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Real-time self-government in the cryptocurrency frontier: The NEM populists' inevitable end, sealed with ancient Athenian words

By Daniel M. Ryan
web posted September 15, 2014

Back On The Bullet-Train Track…

By February 24th, 2014, UtopianFuture was becoming quite comfortable with exercising the kind of leadership that NEM's economic populists loved. In his continual denial of 2Kewl4Skewl's claim that he was entitled to his stake, in response to the latter's continual insistence that a stake was his by right, even the hint of the leader's earlier promise of "no retroactive changes" was gone. Instead, he used an ironically libertarian-sounding defense of his new leadership: "I can decide who I associate with. A private association/ community can decide what kind of member is accepted within the association/ community."

Of course this was said in some heat in the midst of an argument where 2Kewl4Skewl was both insistent and outspoken, but it was a clear message to the populists that "no retroactive changes" had been flushed down the port-o-potty. It was also a message to the more passionate NEM community that they had a new kick-toy – albeit one with enough gumption to give as good as he got - to rally around. Here he was, right in their main discussion thread: Mr. Naysayer. Mr. Community-Wrecker. Mr. Anti-NEM. Mr. Troll. Mr. Nxt. Mr. Hypocrite.

Mr. Plutocrat.

Inevitably, perhaps, one more scrupulous Nemster tried to justify the retroactive revocation by posting that NEM itself was different from the NEM that 2Kewl4Skewl had signed up for. By so doing, Xpedite was implicitly claiming that the terms of the deal had already been changed, and implicitly suggesting that retroactive boot-outs – at least in the case of obstreperous stake-holders - were perfectly legitimate:

Just some thoughts I would like to share with everyone:

NEM started out as a project with the intention to clone NXT code. The only difference would be the distribution model.

Back then 2Kool4Skewl posted "very interested".  [It was actually "Super interested!", as documented in the prior part, but this version's close enough – your humble fact-checker.]

After a while it turns out that NEM is evolving in something more innovative with PON (and later POI [Proof of Importance]) and several other ideas being pitched resulting in someting that some people see as innovative.

After this it became apparent that a lot of people are getting excited about NEM. Several people adopted the NEM signature and it showed this whole concept was gaining momentum. This must have been something that was apparent in other BTT threads where those signatures were suddenly emerging.

Just by reading the posts in this thread you could feel the positive energy.

At this exact time, apparently someone changed his mind about NEM.

Contrary to being "very interested "in a true clone (programatically) 2Kool4Skewl became "very skeptic" [As noted earlier, this is not a real quote of 2Kool4Skewl, but it was close enough]; warning people that NEM was a waste of NXT!

At the time he posted very interested:

-NEM would be a NXT clone (but with a different distribution)

-It was already known that NXT/BTC would be raised until 3000-4000 stakeholders took part.

Now ask yourself these questions:

How can someone who is very interested in an NXT clone, suddenly change his mind when the same thing starts to evolve in something that is no longer a copy of NXT ?

Why would this person suddenly feel the need to warn others that this project is not innovative while he was interested in an NXT clone at first?

Feel free to add to this list of questions according to your taste, dear reader.

…As The Hemlock-Brandishing Comes To An Abrupt End

Given the drama that had unfolded, the ending was indeed anticlimactic – almost weirdly so. UtopianFuture made no decision announcement, nor is there any evidence that he wrote 2Kewl4Skool a personal message informing him of the decision. Everyone on the thread, including 2Kewl4Skool himself, had to find out from one of UtopianFuture's major-domos calling attention to it in this post made early morn Greenwich Mean Time of February 25th, 2014:

You've had your stake back since the list was released. You're so busy trolling that you didn't even notice.

Maybe now that your [butt] doesn't hurt so much anymore you can start being a productive member of NEM ?

