A tweet by the Brazilian computer science professor inspired 1,500 experts to write a letter to US Congress warning about the risks of blindly trusting cryptocurrencies
In early May, Jorge Stolfi, a professor of computer science at the University of Campinas (Brazil), posted the following tweet in English: “Every computer scientist should be able to see that cryptocurrencies are totally dysfunctional payment systems and that “blockchain technology” (including “smart contracts”) is a technological fraud. Would they please say that out loud?” Stolfi now has 9,400 followers. Back then he had fewer. In the discreet world of computer science, the 2,000 retweets and 7,000 likes his message received were the equivalent of going viral.
Stolfi was saying something that he had repeated before. In fact, he didn’t even see it as controversial. But in today’s so-called “crypto winter,” where the value of bitcoin has dropped from around €60,000 to €20,000 since November, gave his statement new relevance. The tweet was the driving force behind a letter that 1,500 specialists signed and delivered to US Congress: “Today, we write to you urging you to take a critical, skeptical approach toward industry claims that crypto-assets (sometimes called cryptocurrencies, crypto tokens, or web3) are an innovative technology that is unreservedly good.” Among the signatories were Harvard lecturer Bruce Schneier and Kelsey Hightower, principal engineer at Google Cloud.
In a video call from Campinas with EL PAÍS, Stolfi explained why the computer science community feels that bitcoin works like a pyramid scheme and the reasons why it could crash.
Question. Why have you decided to send the letter now?
Answer. The usual attitude from my colleagues is: “Bitcoin and blockchain technology doesn’t interest me, technologically it’s garbage, I’m going to continue doing my own research.” The tweet woke these people up.
Q. It might be garbage, but billions of dollars are invested in crypto
R. Yes, and that’s why people felt guilty enough to sign the letter. For example, one of the signatories is a professor at Berkeley. In his department, there is another professor who has a blockchain company. I don’t know how the internal politics of universities work, but it is common for professors not to speak in public about what other colleagues are doing, even when it is something really bad.
Q. But the other professor might think that blockchain is useful.
A. Well, she has a company. I don’t know if she believes in it, but she’s making money. That is a problem. There are hundreds of startups doing blockchain technology. For the people involved in those projects, it’s money. It is a motivation to believe in the technology.
These pyramid schemes collapse when there are no more fools to fool
Q. Where is the profit of investing in bitcoin supposed to come from?
A. The only way to get money out of bitcoin is by selling it to someone else. When you do, someone agrees to buy your bitcoin for, say, $2,000 more. If you buy or sell from another investor, that does not change the total money there is: you receive the money that the other guy puts in. But if you buy it from a miner, the money goes out the system and never comes back. You can compute the money that has come out: about $20 billion. It is the difference between what investors have put in and what they have taken out. It is the extent of the losses.
P. Is it possible that as a society we invest millions in something we don't understand?
You must be logged in to post a comment.