Thursday links: Snow Crash, South Park, Bitcoin’s IPO and bubbles

Neal Stephenson is still interested in crypto

Neal Stepheson, famous for predicting the Metaverse in his 1992 novel Snow Crash, also predicted crypto.

In The Diamond Age (1995), he imagined a network "designed from the ground up to provide privacy and security so that people could use it to transfer money."

In Cryptonomicon (1999), he described a digital currency based on public-key cryptography and backed by physical gold.

In Reamde (2011), the plot revolves around a highly valuable, in-game virtual currency, and all the problems it causes when people try to convert it into real-world currency.

(The Diamond Age also predicted large language models.)

These novels were so prescient because they were steeped in the cypherpunk ideas Stephenson was following at the time — which makes it encouraging that he still finds today’s crypto scene cypherpunk enough to be interesting.

“You see a mix today of people who are genuinely driven by the belief that they're doing something socially constructive for society by getting us away from centralized financial institutions and centralized information brokers,” he told Epicenter, “mixed in with a lot of other attempts to commercialize this that I think are often driven by less idealistic considerations.”

That mix has been shifting in favor of the “less idealistic” recently — and, after listening to Stephenson, I wonder if that might be why the crypto industry is struggling to create things that people outside of crypto find valuable.

“It’s impossible to architect a compelling experience backwards from a desired financial outcome,” Stephenson says. “If you start with the goal of ‘let's make a lot of money’ and then try to reverse engineer a creative project from that motive, it's not going to work.”

He advises people to “resist that temptation to just immediately financialize everything and concentrate instead on the intangible value of what people are creating.”

To that end, Stephenson is the co-founder of Lamina1, a blockchain platform that hopes to provide the “economic rails” for a Snow Crash–like metaverse, in which creators set their own terms.

Whatever the project's merits, I find that encouraging, because if Neal Stephenson still thinks crypto is worth working on, I do, too.

South Park is still interested in crypto, too 

The writers of South Park sum up the state of crypto in just a few lines of dialogue:

Kyle: Stan, what are we doing?
Stan: Whaddya mean, dude? We’re trying to change things.

Kyle: By selling cryptocurrency?

Stan: What’s wrong with trying to make a little money while also pointing out the things wrong with our town?

Most of us are Stan, I think, trying to make a little money while also pointing out what’s wrong with finance and the world.

But sometimes we forget why we’re here.

Later, when Stan and his crypto advisor are brainstorming how to “create FOMO” for a South Park memecoin, they mistake Kyle’s moral rebuke for a marketing pitch:

Kyle: You guys, this isn’t about a coin. It’s about a movement.
Stan: Oh yeah, that’s really good.

Crypto advisor: That’s some savvy jujitsu right there.

The difference between Kyle and the crypto advisor — between cypherpunk principles and crypto opportunism — can get muddled at times. 

The trick, as Neal Stephenson reminds us, is keeping your wits about you and knowing how to distinguish between those things.

The benefits of cognitive bubbles

Ben Thompson says there’s a “quasi-spiritual element” to the current AI bubble.

“There are people working at these labs that believe they are building God,” he writes.

“That is how they justify the massive investment in leading edge models that never have the chance to earn back their costs.”

This should, in theory, be a good thing.

Bubbles are productive when they leave behind physical infrastructure, like railroads and fiber optic cables (the Carlota Perez thesis).

But they can also be productive by creating “cognitive capacity” — the surge of innovation and invention that occurs when everyone is inspired to pull in the same direction (the Byrne Hobart thesis).

AI is unusually inspiring, so it should, with luck, have unusually high returns from the cognitive capacity it’s creating. 

“There are benefits from bubbles that pay out for decades,” Thompson concludes, “and the best we can do now is pray that the mania results in infrastructure and innovation that make this bubble worth it.”

This might be applicable to crypto, too, which is sadly not in a bubble — perhaps because it’s lost some of the “belief and motivation” it once had from a shared faith in cypherpunk values.

Bitcoin’s IPO

Jordi Visser attributes bitcoin’s current weakness to selling by the first generation of believers: “Addresses that accumulated when Bitcoin was a cypherpunk experiment are finally moving their holdings.”

The original cypherpunks, he says, “are passing the torch [to] entities who care less about ideology and more about returns.”

(Or, in South Park terms: from Kyle to Stan.)

As a result, Visser says, “Bitcoin will probably never again have the radical energy it had in its early years.”

But he sees this as a positive development: “From a market structure perspective, this distribution is enormously bullish long-term.”

Visser equates this to an IPO where ownership of a company passes from a handful of private investors to a broad base of public ones.

That can depress prices for a while, he says, but is long-term bullish because “concentration is fragile [and] distribution is antifragile.”

Each bitcoin that moves from concentrated hands to distributed hands makes the network more resilient. 

“The OG whales are having their liquidity event,” he writes — including one “Satoshi-era holder that recently sold $9 billion of bitcoin through Galaxy. 

“And what they’re leaving behind,” he concludes, “is a Bitcoin that’s stronger, more distributed and more resilient than the one they accumulated.”

Crypto Mom advice

This week’s “blue wave” of election results is a reminder that the free pass the crypto industry is currently enjoying might expire in approximately three years.

"Use this time to build things that are valuable, that are good, that meet the needs of your fellow Americans, people across the world,” Crypto Mom Hester Peirce has advised. 

In addition to, you know, just being the right thing to do, it’s also how the industry can insulate itself from politics.

“Build real things with real value for society," Peirce concludes, “because that’s the best way to make sure that good crypto regulation will last from administration to administration.”

— Byron Gilliam

_{Brought to you by:}

Institutional staking has rapidly matured into a sophisticated global market.

Blockdaemon’s new report with Blockworks Research breaks down everything you need to know from the yield opportunities and tech under the hood to the state of adoption and compliance implications.

Markets are red and all eyes are on Bitcoin.

Tune into this Blockworks Roundtable to hear from leading voices in the market on their 2026 outlook.