What an odd way, after an all-out town-meeting trial and an escalating clash of words, for the former target of the populists' wrath to find out that UtopianFuture had reversed his decision and restored his now-ex-comrade's stake. Even 2Kewl4Skool himself was bizarrely conciliatory when he realized that he had prevailed:

I was simply looking out for everyone that gave Nxt or Btc to the dev fund. 

When I received my stake, no one had to pay.  At that point, if Nem wasn't fairly distributed and had no code, no one lost anything.  Later when UtopianFuture started collecting Nxt and Btc, people were at risk of losing their money.  I've seen the Visacoin, Shares, Aero, etc scams and I know how eager people are to get a stake in the next Nxt.  I don't think it is ethical to sell people on promises with little actual work.  Writing Nem from scratch is easier said than done.  People might say that I'm bashing Nem so they invest in Nxt, but the fact is that Nxt is being actively developed.  If I had to pay Nxt to get Nem, I would just keep my Nxt, but everyone has the right to make their own decision.

But not bizarre enough to stick to his guns and say that he had been on the side of right all along.

Strikingly, the heat and fury that had boiled over so recognizably had vanished. Almost immediately there was a call to the NEM community to put the 2Kewl4Skewl matter behind and move on. Almost unbelievably, yet very definitely, that request was loudly seconded by none other than the town-hall-trial-by-poll prosecutor himself:

Now everybody talking about this 2kool4skewl stuff should stop. Decision has been made by the community and Utopian to keep him on board. Everyone should keep their opinions to themselves and let this thread be open for other stuff. I wont post another word about this debate since the decision has been made.

It is time to move forward from the negative debating, constant in this thread, to a positive discussion about how can we all contribute to bringing NEM forward.

All interested in participating can look at our promotion trello board…. and see if there is something that (s)he can contribute to. If you have good suggestions feel free to ask Utopianfuture to add you to the trello board!

Forward!

And move forward they did. The populists were satisfied by UtopianFuture breaking his earlier promise to their benefit. The fanbois proceeded along in their usual irrepressible way. The NEM community was united, and continued to march forward. It wasn't long before 2Kewl4Skewl went from the Number One Foe Of Nemmer to a mere answer to a trivia question. On the surface, NEM was humming along in strong and true fidelity to the "No Envy Movement" motto – now that the removal of multiple-account sockpuppets would be implemented with due scrupulousness. On the surface, it looked like NEM was destined to be a taint-free force to be reckoned with in the altcoin world.

As for 2Kewl4Skewl, he went back to his knitting and posted primarily on the main Nxt discussion thread: the one that he himself started and closed after it had reached a then-record length of 2,672 pages. He didn't post anything at all on NEM until a week after he closed Nxt's monster thread with the instruction to move the discussion to Nxt's main forum. Inevitably, he returned to the same position that he had put forth so strenuously in late February, but it was only an afterglow-like flicker of statement and resultant hostility. The closest he came to the same old outspokenness was in a thread about"What Best Coin To Invest?". In response to someone who recommended NEM, he posted this:

Probably not.

Nem is vaporware and has no distinct advantage over NXT.  Nem's "innovative" features like PoI [Proof of Importance] are unfeasible.

I don't get why people who are really interested in NXT's feature set purchase a clone.  They should just buy NXT.

And those were his final words about NEM on Bitcointalk. With the sole exception of posting a sarcastic joke meme in response to a ludicrously adulatory claim about UtopianFuture, he never mentioned NEM on Bitcointalk again. He was banned from Bitcointalk on April 26th.

By that time, the NEM tech team were well on their way to fulfilling their promise to code NEM from scratch. In due course, the NEM stakeholder list was indeed purged of holders deemed sockpuppets under the new rules. And due allowance was made for a public review of the purge; ample time was allocated for any of the purgees to show that they had been purged unfairly or mistakenly. Some of those objectors were in fact restored after due review.

