Is Web3 Really Going That Great?

Washington Post, in Fast Company, and The Boston Globe. She has more than eighty thousand followers on her personal Twitter account and more than a hundred thousand on an account called web three is Going Just Great, which is based on her website of the same name. These are as you might guess, a chronicle of all the ways at web three is not going so great. Molly, delighted to have you on the show. Thanks for having me. It's my absolute pleasure. Why don't you tell our listeners a

little bit more about you. I'm a software engineer and a researcher um and I've been focusing pretty heavily on researching crypto, blockchains, web three everything related to that, and I run the website web three is going just great where I keep track of some of the hacks and scams and other general disasters that have been happening in the crypto space. In other words, Web three is not

going just great. It's a bit of a sarcastic title. Yes, what got you interested in becoming kind of the chronicler of our time as it were, of these various as you put it, hacks, scams, and disasters. I'm a bit of a chronicler by nature. I think I have kind of Wikipedia editor for you know, over a decade, and that's just something that I've always been really passionate about.

But around the middle of last year or so, it felt like crypto was really reaching a bit of a fever pitch when it came to the marketing and the hype and the social media coverage. It was, you know, it was pretty extreme around everyone should be investing in crypto,

you should be putting your retirement money into it. You could become a millionaire overnight, all these types of things, and I felt like we weren't seeing as much of the other side of things, where projects were getting hacked for sometimes hundreds of millions of dollars, people were losing their money because of individual hacks or because of you know,

not securing their crypto well enough. And there was sort of a very serious, you know, predatory side of things that I felt like wasn't getting enough coverage, and so you know, I felt like I would do my part to try to change that. Well, you've certainly redirected a lot of the conversation in ways that are arguably more constructive from a consumer protection standpoints then had necessarily been

the case before. But one of the things I'm sort of most interested in, and we have a very nerdy audience, so it's like, feel free to go deep into this. When you call yourself a natural kind of chronicler, an archivist as it were, how do you even keep track? Because I say this as an editor whose literal job is staying on top of, you know, the various things in crypto and every morning and I'm I wake up and I'm surprised by something like, what's your curatorial process?

How do you decide what things kind of rise to the occasion of being worthy of inclusion? For you, it's a pretty uh holistic process, I would say, you know, it's kind of just based on vibes. Typically all include things if there was, you know, a major monetary amount, so anything over like a hundred thousand dollars they'll typically include. But I also will try to include things that show that, you know, sometimes the things that are going really wrong

are affecting individual people really badly. And so even if a monetary amount might not be enormous compared to what an institutional loss might be, it still feels useful to describe that, you know, individual people are sometimes losing their entire savings in crypto, you know, even if for an institution it might not be that much money. As far as how I find things, that's pretty all over the place.

There's a lot of I'm an RSS, you know lover, so I have a pretty active RSS feed that I follow, and then a lot of stuff comes through on Twitter. But you know, one thing that's been great is as the site has gotten a little bit bigger and there's become more of a devoted readership, a lot of people will just send me things, and that's really helpful because you can never find everything yourself. That's true. Shout out

to RSS. I want to pick up on one thing that you said, which I think distinguishes your approach from that of others who are cropping up in this space, and which is the allowance for the individual and the highlighting of individual harms and not just institutional ones. I think one of your more recent and frankly harrowing threads was around the individual letters sent by creditors who had lost everything in a big kind of crypto bankruptcy sort

of fall out. Can you talk a little bit more about what motivated you to do that and if there's anything that you learned, you know, as you undertook that project. Yeah, I mean, so, one thing that I really care about is taking information that's not always the easiest to find

and trying to make it more accessible to people. And that's really what I was trying to do when I highlighted some of the excerpt from the letters that were being sent to the judge in the Celsius and the Voyage of bankruptcy cases, because you know they're online, but they're in a very obscure place there in these pdf files. You know, they're very long and it's a lot of reading to do, so I was just trying to sort of distill down some of the examples of how people

were really materially harmed in those particular their cases. And you know, in a lot of cases, it wasn't individuals losing millions of dollars, but it was people losing substantial amounts of their savings. You know, some of them were retirees, some of them had been working for decades and just scraping together what extra money they could. You know, some

of it was earmarked for their children's education. And it was really I think illustrative of how sometimes people who are getting into crypto are not necessarily what people picture.

