Is crypto real? What is real?

In the age of hyperreality, the value of currency is determined by faith and fandom—not a treasury.

Apr 4, 2022 Tech

Oliver Scialdone
3 months ago
The American philosopher Rick Roderick, when giving a lecture on postmodernism and its dizzying effects on the psyche, once quipped that his students, wishing to participate as much as possible in America’s consumer culture, would seemingly change their identities at least once, if not a few times, a semester: My week as a beatnik, my month as a hippie, my semester as a Catholic.

“An identity…as a fad! All of it affected; none of it felt,” the philosopher lamented.

And maybe these identities were fads, and maybe the identities of today are fads, too, but does that make them any less real? 

Roderick, who died in 2002, barely lived to see the rise of the internet, but he’d likely seen enough to predict what the effects of 24/7 communication-inundation would do to the society that, in his lifetime, had moved from an empire of production to an empire of consumption. Jean Baudrillard, one of Roderick’s literary heroes, spent the bulk of his career theorizing these implications, building on multiple theses that would come to define the modern world, one in which branded logos, synthetic foods, and even synthetic body parts would come to have more value, more cultural relevance, than the objects to which they would refer.

Perhaps most famous for “Simulacra and Simulation,” the book that inspired “The Matrix” (1999), Baudrillard’s earlier treatises, 1968’s “The System of Objects” and 1976’s “Symbolic Exchange and Death,” seemed to predict this world overrun by hyperreality, an ontology which posits that the reality that humans have come to know is no longer accessible; in its place, a media-saturated fog, which most people mistake for reality, and into which injections of reality do sometimes slip (the degree to which, however, varies and seems to be thinning out). Baudrillard, famous for his bold proclamations and odd phraseology, defines hyperreality best through example. Although French, he was quite fond of America, often visiting the country to better understand how a society so lacking in artifice and origin could function as the 20th century’s leading superpower:

Disneyland is presented as imaginary in order to make us believe that the rest is real, whereas all of Los Angeles and the America that surrounds it are no longer real, but belong to the hyperreal order and to the order of simulation. It is no longer a question of a false representation of reality…but of concealing the fact that the real is no longer real, and thus of saving the reality principle.

Thus, when theorizing cryptocurrency and NFTs (and the future of currency and art on a general, protracted level), one cannot help but recall Baudrillard, who might say something like cryptocurrency exists to make one think the dollar is real. The American dollar, after all, runs solely on faith. This faith has been dwindling year by year, thanks in large part to the Federal Reserve’s generous printing policies, the bulk of which just end up lining the pockets of the nation’s billionaires. But even before the gold standard was dropped, what was a reliance on gold except a belief in the cultural value of gold? At bottom, does all currency run on faith?
VIISA by Moxarra Gonzalez on SuperRare
It is by purely rational decision-making that Americans, especially younger Americans, have looked beyond the dollar and the stock market for places to build their nest eggs. (If so few are making decent money anyway, why would they hold that money in a currency which is being artificially propped up, when they could invest in currencies which have, in the past couple years, posted absurdly positive gains? Tweets and articles constantly circulate, informing readers that if they’d only invested their three stimulus checks in X coins, here’s how much money they would have made. And, not for nothing, they’re not wrong. Binance Coin, Ethereum, and Solana, to name a few, have had thousand-percent returns since early 2020. The stock market has done well, too, but not this well. The question that must be asked, then, is what can media and the Baudrillardian concept of sign value tell us about such gains, and the future of these gains.

 

Media plays a prominent role in shaping the desires and wishes of the general consumer. The rise in cryptocurrency has been almost wholly dependent on its appearances in media, and its resultant ability to maintain staying power in public discourse. This relevancy has led to professional athletic sponsorships, mentions on “Saturday Night Live,” and hordes of internet users who dub themselves the “#dogearmy,” perhaps an outgrowth of what happened earlier this year with the Wall Street Bets Redditors. The fact that $AMC and $GME are still hundreds of percent up from where they started in January 2021 is proof of the staying power of the sign economy, a concept fashioned from one of Baudrillard’s main ideas, that sign value, the symbolic value of a commodity, has not only more importance than a commodity’s use or exchange value, but has fully eclipsed these erstwhile forms of value.

The r/wallstreetbets header
The relevancy of $AMC and $GME as memes, in spite of their valuelessness, is what makes their stocks valuable. Apply this to cryptocurrency, and it’s not crazy to ask just how much of a certain coin’s value is predicated on a coin’s popularity, the coin being a fixture in the general lexicon, or the coin having a fun and silly name. Roderick, in a lecture, once quipped that Ronald Reagan, the first sitting TV-star president, didn’t necessarily have popular policies–it’s that liking him was popular. Reagan’s popularity is what made Reagan popular. If the average person at the time were to dissect his cabinet, or his policies, they might actually have been repulsed by him. But the sign remained.  People buy coins because they believe they will go up–and they have. Once you own a form of alternative currency, you get the chance to succumb to an ecstasy of identity that is not quite possible through ownership of traditional forms of labor. If you own a certain coin, you become a member of that coin’s online fanbase. You “get in on the ground floor,” but you also get something else: you get a little bit of an identity rush. You’re not someone who owns shares of X; you become part of X.

At bottom, humans want to be a part of something. It is in our nature to want to participate in the cultural events and upheavals of our times. In a society which offers less and less real experiences to people, the only true experiences left reside in participating in the hyperreal. To quote a gambler I once met at a casino in Florida, “I’d rather play and lose than not play. Because even if I lost, I got to feel the rush.” The rush the Wall Street Bets Redditors felt is the same rush that the #Dogearmy felt is the same rush that those longing Bitcoin have probably been feeling, too. Is that rush worth preserving? Maybe. Regardless, people will chase it.

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Scott Wordsman

Scott Wordsman is a writer and professor from New Jersey. His essays can be found in The Colorado Review, LIT Magazine, Map Literary, and elsewhere.

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