After the list had been properly purged, UtopianFuture made the decision – as prompted by requests from his community - to release stakes to their respective stakeholders even though NEM was not ready to launch. He did so to allow stakeholders to sell their stakes, wholly or in tenths, on  Nxt's Asset Exchange. He authorized 1,000 stakes' worth of NEM – representing one billion NEM, or one-quarter of the total – to be listed there. That thousand-stake tranche was issued on May 30th, 2014, and each one of the thousand was dutifully and diligently transferred to each qualified stakeholder.

As an event, it was one of the high points of NEM's history and of the history of the Nxt Asset Exchange. Even to this day, the NEMStake Asset is close to being the top-traded asset on Nxt's AE; earlier, it was the top by far. And for those patient, engaged and loyal NEM stakeholders who got accepted to trade off their stake, their patient wait over three to four months had proved to be quite lucrative. Early trading on May 30th zeroed in on a price for a full stake of approximately 50,000 Nxt. On that full day, the price of Nxt rose from 0.0000804 to 0.0000835 Bitcoins per Nxt. A fortunate seller of his or her full stake for about 50,000 Nxt, who later sold the proceeds for Bitcoin, wound up with more than four full Bitcoins. Had he or she then sold the Bitcoin into its short-term rally, he or she would have wound up with about US$2,300.

The excitement rocked the altcoin world and galvanized the Nxt market. The listing actually did have a hand in re-energizing Nxt's late-spring bull market rally, which topped out on June 5th. In part because of NEMstake, Nxt locked in a rare achievement in altcoin land: an all-time high in Bitcoin terms that was actually above its get-rich-suddenly Boom Town peak.

It was a galvanizing moment – and a wistful reprise of UtopianFuture's original vision of Nxt and his NEM marching side by side: collegial chums and comrades in innovation, striding towards the second-generation altcoin future. Squabble-free collegiality was a pillar of his original "No Envy Movement:" as the first part of this real-life drama in the cryptocurrency frontier documents in detail, he was very serious about this.

But the wistful echo was no more than that. One of his conditions for redeeming a NEMStake Asset for NEM, which was scheduled for two weeks after the still-yet-to-arrive official launch of NEM, made it very clear that he was fully in tune with the new populist policy:

Additional conversion condition: A maximum of 2 NEMstake tokens will be allowed to convert to NEM per one NXT account (with one unique NEM receiving account). That means if one account sends more than 2 NEMstake tokens back to the issuer account for NEM, he will receive the cap for that account of 2 million NEM. This hopefully will partly discourage an early concentration of NEM in a few accounts.

Of all the nine requirements in his original NEMStake announcement post, it was the only one bolded. Yes, he was very clear that there would be no return to the old ways of NEM. They were outmoded, obsolete, fit only for reactionaries, and fully consigned to the dustbin of Bitcointalk's archives. After being moulded by his populists, he was very serious about this.

The Leader's Strengths…

It must be seriously said that UtopianFuture's overall leadership of the NEM he founded was top-notch. He did secure a talented and careful tech team, plus a lot of volunteers to pitch in with ecosystem development. It's a matter of record that he had a real flair, even a kind of genius, for shepherding his community and keeping NEM moving forward.

In retrospect, his time in the Nxt world as a fiercely loyal bulldog, community-builder and organizer of the bounty side proved to be an apprenticeship for leading a movement and an altcoin that is destined to be one of the heavyweights in the alternate cryptocurrency world. NEM will almost certainly never reach the market cap enjoyed by Nxt, but it almost certainly will be the second-place second-generation cryptocurrency in market-cap terms. Although it's still in open-testing alpha stage at the time of this writing, it's well on track to full release. Eight months isn't very long for a coded-from-scratch alt to move from engaging dream to open-test alpha. When NEM is finally ready for full release, its technical infrastructure – almost unprecedentedly for a follower alt – will fully hold its own vis-à-vis Nxt. Its Proof-of-Importance network-securing algorithm, which is actually based on Sergey Brin and Larry Page's PageRank, is one of the few altcoin innovations that's innovative on a deep level. 2Kewl4Skool may prove to be right about its vulnerabilities, but only time and field-testing will tell.

