6 Biggest Crypto Conspiracy Theories

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One of the most important goals of crypto is to create a radically free market for goods and services. The most radical proponents of cryptocurrencies want people to be able to buy anything anywhere without anyone interfering. But here’s the catch; the environment that creates this radically free market also creates a radically free market for ideas.

When people think about it, they often think it’s a good thing. After all, how can incredible innovations be achieved without radical freedom of thought? And it’s true, in a way. But the freedom of ideas does not only mean the freedom of good ideas or even sensible ideas. It also means freedom from bad ideas, crazy ideas, and completely unbelievable ideas. This is why the crypto ecosystem has been described as a hotbed of conspiracy theories.

The fact that crypto is a counterculture means it’s the perfect place to plant and believe in conspiracy theories. Cryptocurrencies are also mysterious in themselves, which means that there are many conspiracy theories about them. And here are six of the biggest crypto conspiracy theories.

1. Bitcoin hampered by Blockstream

In the beginning, Bitcoin was a complete protocol and was not split in any way. But as the network expanded and market demand built up on it, the Bitcoin development team began to notice a few things.

The first thing the community noticed was that Bitcoin transacted slowly. The network cannot process more than five to seven transactions per second. Although not a major problem in the early days, it quickly became a huge problem.

There was no way Bitcoin would compete with Visa and MasterCard if it took days for transactions on the network to be approved.

The solution proposed by some to solve this problem was to create a hard fork. This meant that the protocols running the Bitcoin network would change and a fundamentally different network would be created. This new network would be increasingly faster than regular Bitcoin, making it easier to adopt.

However, this proposal created a huge loophole in the crypto ecosystem. A group of Chinese developers, Bitcoin activists, and miners supported Bitcoin, while others favored a smaller block limit for Bitcoin, keeping it at roughly the same speed.

This disagreement turned into a hard fork on the Bitcoin network. The new chain coming from the fork was Bitcoin Cash, and the two communities went their separate ways. Since then, the value of Bitcoin Cash has dropped drastically while the value of Bitcoin has increased dramatically.

According to a few people, Blockstream, one of the biggest companies in the crypto ecosystem, was behind the fork failure. These theorists claim that Blockstream put its weight behind the original Bitcoin network because it didn’t want to create a scalable Bitcoin protocol. Theorists claim that Blockstream did this because it wanted to maintain control over Bitcoin and prevent it from going mainstream.

2. Bitcoin Hindered by Blockstream: Part 2

For some reason, Blockstream is pretty popular fodder for conspiracy theories. This theory does not claim that Blockstream hampered Bitcoin via Bitcoin Cash. Instead, he claims Bitcoin got in his way through the Bitcoin Core, the development team that maintains Bitcoin.

This conspiracy theory holds that MasterCard and a few other companies hijacked Bitcoin’s infrastructure in 2015. It was then that MasterCard led a seed round with Transamerica Ventures, FirstMark Capital, New York Life and Bain Capital to create a company called “Digital Currency Group”. .”

This company went on to found other companies such as Blockstream. The company has also invested in giants such as Coinbase, BitPay, Circle, Chainanalysis, eToro, Fireblocks, Grayscale, Ledger, Parity, Hedera, Shapeshift, Curve and several other companies.

The theory claims that this gave MasterCard pseudo-hegemonic control over Bitcoin and hindered it. This was done by creating an unpleasant user experience and skillfully executed downtime in the ecosystem.

According to this theory, MasterCard did this both to take advantage of crypto insufficiency and to ensure that the blockchain never became a global payments system.

3. Bitcoin is controlled by the deep state

While some people believe that Bitcoin is beyond state control, others believe the opposite. They believe Bitcoin is under state control and the government even created it.

Around 2013, a website appeared claiming that the CIA had created Bitcoin. The website, CiaProject.org (which no longer exists), suggested that the CIA essentially created Bitcoin and cryptocurrencies as tools to move illegal funds.