A lot of the time. You know, people will often picture young, usually male people who have a little bit of extra money that they want to just wildly gamble away on crypto, and they're taking these moon shots and you know, they might lose it all, they might become rich, but you know, ultimately it's not a big deal whatever

happens to that money. But in this case, that was a market difference from what we were seeing in the letters, which was people who really thought that this was the savings account, that they could actually make interest rates that they weren't able to find in the traditional financial market, and who were really relying on this money. I mean, some people were sending letters about how they couldn't pay

medical bills. They couldn't you know, they were risks, they were at risk of losing their homes because of this bankruptcy, and so, you know, I just felt really important to make sure that people understood that, you know, there's actually real people being harmed out here. It's not just the crypto bro moonshot folks who it's like, oh, well, they

lost their gambling money. I'd like to read one of the ones that you highlighted because I book Market, because I think it it really described the disconnect in what you're describing in terms of you know, people think it's like dudes with laser eyes. But here's an example of the reality. This was on. You posted this on the twenty one of July. I'm a Celsius customer with a little more than fifteen thousand dollars worth of deposits that

are locked up in Celsius. Fifteen thousand dollars may not mean a lot to some people, but it is about six of my life savings. Losing all my savings will have irreparable consequences on the well being of myself and my family. I'm ashamed, humiliated, and quite frankly disgusted that I put all my trust into this company. I'll be spending years trying to make back the money I lost.

That was one of of these kinds of letters. And how are you finding that people are responding to this work that you're doing, Because, as you said, you sort of started as a countervailing wind right, everything was going up in the markets at that time. You know, like nobody really wanted to hear from somebody being like, I'm not sure if this is all such a good idea. I think even in you know, a bearer market, a lot of people don't really want to hear what I

have to say. Um, you know, I think with crypto, there's just an overwhelming incentive to be really positive about crypto at all costs because so much of crypto it's value is based on the belief that the token or the n f T or whatever the asset might be, will go up in price, and so anyone questioning it or criticizing it, you know, is presenting a risk to

the actual value of the asset. And so even you know, when things are going pretty poorly overall in the market, you know, individuals really want to keep that hope alive. I think, but you know, I think there has been more openness to hear the critical perspectives, as you know, people have seen that things have gone poorly overall, as

some skeptics have been predicting. You know, I think that it's really easy to brush off critics when you're seeing tokens double in price overnight and you know the lines

are going up. But as we see these collapses, you know, of these different crypto projects that were all sort of dominoes knocking each other over in this you know, spring and summer, I think people have realized that there really are serious issues with the industry as a whole, and sut the media and the general public have been a little more receptive to those viewpoints. Coming up, you'll hear more from Molly Whites around what ordinary people need to

understand about crypto. You've spoken in the past about the fact that you have experienced online harassment, you know, in kind of various iterations of in the life of a person, particularly a woman who has been very visible and very online for a long time. I can share because I have shared here before that you know I have on my team. We will have a report to publish a story and then in their d MS or their emails

or you know, kind of like directly and aggressively. Folks will be like, why are you everything from very mild? Or you must be a paid shill who is trying to you know food bitcoin food being a phrase used in crypto world to mean fair uncertainty and doubt um or you know, kind of to the extremes of threats and you know, other types of things for you know, what I would consider as an editor to be like a pretty straightforward story about a market movement or or

or a company doing something. Is there anything in your experience of having navigated this world that you think leads to this heightening of both emotions and a kind of like violent nihilism as it were in some cases. Yeah, I mean I think it's related to what I alluded to before, which is the financial incentive to be positive to you know, promote the idea that the token prices or the market as a whole are going to go up.

But I think there's also a strong ideological component to it as well, where people really see crypto as the solution to a lot of serious problems, and when someone is speaking against you know, the potential of crypto, they see that as someone saying, you know, I don't want to solve those problems, or you know, you are a bad person for trying to solve those problems, which I think it's really not the message that a lot of people are trying to get across, but it's become twisted,

I think in the eyes of a lot of people. But yeah, I think, you know, generally speaking, when you threatened someone's bottom line, you know, when when they have a lot of investment into you a you know, a specific asset and you do something that might cause that asset price to change, even if it is fairly unbiased reporting or just you know, just describing what is happening in the real world, people will respond very, very aggressively

to that. And I think, you know, the culture in crypto has really contributed to that, where people are somewhat encouraged to do that and it becomes you know, insular movement where that behavior is just completely normalized. Is there anything in addition to that financial incentive that you find either unusual or distinct about how some of this takes place. I think the level that it happens in crypto is unusual.

