Crypto anons and the mainstream
How will crypto deal with its culture of anonymity as the space gains mainstream visibility?
Hi! Katie here this week. See below for some loose thoughts on the culture of anonymity in crypto and how it relates to the recent unveiling of the team behind Bored Ape Yacht Club, who remained completely anonymous until last week despite a $5 billion valuation.
~and when you’re done reading, be sure to check out our latest episode with Jaimin Desai on all things crypto taxes~
–––––––
The biggest question on my mind: How will crypto deal with its anon culture as the space gains mainstream visibility?
Since falling down the crypto rabbit hole last fall, I’ve been fascinated by the concept of anonymity in web3. Many influencers and leaders in the crypto space are anonymous, and they hide behind avatars and pseudonyms to protect their identities. Of course, anonymity on the internet is not a new concept – it’s been around as long as the internet itself.
Still, I’d argue that anon culture is baked into the nature of crypto even more than it is baked into the “regular old web.” For starters, the person who created Bitcoin, Satoshi Nakamoto, remains anonymous to this day. The fact that one of the biggest icons of the crypto movement is unknown certainly proves the point that you don’t have to be well-known (or known at all) to make a massive impact in the space.
I would also go as far as to say that the entire concept of decentralization and the blockchain creates a “small fish in a big pond” effect. The blockchain is no greater than the sum of its parts; similarly, players in the crypto space are nothing more than one small block in a giant chain. That goes even further on an individual project level. Many crypto startups operate in a “decentralized” way – meaning there is no true executive team, and everyone works together toward one goal, with the “contributors” to the project voting on big decisions rather than leaders deciding alone. That creates an environment where it isn’t particularly beneficial to be a big fish, nor is it even necessary to be one in order to succeed in the crypto world.
The ethos of collectivity runs deep in the crypto space, and that seems to create an environment where you don’t have to be particularly visible or well-known on an individual level to be a big player. You’re judged on what you build and how you contribute, not based on who you are or who you know, so it follows that no one really needs to know who you are for you to succeed.
The crypto culture of anonymity may be a by-product of the culture of collectivity, but there are also people in the space who use anonymity as a shield. Some do so for very legitimate privacy and security reasons – particularly those from marginalized groups who face harassment, or those who own valuable assets. (More on that point in a deeper dive on anon and identity by Tim Schneider here.) Remember, blockchain transactions are public, so your crypto wallet is inherently tied to your identity. (You can always see the transactions associated with a certain wallet even if the person behind it isn’t known.) But there are also those who hide behind anonymity to avoid accountability, and it’s hard not to get the two tangled.
So what does this have to do with Bored Ape Yacht Club?
Started by four pseudonymous founders in early 2021, Bored Ape Yacht Club has quickly become synonymous with the rising cultural relevance of NFTs. Many celebrities have bought in to the BAYC craze, including Paris Hilton, Jimmy Fallon, Steph Curry, and Serena Williams. Buying a Bored Ape NFT gives you access to the social club, which throws exclusive parties and offers other perks to members. As of this writing, the floor on the project is around 103ETH (or a little over $300,000), making it the most expensive NFT project on the market today.
As one of the first NFT projects to have major mainstream visibility, the company behind the project, Yuga Labs, has gained attention from the tradfi world. Rumors swirled earlier this month that BAYC was in talks to receive a major funding round from VC firm a16z – one that would put Yuga Labs at a $5 billion valuation.
Shortly after that news leaked, a reporter from Buzzfeed News did a deep dive to find the identities of two of the four founding team members, known previously online as Gargamel and Gordon Goner. According to Buzzfeed’s reporting, they’re both in their mid-30s, met while growing up in Florida, and one of them has a background as a writer and literary critic. Both have previously given interviews to other news outlets under their pseudonyms, but no outlet had yet revealed their true identities.
Crypto Twitter absolutely melted down. The journalist who revealed their identities was accused of “doxxing” (publishing personal information about someone, typically with malicious intent) and sent death threats. Some keyboard warriors argued that Gargamel and Goner had a right to remain anonymous, for security and privacy reasons. Others argued that anonymity was only providing a shield so that they could avoid taking accountability – BAYC has faced accusations of using racist imagery and white supremacist tropes, claims that have yet to be directly addressed by the club or corroborated by a major news outlet (Ben Davis provides a great breakdown of the claims here).
My personal take? The a16z valuation rumor makes this identity reveal a little sticky. If Yuga Labs wanted to stay firmly in the crypto world – where anon culture is more widely accepted – I might be more inclined to say the “doxxing” was malicious or not necessary. But getting a $5 billion valuation backed by a firm like a16z makes you a major player in the mainstream world, and therefore makes a real case for the duty of journalists to reveal information that’s in the public interest.
Jeff Bercovici on Twitter said it best: “The job of journalists is to bring information about powerful entities and public figures into public view. That’s it…The BAYC founders may not be billionaires yet, but the fast-growing company they built is soon to be valued at $5 billion, and they control a market worth billions. Strictly on that basis, their identities are newsworthy.” (Full thread here)
–––––––
I have a feeling this issue will come up a lot in the coming months, particularly as we move toward mainstream adoption of crypto. To me, the anon debate is more of a psychological/sociological problem to be solved than anything else. I can see how in the early days of crypto, it was all fun and games when anonymous avatars were running around building projects and trolling outsiders. But the more money that flows in, and the greater impact crypto has on mainstream society, the harder it’s going to get to justify remaining anonymous as a major player in the space.
–––––––
One final loose thought: I do have to wonder if the anon debate as it relates to distrust of crypto is a chicken and egg situation. Crypto has a reputation for being shadowy and opaque, and that leads to a lot of hate projected at the space from the outside. Early anons like Satoshi Nakamoto had a huge part in building the crypto world into what it is today – but did the perception that crypto was built by a bunch of random anonymous people behind computers lead to intense distrust/fear around the space, which in turn led to more people wanting to remain anonymous to avoid harassment? It’s obviously a lot more complicated than that and its also opaque/not user friendly for many other reasons, but just something to chew on.
–––––––