Jackson Palmer, the Australian co-creator of Dogecoin, hasn't had much of an online presence for years since decrying his own creation as being an example of everything wrong with cryptocurrency as it first soared in value. On Wednesday night, he returned with a Twitter thread in which he called cryptocurrency a hyper-capitalist technology that benefits the wealthy and helps them dodge taxes. It quickly went viral.
“I am often asked if I will ‘return to cryptocurrency’ or begin regularly sharing my thoughts on the topic again. My answer is a wholehearted ‘no’, but to avoid repeating myself I figure it might be worthwhile briefly explaining why here,” Palmer said in a tweet. “After years of studying it, I believe that cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity.”
As of this writing, Dogecoin’s market cap (a snapshot value of all tokens in circulation) is in the tens of billions of dollars. It was never meant to get that high; Palmer created it as a joke. He’s an entrepreneur and technologist who had been active in the cryptocurrency space for years before co-inventing the coin. When its valuation hit $2 billion in 2018, he knew something was wrong and explained his thinking in an essay for Motherboard.
“In 2013, the vision for the future of cryptocurrencies seemed relatively clear,” he wrote. “To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt…however, as I quickly learned, a passionate community of people throwing around money is like blood in the water to the shark-like scammers and opportunists who, in late 2014, co-opted the Dogecoin community and fleeced its members for millions of dollars.”
Palmer wrote at the time, "I can’t concede that it’s game over for cryptocurrencies." That seems to have changed.
Palmer’s critique of cryptocurrency comes at a time when cryptocurrency enthusiasts are both attempting to legitimize the industry and facing a number of high profile scandals. Hedge funds are managing Bitcoin and Ethereum trusts. The gaming and influencer collective FaZe Clan recently suspended members for promoting an alleged pump-and-dump crypto scam that posed as a children’s charity. Meanwhile, fortunes are being made and lost in a largely unregulated market where new coins, often with anonymous founders, pop up daily and promise buyers riches via complicated schemes.
Palmer's critique of cryptocurrency being a fundamentally right-wing response to the current money system jibes with much criticism over the years that has argued the same. The return of a once-outspoken creator of what is now a flagrantly profit-oriented cryptocurrency whose biggest promoter is the richest person on Earth to denounce the whole enterprise completely is a powerful validation of that line of thinking.
“Cryptocurrency is like taking the worst parts of today's capitalist system (eg. corruption, fraud, inequality) and using software to technically limit the use of interventions (eg. audits, regulation, taxation) which serve as protections or safety nets for the average person,” Palmer said in his thread. “I simply no longer go out of my way to engage in public discussion regarding cryptocurrency. It doesn't align with my politics or belief system, and I don't have the energy to try and discuss that with those unwilling to engage in a grounded conversation.”
When Motherboard reached Palmer for comment, he said that he would prefer to let his tweets speak for themselves.