The mystery behind the creation of Bitcoin also lends credence to this theory. No one knows who Satoshi Nakamoto is, and no one has ever come close to discovering the first clue to his identity.

According to conspiracy theorists, four pieces of evidence link Bitcoin to the CIA. The first is that the name Satoshi Nakamoto basically translates to Central Intelligence. The second is how careful Satoshi was with his identity. They say it proves he had extensive intelligence training.

The third is that Satoshi Nakamoto is likely to be more than one person. Therefore, it is believed to be a pseudonym used by a group like the CIA. The last is that Bitcoin Talk, a forum Satoshi regularly posts on, censors say Bitcoin is a CIA project.

But all of this “evidence” can be explained by Occam’s Razor, a mental model that assumes the simplest explanation is often the truth.

First of all, Satoshi Nakamoto is a fairly common Japanese name. Second, you don’t need to have extensive intelligence training to stay anonymous online.

Third, not all anonymous identities are managed by multiple people, even if said identity is prodigious. After all, prodigies exist in real life and aren’t usually four people hidden in a trench coat.

And the last statement is false. Bitcoin Talk censors discussions, but some discussion of CIA sponsorship of Bitcoin still exists.

4. The government will seize all bitcoins

This conspiracy theory is fairly new, but that doesn’t mean it isn’t important. In early 2022, the author of the bestselling Rich Dad, Poor Dad, Robert Kiyosaki, made a chilling prediction on Twitter.

He predicted that the government would go wrong and seize everyone’s bitcoin through legal proceedings. He also said Joe Biden was a communist.

As expected, his tweet was met with mockery and contempt from the crypto community. A response from @AutismCapital was: “You are disturbed. You should spend more time with your Poor Daddy, he’s probably more grounded.”

But that wasn’t Kiyosaki’s only strange tweet that day. Just six hours earlier, he had tweeted that people should “stay off the stock market, build their own assets, use dollar debt, save G, S, BC, guns.” Before saying this, he predicted that the world was entering a “possible depression with hyperinflation”.

Kiyosaki is not the first person to be afraid of the government stepping in to seize Bitcoin. But that’s the beauty of bitcoin and the blockchain. If users keep their private keys safe, it is almost impossible to enter them. The only way for the government to seize bitcoins would be to kidnap citizens en masse and interrogate them.

Fortunately, this is an impossible demand for even the most repressive governments.

Cryptocurrencies have always been linked to a new world. However, some things have caused the conspiracy theory to take on new life and become mainstream.

In 2018, Danish company BiChip released an update to its subcutaneous chip, which allows people to store the XRP token in their body. For many people, it was just neat technology. But for others, it was just the proof they needed to realize that crypto was a vehicle for the Antichrist.

Religious people in particular were quick to argue that allowing people to store money in their bodies was a sign of the antichrist. According to the New Testament, the antichrist will create a new world order. This world order would be characterized by people having a mark upon themselves called the mark of the beast. People who do not have this mark will not be able to trade or even own money.

For some conspiracy theorists, XRP’s development of a chip that allows people to store money on their bodies was just the first step.

This one isn’t quite a conspiracy theory, as it turned out to be true. When Tether started releasing USD stablecoins, the company claimed that it had reserves that protected all of its coins. But that turned out to be wrong.

In 2019, Tether had to reveal that its coins were not 100% backed by dollar reserves. Instead, they were only 74% backed by dollars and short-term securities. When Tether was forced to make this disclosure in court, the company had to change its claim on its website that it had reserves for every USDT in the market.

But that was in 2019. Tether now claims that it can back every USDT in the market with its reserves. However, this is a hard claim to believe, as they have said the same thing before and been found out.

Conspiracy theories can be implausible, but if they’re true (like with Tether), it’s important to know what they are. While this knowledge might not change your investing behavior, these theories could still be key to understanding the crypto landscape.

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