I mean, I've definitely experienced harassment because of my involvement with Wikipedia, my coverage of you know, right wing political movements in the US, and it's definitely, you know, pretty serious in that particular group as well. But with crypto,

it's a very it's very strange. I think the degree to which it's normalized and I don't know if it has to do with the amount of people who are really anonymous in crypto and so they feel you know, protected in saying some really heinous things, but the level to which the toxicity has really emerged from crypto is pretty unusual, and I think that has been recognized sort of in the main stream, where people have this view of you know, crypto bros who are you know, have

the laser eyes and it's sort of everyone. I think there's this sort of perception of crypto people as very intense and often aggressive, and I guess I would say

it's not unearned, right. I want to go back to something, you know, a couple of months ago, when you were invited to give a statement to the Financial Stability Oversight Counsole and regulating to just all assets, you talked about the trade offs of anonymity and pseudonymity, And one of the things that you said is it's actually really easy for people who think their transactions or privates or that their identities are obscured to inadvertently out themselves because the

the level of technical proficiency that you have to actually be secret the whole time is relatively high. Can you say a little bit more about why highlighting those kinds of things for what you called, you know, the quote

unquote average user is important to you. Yeah, I mean I think crypto has, you know, historically been something that's been used by people who are very technically proficient and who are capable of doing things like self custodying and you know, keeping track of all the different wallet addresses

and secret keys and all these different things. But you know, in the past couple of years, we've seen these attempts to mainstream crypto and to make it something that you know, everyone's got an app on their phone and their trading crypto day to day and everyone should be putting money into it. To some extent, I don't think that it is you know, achievable for average people to be using crypto in the way that people say that you should be.

So you know, someone might be able to download an app and trade some crypto, but you know, not your keys, not your coins. You know, you're supposed to be keeping in it in a wallet yourself, maybe a hardware wallet, something like that. And when you start to actually look into what it takes for someone to do that, it's not something that you know, your average person who's not a software person, they're not online all the time, can

really do. And so I think it's alarming that people are pushing the idea that crypto is something that you know, should become the backbone of a financial system that is widely used in society, when that's not achievable at the

current moment, and they're enormous hurdles to it becoming achievable. Well, first, I'll say I find it interesting how many of the folks who have spent so much time in and around software are some of the biggest skeptics of this message that like anyone can do it's totally fine, just like

slap our user into face one and it's great. But if you were asked the question, so someone who is not the most tech savvy, but you know, like reasonably away of what's going on, at a minimum, understands two factor authentication, and they insist, absolutely insist, that they want to get involved in crypto. And you could give them one piece of caution or advice, what would that be. I mean, it's pretty cliche, but don't invest more than

you can afford to lose. There is no predicting what's going to happen in the crypto markets, and you should really assume that anything you put in could be worth zero tomorrow. And so, you know, it's really tempting, especially when the line is going up and people are, you know, advertising all these returns that they're making, to put a lot of money into it on the hopes that, you know, you might be one of those people who triples their money.

But you know, I've seen so many times that it goes in the other direction too, and you know, people over expose themselves. Well, I'll share, just as a closing remark, a quote that you highlighted on your blog from you know, Michael Sailor, who very famously said, you know, mortgage your house on by bitcoin, which is the the exact opposite of the kind of prudence and caution that you are recommending. Well, thank you so much for taking the time to be

on the podcast. It has been an absolute pleasure and you know, hope to have you back again. Thanks for having me. You can find her work, of course, on Twitter. On the next episode of Bloomberg Crypto. When crypto prices were high, you know, around this time last year, a certain class of crypto officianados took full advantage of the digital nomad lifestyle. They showed up in places like Portugal and Miami and San Juan, leaving behind their lives in

New York and London. How's that going now, you ask, Well, let's just say there's less sun see and sun in their lives these days. This is Bloomberg Crypto, a daily podcast from Bloomberg and I Heart Radio. For more shows from I Heart Radio, visit the I Heart Radio app, Apple Podcasts, or wherever you get your podcasts. Send us your comments, questions or suggestions for the show to Crypto at Bloomberg dot net or find us on Twitter. We're

at Crypto. The supervising producer of Bloomberg Crypto is Vicky Verglina. Our senior producer is Janet Babin. Our producer is Sharon Barriro. Associate producer is Ty Butler. Desta wonder At is our engineer. Original music by Leo Sidran. I'm Stacy Mariachmal. We'll be back tomorrow.