The technology ran behind the narrative: a new decentralized infrastructure that required the rushed creation of centralized exchanges, a transparent world of code-as-law shook by periodic scams, an escape from the dangers of fiat money with valuations as volatile as dreams. But the narrative... the narrative galvanized enthusiasm and valuations, enthusiasm and therefore valuations, enthusiasm driven by valuations. There was something on it that resonated deeply and fiercely with many people.

So I would postulate that crypto is best thought about with the tools of mythology, not of finance. It was an apocalyptic event of sorts for those who believed (apocalypse means revelation - not the end of the world but a clear vision of its ultimate future), and if the semiotics of blockchains and apes was new, the mechanism of the promise was already old when it was uttered on the Mayflower: reject the staid regulations of traditional society and its laws, embrace enthusiastically and unflinchingly a higher law based on immutable principle, and you will be rewarded with wealth.

(To say that something not very unlike a religious movement was a poetical triumph is not to mix categories; as Harold Bloom practiced more than once and in more than one way, literature is often a fruitful lens to look at theology, and vice-versa.)

I like this framework because it's the kindest explanation of a paradoxical naiveté in the movement. Imagine an entire financial infrastructure predicated on the idea that you can't trust the traditional financial system but FTX is fine, no need to look into it. That isn't and wasn't a technological or strategic mistake. That's being taken by a narrative that has the force of a revelation. That's something we can all relate to, in one way or another. We are lived, as Auden wrote, by powers we pretend to understand.

However...

There's another, more general framework, which speaks less to naiveté than to a more consistent deliberate rejection of accumulated expertise. As technically gifted as the crypto community was and is when it comes to IT, it was also vociferously dismissive of a different sort of techne, that of financial controls and regulations. The paradox here, or rather the tragedy, is that the crypto community looked at financial regulation as a sort of "woke," conservative, traditional set of arbitrary and obsolete rules, when its history shows its something rather different: it's the result of, and the response to, centuries of crime and fraud. If, as Matt Levine has often written, crypto did a veritable speed-run through the lessons of financial history, it had to do so because it forgot or chose not to know that those lessons were already embodied in the same set of rules that, it's true, stifle traditional finance.

To think that, say, FTC and SEC are plodding organizations that don't understand the technology of crypto might or might not be or have been the truth, but what they do understand is financial crime, fraud, and malpractice. Crypto wasn't full of fraud and scams because it had unsophisticated technology: it was because (perhaps by design) built without whatever hard-won tools we have already built to deal with them.

To put it in another way, the crypto community — minus the scammers — was built by people who didn't have the centuries of collective experience with the sort of crime they the traditional finance field has, and was very deliberate on rejecting its tools. So it goes.

(There was also an equally mind-boggling tendency to take at face value valuations of illiquid assets marked to "models" that would make a Dadaist blush - but I think this was common, too, to the more general world of venture capital, and perhaps a necessary condition for it.)

I dislike this latter framework not because I think it's less accurate or useful, but because it echoes very well, and to a large degree overlaps with a larger tendency towards rejecting cumulative societal expertise as a whole. Whether is financial regulation, climatology, or epidemiology, there's a call to "do your own research" that does not mean "replicate the experiments and look at primary sources and their contexts" but rather "read a different forum." This isn't new, but it's always dangerous.

Ultimately, the rise and fall (and future rises and falls, whenever it might end) of crypto is of immense importance to those part of it and of relative interest to those outside it. But the deliberate rejection of cumulative collective knowledge — of the slowly and haltingly built invisible infrastructure of knowledge that makes societies possible — can cause terrible damage. Even the partial rejection of basic medicine caused, in the context of a pandemic, millions of avoidable deaths. Decades of deliberate erosion of climatology by part of the oil companies might have had even worse impact, and its worrisome, and not a little frustrating, to think of how many other things we have learned about the world, or about ourselves at least, we have to fight as societies not to forget.

Let me end with a positive note: we still haven't really seen what contemporary technology can contribute to finance, and, more interestingly, economics as a whole, when working in concert with those deeply knowledgeable with the challenges, traps, and opportunities of those fields. New technologies, perhaps most importantly AI, will change finance and economics. But to understand and build those changes we have to create them from inside those areas.