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You couldn’t miss it if you tried. From YouTube adverts starring celebrity comedians to incessant news stories touting another broken price record, “it” was cryptocurrency, a movement taking the world by storm in 2021 and 2022. Largely born out of libertarian currents in the wake of the last financial crisis and limited in scope to Internet subcommunities for years, crypto had finally entered into the mainstream.
Harvard was not immune from this explosion of enthusiasm. On campus, the first-ever undergraduate organization focused on blockchain was founded, while internships and offers of employment at cryptocurrency firms became ubiquitous and irresistible.
Though the highs of 2021 have mostly subsided and the allure of a blockchain future has been greatly diminished by scandals such as the spectacular collapses of the LUNA “stablecoin” network and the FTX cryptocurrency exchange, it still remains unclear why crypto, a technology more than a decade old, was only able to have its moment in the sun over the past couple of years.
The classic answer given by pundits has been “easy money,” the notion that rock-bottom interest rates set by the Federal Reserve had made it far too tempting for deep-pocketed investors to go all in on moonshot ideas like upending the global monetary system. There may certainly be some truth to that, but it can’t explain how crypto captured the popular imagination, not to mention sovereign governments — how it was able to persuade a solid fifth of Americans and millions of others around the world, spanning across class and cultural boundaries, to risk their financial well-being for the sake of something new.
This question was somewhere in the back of my mind as I was strolling through the Harvard Art Museums toward the end of the fall semester. Having long been a nerdy numismatist, I soon found myself (again) on the third floor, gawking at the Roman coin collection, which boasts selections from the Late Republican era (1st century BCE) to the Late Antique (3rd-5th centuries BCE).
The temporal diversity of the collection makes it easy to spot clear compositional differences between coins cast at the opposite ends of the Pax Romana. And while it might not be fair to assume so at first glance, the quality of the coins differ significantly too. By and large, Roman coins, being minted by a central imperial authority, consistently underwent a process of debasement as a smaller and smaller amount of precious metals were used in their manufacture. For instance, whereas the silver denarius was 94 percent pure during the reign of Nero (54 – 68 CE), coins minted by Claudius Victorinus when he ascended to the throne two centuries later in 268 CE were basically junk metal, containing only 0.02 percent of real silver. To many emperors, the logic was simple. Expensive wars required costly expenditures, and what was easier — raising (and collecting) taxes or simply keeping more bullion in the public coffers by reducing how much was spent on currency?
While the thesis that this regular debasement over centuries contributed to the ultimate downfall of the Roman state is hotly debated, the notion that the practice was common knowledge among the populus Romanus is more widely acknowledged. Salaries provided to regular soldiers steadily increased as coin purity decreased, while auxiliary forces recruited from “barbarian” forces increasingly demanded their pay in pure gold form. The once-unquestioned authority of the Roman state to control the mediums of exchange in its sphere of influence was gradually shredded to tatters.
Among the many parallels that politicians and thinkers so often draw between the Roman world and ours, especially with respect to the dominating nature of American cultural influence, perhaps one that should be heeded with caution is the loss of public trust in the Roman “financial” system and the one that we live with today. While there are certainly very significant differences in their respective architectures — namely that we no longer seek to chain our monetary supply with the availability of precious specie — surely we can compare the qualities of public sentiment.
After all, money still largely serves the same social functions in our world as it did in our forefathers’, and as with any medium of exchange, unanimous agreement about the value of money is absolutely essential to its continued survival. Once collective trust in its worth erodes beyond some critical point, individuals may be incentivized to seek alternatives. While the Romans may have found refuge in the visible constancy of aurum, as many “gold bugs” still do today, crypto seems to be the new, very popular, kid on the block.
Indeed, it doesn’t seem coincidental that a mass media motif that was just as pervasive recently as the rise of cryptocurrency was the imminent threat of inflationary pressures in the United States and globally. Think-tankers lined up to provide their version of how rising prices came to be, with some pointing back to the “easy money” policies of central banks and others blaming everything from the pandemic to the war in Ukraine. What was much less disputed was the effects of inflation on the average psyche, as popular discontent shot upward, fueled by the widely held belief that central authorities were to blame somehow for the newfound crisis.
Framed in these terms, it may be much less of a mystery why cryptocurrency has appealed to so many so recently. It has been, in essence, a passive revolt against establishment institutions, driven by the same kind of sentiment and notions of a “break from the big banks” that drove thousands to Occupy Wall Street more than a decade ago.
Yes, crypto’s fifteen minutes of fame has likely elapsed, but extensive mistrust of the present financial status quo lingers. Public policy must thus be willing to address these eddies of economic disaffection, lest our currency too goes the way of the Romans’.
Alexander Junxiang Chen ’24 is a Neuroscience and Chemistry concentrator in Quincy House. His column “Artifactual” appears on Thursdays.
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