There's very little reason to wonder why CoinsSource, the top-flight altcoin analysis service, gave the New Economy Movement a lot of solid praise in its review. In my opinion, that praise is well deserved.

But, as I noted in the first part, UtopianFuture had a little secret. He also, as his altcoin-land-shaking project was on the way to fruition, returned to his old habit of bulldogging. Had he renounced it, his little secret would have never been discovered.

…And A Minor Little Dust-Up…

In late afternoon Eastern Time of June 8th, 2014, UtopianFuture  announced on his official discussion thread that the open-alpha testing phase was scheduled to commence on June 25th.  This announcement brought him the lavish praise and wide applause that he was becoming accustomed to from his community.

In contrast to that milestone post, the post just before it was peripheral and a little odd:

if anyone has invested in "simcoin" you should read  this thread, and make of it what you will...   

That thread, started by the same fellow, claimed that Simcoin was suspect on the grounds that the developer had a self-moderated announcement thread and was of the habit of deleting posts that he considered trollish, abusive or a waste of reading time. This same fellow quoted above said that, in his own opinion, the Simcoin developer's moderation policy "SCREAMS scam!" But, in harmony with cryptocurrency's ethos of decentralization, he gamely invited everyone else to make up his or her own mind.

The rest of the thread, including quite a few additional posts by the original poster, revealed that NxtChg's habit of deleting posts he considered detrimental to his thread had created a kaffeeklatsch of disgruntled critics, all relying on the dark surmises that had become more common on Bitcointalk as IPO scam followed IPO scam. Even though I think they're wrong, I have to point out that the proliferation of scams makes their accusations understandable in the abstract. The trouble is, the proliferation of accusations makes it understandable in the concrete why NxtChg made a point of deleting them on his thread.

In fact, by the Canadian system of law, most of those deleted "scam warning" posts would be actionably defamatory. Had a group of posters bulldogged in a similar way against a penny stock at Stockhouse's BullBoards, and had top management of that penny got wind of them, it would only be a matter of time before Stockhouse management received a court order and disgorged what they knew of the real identities of those posters. Forthwith, with Stockhouse's disgorgement in hand, management of the bedeviled penny would file a nice big defamation lawsuit and unambiguously win. The verdict would be akin to the outcome of this fellow's defamation suit.

But of course, those posts were made in the central meeting place of the altcoin jungle - where pseudonymity is the norm and even true anonymity is part of the mainstream. The altcoin jungle, where some denizens have evinced real shrewdness in loophole-finding and even jurisdiction-shopping. Even if a fair number of them are stuck at the level of playing lawyer on the Internet, none of them seem to have had any cold-water trial outcomes splashed on their faces.

Fast forward three days, to June 11th. On the NEM discussion thread, the optimism, good feeling, volunteering, big plans, big dreams, excited predictions about its future price, continued in good form. Over at NxtChg's Simcoin thread, a Bitcointalk user named "ghosthouse" popped in and left this message

I still remember your exchange with its pathetic fixed 6 digit number password and no automaton whatsoever (after months of running). You didn't have anything significant or useful to contribute to Nxt source-code discussion which last for months . The Reed Solomon format is done first by Ricot, then you made a small improvement and claimed your own. Is that about the summary of all you have done ?

Well an anonymous dev. does not have a track record but you have and it is nothing of significance except some prolonged debates with jl777 and everyone else in Nxt land.

Now I will re-post this every 2 hour as long as this thread open so your "investors" can know that the most notable thing about you is not about coding or math skill (average at best - (who built an exchange with a pathetic fixed 6 digit number password ???) but the idiotic ego and the likely intention to scam (you yourself know full well that you don't have the skill but still take in close to 200 BTC).

Now delete this post but remember this post will never go away because it is the truth.

Delete it, NxtChg did – but not after rebutting the part that impugned his earlier exchange:

I kindly ask you to stay away from this topic. Otherwise you will be reported.

