Cryptocurrency asset manager Grayscale Investments removed a piece of false information from its official website after the intervention of an economist.
The New York firm had wrongfully maligned fiat currencies, writing that their average lifespan is 27 years. The statement attracted criticism from John Paul Koning, a Canada-based financial researcher, who claimed Grayscale merely misrepresented a long-running internet meme as fact.
Koning stated that he was long investigating the origin of the average-life-of-fiat claim, which led him to an article published in 2011 on Washington’s Blog, a platform for a group of anonymous financial writers. There he found more backlinks, which sourced the said claim to another financial writer named Chris Mack. Nevertheless, both the articles could not justify why a fiat currency’s average life is 27 years.
“In a disclaimer, the author noted that “I don’t know Chris Mack,” and thus couldn’t vouch for the figures,” wrote Koning. “However, he/she went on to say [that] the general concept is correct.”
The revelations came as cryptocurrency enthusiasts have used fiat money as a prop to boost bitcoin adoption. The comparison is plain: the government can print fiat money endlessly, which makes it inflationary. On the other hand, bitcoin’s supply is capped to 21 million, which makes it a scarcer, and a potentially deflationary asset. Evangelists typically use the fiat argument to showcase bitcoin in a good light.
The fiat currency meme, in a similar manner, spread like a fire across the internet and eventually made to the Grayscale’s sales pitch. The firm, which offers cryptocurrency investment products, unintentionally believed the rumor and served it to its potential customers as a reminder of why fiat is bad and bitcoin is good. Koning added that many cryptocurrency evangelists used the same 27-year-life rumor as a tool to support digital assets.
“A long list of cryptocurrency luminaries has dutifully mentioned the meme including Dan Held (2018), Taylor Pearson (2019), Barry Silbert (2019), Tuur Demeester (2015), Francis Pouliot (2018), and Adam Back (2019),” wrote Koning. “Grayscale Investments, a firm that provides cryptocurrency-based investment products, even includes it in their marketing material.”
The economist noted that gold bugs were at the internet meme way before the cryptocurrency enthusiasts. He said that Nathan Lewis, the author of Gold: The Once and Future Money, spread the fiat-life rumor in written testimony to Congress in 2012.” Also, “Ralph Benko, a gold standard advocate, invoked the meme in a 2011 article. And Max Keiser, a long-time gold bug turned cryptocurrency advocate, began mentioning it as early as 2013.”
Over the past 300 years; more than 700 versions of fiat currencies have been created. The average lifespan for these has been 27 yrs.
— Max Keiser, tweet poet. (@maxkeiser) July 17, 2013
With Grayscale quietly removing the false text from its material, it is likely other evangelists would also refute from repeating the same rumor.
Getting some traction here.
Yesterday I launched my campaign to end the silly “27-year life” meme about fiat money (see https://t.co/jXxJGRr8Az). And now Grayscale has removed their link. Kudos to them for helping make the internet a more accurate place. https://t.co/UDobr3zoxB
— John Paul Koning (@jp_koning) September 19, 2019