March 21, 2021: Proof of Work π§βπ»π
How can cryptocurrency be so much work if it feels so fun?
A bit of a debate has broken out lately about the nature of work in cryptocurrency. Some people have tried to recruit Wall Street talent into DeFi with the promise of better hours.
Itβs a pitch thatβs likely to fade away for several reasons. For one, do you want to recruit the workers primarily motivated by being less ambitious? But mostly, crypto buidlers pushed back by noting they work way harder than Wall Street.
A more accurate recruiting pitch would be: βLonger hours, but memes!β
This debate may punctured some cognitive dissonance, as people are having so much fun creating many donβt realize itβs all-consuming.
Like black holes, if you get too close to crypto you pass the event horizon. Once you pass this point, youβre permanently sucked in and your brain becomes spaghettified.
For the crypto community, work remains a passion project. Itβs too much fun for people to realize theyβre actually work.
Crypto is the irresistible siren song of today, captivating all who listen closely. Except instead of leading to shipwreck, it yields double digit returns and lambos.
Money Never Sleeps
One reason crypto commands so much attention, especially relative to the traditional finance sectors, is that it simply never stops. The Wall Street concept of βtrading hoursβ feels quaint if not downright archaic.
The concept of a hobbyist day trader doesnβt really make sense for markets that never close. Bitcoin logs about 5x the trading hours each year.
Sure, youβre always free to simply trade whenever you like. But within crypto if you are serious, itβs pretty much mandatory that youβre building and running your own bots. Otherwise if you go to sleep youβre losing the potential to make money.
Itβs estimated that about half of traditional stocks are now traded algorithmically. Thereβs no formal estimate for the cryptocurrency space, but some estimates go as high as 80%.
It makes sense given the ease of access. You can put together a trading bot in 10 minutes. This means you could probably put together a bot to generate technical analysis even quicker. Watch!
βThere are dozens of price action viewed on an impending trend change. Doji candlesticks, for an order to pinpoint trading strategy might be very popular with pivot point indicators that price action, indicating that the price levels are the retracement.β
Outside of technical analysis, thereβs a ton of fascinating content in cryptocurrency. Just trying to stay on top of trends is enough to destroy your nights and weekends.
Even DeFi offers no respite. One would think βlock your money and earn yieldβ would make life easier with a set it and forget it approach. Yet it too ends up becoming all-consuming.
Yet thereβs so many offerings, with new projects launched every day, plus watching out for hacks in the space. It ends up feeling like, well, work.
Is This⦠Work?
As a physics major, I get stuck on the definition of work in terms of βtransfer of energy.β But is HODL-ing bitcoin work? Trading cryptocurrency leaves an energy footprint in terms of mining, so it has a physical argument that this is work. Keeping BTC in cold storage arguably expends no energy and therefore isnβt classically βworkβ.
Yet anybody who has been in the space for some time will likely agree HODL-ing is the most difficult action of all. Nearly every OG has a sob story about the pile of BTC they wish they hadnβt sold for some random π©-coin, such that these stories are now cliche and uninteresting.
Going against your natural instincts to panic sell can arguably require a certain expenditure of chemical energy.
Within startups thereβs a concept of βsweat equityβ and βcash equityβ. Several hours spent building a project might get you some percentage of equity, or alternately an investor can just buy in at that price for a theoretically equal contribution. One could make the argument that the work HODL-ers are doing is keeping coins out of circulation and therefore reducing the supply and inflating the price.
The physics definition of work breaks down relative to the colloquial definition of work as human labor exchanged for money. Although we believe economics will ultimately be recognized as a subset of physics thanks to cryptocurrency, thatβs a different article.
Within the human definition of work, the βThree Sectorβ model would put cryptocurrency into the late-stage tertiary or controversial quaternary sector. The real work is still done by the developers of course, but this model would count meme-generation arguably an economically productive activity.
Therefore, since Iβm behind on my coding work, Iβll try to be productive by encapsulating this debate in meme form.
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