You're an idiot and idiots are not welcomed here.

The password was 8 mixed-case characters + digits. That's 218,340,105,584,896 combinations.

If that password is pathetic - go and bruteforce it over the network, moron.

And as threatened, ghosthouse reposted essentially the same post twice.

This ghosthouse was a rather unusual kind of Bitcointalk user to do this. The account was created on January 31st, posted a little in early February, and then had barely posted at all until he reappeared on NxtChg's thread that June 11th. To Bitcointalk users in the know, that posting pattern said that ghosthouse was a sockpuppet account for a more regular user.

A second, more normal, sockpuppet soon appeared in the thread: a new account with the name ghosthousevsNxtChg. A newly-created pen name, for an obvious purpose. As the few posts of ghosthousevsNxtChg made clear, this new pen name was a sockpuppet for ghosthouse: they continued in the same vein.

The last post by this fellow was yet another continuation of the bulldogging of NxtChg, but this time the username was a different, much more active account.

Sockpuppeting is officially allowed by the Bitcointalk moderators, and is more-or-less tolerated by Bitcointalk users. Many users have only one account, like me, but many have more than one. Some of the latter use their sockpuppets for sneaky stuff, but others use them for innocuous purposes like different pen names for different kinds of writing. In the case of ghosthouse, although his posts are long deleted from Bitcointalk, this account had been used to get a NEM stake early on and then post around a little. As later reconstruction proved, ghosthouse's real owner had definitely been allocated a NEM stake as well. After the sockpuppet-scotching taint analysis had been completed, ghosthouse had remained on the list. Perhaps his name was still there because of a remnant of Utopian Future's first policy of allowing multiple stakes, which he had clung to with some tenacity in early February before finally yielding to the populists in his community. Perhaps ghosthouse still being there was UtopianFuture's way of convincing himself that he did not bend at all.

Or perhaps, there was another reason. In fact, there was another reason.

…Combined With A Careless Little Slip-Up…

At dawn Eastern time June 12th, 2014, on the NEM discussion thread, the first post of page 502 contained a mock-up of NEM's planned wallet, followed by a question to UtopianFuture that was somewhat tongue-in-cheek. Just the dawn of another exciting day in the New Economy Movement.

But as morning was approaching noon, a loyal Nemster named TwinWinNerD broke the happy flow by asking an odd question of UtopianFuture:

Sorry for asking!

But UP can you confirm/deny that you are the guy that is constantly posting in SIM thread? [this example post supplied]

Sure seems so ...

This post was followed several minutes later by a public complaint by NxtChg himself, ending with his characteristic acerbic but irreverent humour:

Let me tell you a story.

Recently a stupid and abusive user "ghosthouse" started to post in my Simcoin topic. After I've deleted his post he made it his mission to keep re-posting it, even though it's a bannable offence, according to [Bitcointalk moderator] theymos.

He even created "ghosthousevsNxtChg" account specifically for that purpose.

This is the level of intelligence of that user:

FACTUAL CORRECTION : he use 8 fixed digit not 6. Congrat your record has improved by 30%.

So he thinks that increasing a password by 2 digits makes it only 30% stronger, than in reality it makes it 3,844 times stronger = 384,400%. Hm.

Today that user forgot to logout from his primary account. utopianfuture. He quickly realized his mistake and deleted the post, but you can see it here

So, let me get this clear.

A guy, who started his own coin, thinks increasing a 6-character password by two symbols makes it only 30% stronger.

Thinks it's feasible to brute-force a password with 218 trillion combinations over the network.

Thinks 143 BTC is "close to 200".

Uses sockpuppets.

Instead of working, spreads lies, FUD and keeps re-posting stupid and insulting posts into another coin's thread.

Do you feel like selling yet? [Wink] Nice leader you've got there.

Well, he keeps posting into my topic, why can't I post here. Thought you guys should know.

