into was money,” Golumbia explains. “How do we pay for stuff because they’re using our credit cards and our bank accounts to track what we do? Wouldn’t it be great if we could pay each other and give each other funds without being trackable? So they started applying encryption technologies to a variety of money-like instruments.”
“Bitcoin is probably iteration five or six of these projects to build a currency that was outside of the state’s ability to regulate it, or stop it.”
In this conception, ‘the paranoid style’ is baked into Bitcoin’s technology and purpose. Horizen founder Viglione points out that one of those 700 cypherpunks was Zooko Wilcox O’Hearn, who went on to create the privacy coin Zcash, which was forked into Horizen.
“These technologies come almost directly out of the cypherpunk movement,” Viglione says. “Big Brother’s watching us, let’s build something to stop that.”
But just because you’re paranoid doesn’t mean they’re not after you, as Joseph Heller noted. And as Viglione remarked:
“Probably the ultimate conspiracy theory is the idea of Big Brother or the NSA spying on everything we do — which turns out to be true.”
Crypto community shines
Despite the small, but noisy minority of the crypto community spreading 5G coronavirus conspiracy theories, Hoffman points out that many more crypto adherents were providing quality information and analysis about the coronavirus pandemic long before the mainstream media.
“The information we’re getting from some of the good sources from crypto is far, far superior to what I’m getting in the mainstream media,” he says. “Not trusting authority figures like journalists makes members of the crypto community take things into their own hands and say ‘OK, I can report on this better, I can do a virus model and an update in my daily newsletter better than the Wall Street Journal’.”
Hoffman believes that unorthodox perspectives and a propensity to look further than the accepted narrative are among the crypto community’s greatest strengths.
“Those investors who question commonly held beliefs, they are the ones that every decade spot things that nobody else sees,” Hoffman says. “You’re more likely to see a black swan event, you’re more likely to add a unique solution to a problem that nobody else even knew existed — like Satoshi did 11 years ago.”
What it’s actually like to use Bitcoin in El Salvador
Can Bitcoin survive a Carrington Event knocking out the grid?
‘Make sure Ethereum wins’ — Steve Newcomb reveals zkSync’s prime directive
Inside South Korea’s wild plan to dominate the metaverse
The legal dangers of getting involved with DAOs