Silicon Valley deftly answers two frequently asked questions about Bitcoin

Spoilers ahead for the penultimate episode of Silicon Valley.

In the latest season of Silicon Valley, startup Pied Piper braves all kinds of obstacles, from an aggressive pizza company trying to steal their coders to contending with their archnemesis Hooli’s Galvin Belson (played by Matt Ross). In last night’s episode, it addresses one of the most salient issues of the tech world: Bitcoin. In the process, it explains two commonly confusing aspects about cryptocurrency: why are people obsessed with Bitcoin and why aren’t more people getting rich off it?

Bitcoin enters the picture when Richard Hendricks (Thomas Middleditch) and Bertram Gilfoyle (Martin Starr) create a plan to launch their own cryptocurrency in hopes of making a quick buck. They’re fully immersed in the cryptocurrency craze, believing that it will raise enough capital to eliminate their need to rely on a venture capital firm, and also look good for their brand image to build a decentralized internet funded by decentralized money.

If this show followed the pattern of previous seasons, they would’ve lucked out and found millions of dollars in funding, similar to the messaging app Telegram raising $1.7 billion in private rounds of investment in its digital tokens, or the Winklevoss twins who invested in Bitcoin back in 2013 and are now billionaires. Had the show gone down that route, it would have invested even further in the popular fantasies around speculative virtual tokens as quick routes to fast cash. Instead, the show cuts to the PiedPiperCoin’s launch price at a tragic $0.07 per token, and the disappointed faces of the entire company. “Richard, adversity is a great teacher,” says Jared (Zach Woods), consolingly, “Just like cigarette burns.”

The scene cut effectively brings the show crashing down into the harsh reality of cryptocurrency; nearly half of initial coin offerings launched in 2017 failed by February. It’s by no means easy to get rich in an industry filled with countless unpredictable problems including hacks, schemes, high transaction fees, and regulatory scrutiny. Rather than feeding the hype, the show does a solid job of depicting what a volatile and wild route launching an ICO can be for a tech startup. In one scene, Monica (Amanda Crew) warns Richard against hopping on the Bitcoin bandwagon, by saying, “Before you walk away from stability and gamble your entire company on crypto, there’s another friend of yours I think you should talk to.” Monica points to Russ Hanneman (Chris Diamantopoulos), a flashy billionaire who has always made questionable business decisions, as a prime example of what not to do.

We learn that of the 36 ICOs that Hanneman launched, only one has actually earned him back all the money he’s blown. Unfortunately, his maid threw away the keys to the money, which were stored on a thumb drive, so he’s combing through a giant pile of garbage to find it. To illustrate how desperate his situation is, his worker finds him a real thumb and not a thumb drive.


It’s a ridiculous sequence of events, but it’s exactly the sort of inanity that makes Silicon Valley beloved among tech enthusiasts. In a culture where more and more people have begun mining cryptocurrency using their own mining rig setups or invested into exchanges in hopes of making a quick buck, it’s refreshing to see Silicon Valley avoid the trap of blindly promoting these digital coins that can sometimes blow up in investors’ faces. Likewise, it would be unfair to paint all cryptocurrency-related companies as shady businesses, and the show’s not quite saying that either. Even the SEC chairman Jay Clayton, who leads a lot of the regulatory scrutiny against the currency, has admitted that the technology behind cryptocurrency holds “incredible promise” for the financial industry.

Cryptocurrency is not a black and white issue, and despite often being more of a soap opera than a real depiction of tech issues this season, Silicon Valley manages a nuanced and balanced approach to covering this complex topic. It’s a rare and needed viewpoint in a sphere where many people are eagerly promoting one ICO or another, while notable public figures like Warren Buffett have advised people to stay from it altogether. Since it’s new technology, staying away forever doesn’t seem like good advice, but neither is investing without reading all the fine print and keeping vigilant against fraud. Instead, it is better understood as a field that requires a lot of intelligent thought or dumb blind luck to profit in.


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Copyright or Author: Shannon Liao
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Source Link: https://www.theverge.com/2018/5/7/17317076/silicon-valley-hbo-season-5-bitcoin

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