Dogecoin creator Jackson Palmer has returned to Twitter to post a thread blasting cryptocurrency, calling it an “inherently right-wing, hyper-capitalistic technology” that is being used to scam the vulnerable.
According to Palmer, the technology was built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity.
Palmer’s lambasting of the cryptocurrency space should not come as a surprise. In January 2018, he wrote an article for Vice about his creation of Dogecoin, noting that it had a $2 billion valuation, which represented something “very wrong.”
As of today, thanks in part to the efforts of high-profile posts from Elon Musk punting the token, Dogecoin’s market capitalisation has grown to $26 billion — and again, that’s with a massive plunge from its highs.
Of course, there are going to be detractors who argue that he’s just resentful that he built this ultra-valuable joke and never cashed in. In his Vice piece, he talks about stepping away and giving up his coins back in 2015:
By 2015, the energy in the community had changed—those who got burned by the scammers began to disappear and the community’s interest in Dogecoin declined, as did its price in US dollars. At the same time, confidence in Bitcoin was shaken: hacks and scams dominated the news cycle, and merchant adoption failed to grow at forecasted rates. Despite these events, huge sums of venture capital continued to pour into fresh cryptocurrency companies backed only by buzzword-laden websites and lacking any discernible business model. In light of all this, in 2015 I decided to back away from any involvement in Dogecoin and cryptocurrency in general. I handed development of Dogecoin over to a team of community members that I trusted. I made it clear at the time that any Dogecoin I previously held—the small amount I have now came from people “tipping” me after I left—had been sent to charity drives run by the community, and that I’d made zero profit from my involvement with the project.
In his Twitter thread, Palmer said that despite claims of decentralisation, the cryptocurrency industry is controlled by a powerful cartel of wealthy figures.
“With time [they] have evolved to incorporate many of the same institutions tied to the existing centralised financial system they supposedly set out to replace,” he said.
“The cryptocurrency industry leverages a network of shady business connections, bought influencers and pay-for-play media outlets to perpetuate a cult-like ‘get rich quick’ funnel designed to extract new money from the financially desperate and naive.”
While financial exploitation existed before cryptocurrency, Palmer argued that cryptocurrency is “almost purpose-built” to make the funnel of profiteering more efficient for those at the top and less safeguarded for the vulnerable.
“Cryptocurrency is like taking the worst parts of today’s capitalist system (eg. corruption, fraud, inequality) and using software to technically limit the use of interventions (eg. audits, regulation, taxation) which serve as protections or safety nets for the average person,” stated Palmer.
“Lose your savings account password? Your fault. Fall victim to a scam? Your fault. Billionaires manipulating markets? They’re geniuses,” he said.
“This is the type of dangerous ‘free for all’ capitalism cryptocurrency was unfortunately architected to facilitate since its inception.”
There are many in the cryptocurrency community who believe the exact opposite to Palmer —that crypto can be an egalitarian force — and they’ll point to what’s going on in El Salvador, or other emerging markets, where holders use the asset as a way to avoid failing currencies.
I am often asked if I will “return to cryptocurrency” or begin regularly sharing my thoughts on the topic again. My answer is a wholehearted “no”, but to avoid repeating myself I figure it might be worthwhile briefly explaining why here…
— Jackson Palmer (@ummjackson) July 14, 2021
Reporting with Bloomberg.