As you might have gathered, dear reader, NxtChg was not the only one who was ticked off by certain NEMsters bulldogging around on Bitcointalk's Alternative Cryptocurrencies board. Indeed, he had lots of company – as the whole board was about to find out.

But at that stage, he presented himself as seeming to think that he was alone in being badgered - and that the only problem with UtopianFuture was that the latter was abusive and kinda not so good with relevant math.

…Merge Into A Time Bomb…

Needless to say, NxtChg's complaint was met by several scoffs from members of the seemingly untouchable NEM community. Many of them took the opportunity to bulldog NxtChg and Simcoin themselves. But one worried Nemster, Secondleo, commented: "Wow, I'm pretty interested if that really plays out like the PR-Nightmare it looks like."

Soon, UtopianFuture himself posted. By this time, he was comfortable with his repute as a true man of principle as well as a very effective leader. The Picture of UtopianFuture was of a true practical idealist: a man of iron and inflexible principle who also got the job done. He admitted that ghosthouse and the new account were his sockpuppets, but in a matter-of-fact way intended to allay Secondleo's concerns:

I don't think so. Here is what I posted in the thread "If you think you can damage NEM because of this you are wrong. NEM is not about me. Everyone knows i don't write a single line of code. I chose not to use my usual nickname exactly because of it is not related to NEM. It is my personal opinion." and it was deleted instantly in 20 seconds.

His breeziness was picked up by ownerbest with this response:

In my opinion, you should keep working on nem, other coins are other coins, no need to do re-posting things. [I.e., bulldogging – your humble fact maniac.] Especially you are the leader of NEM, just let it go, seriously.

Currently, NEM is the winner, this is obvious, so just keep working on it.

To resort to our culture's common stereotype, it's as if a nationwide-famous social conservative Crusader for Morals were revealed to have a penchant for taking day trips to a big city he ostensibly did not visit - under an assumed name. He issues a breezy press release confirming that it was him and that he liked to fly in for the day because he needed some breaks from his grueling schedule in the line of uplifting morals. The reason for his assumed name was, he wanted to get away from it all and enjoy some privacy for a time.

I'm sure, dear reader, that you would find this dismissive explanation to be dubious even if you support the work of real-life social conservatives. Sure enough, the Nemsters were not that impressed. And surely enough, UtopianFuture's confident response got one Nemster – the same one who had posted a picture of the soon-to-be NEM wallet with a somewhat salty question – seeing that it was the moment to do a little digging.

…That Explodes Into Scandal

Here's what he found:

ok so this are two of utopianfuture bitcointalk accounts: ghosthouse and ghosthousevsNxtChg

u can [still] see all his posts here on the bitcointalk mirror(he already deleted them in the acc here)

1 https://bitcointa.lk/members/ghosthouse.230958/

2 https://bitcointa.lk/members/ghosthousevsnxtchg.338713/...

Quote from: ghosthouse=utopianfuture

Requested a token. Not selling more than 0.2 though. It is nice to see the thread crowded [Grin] I hope the best for the developers .

Quote from: ghosthouse=utopianfuture

NEM is the best with the distribution concept. Great team too. The next big thing.

Quote from: ghosthouse=utopianfuture

interested. transaction hash is a minute. 0.035 btc sent. [The rest of the post contains a link to his spend – your author.]</quote>

now ghosthouse is suddenly not on the stakeholder list anymore? UP why delete urself so suddenly?:0

how many stake puppets do you have, surely more than 1? 10? 100? [Grin] come on dude dont kid us any longer

Yes, to once again resort to that cultural stereotype, it's as if that press release from that imaginary morals crusader had reached the computer of a cynical investigative reporter who decided to do a little snooping around – and found the morals crusader going into a hotel in the company of a professional underage catamite.

But of course, this stereotype is not truly reflective of what was really dug up. A better analogy would be a Ralph-Nader-type liberal-populist crusader, widely renowned for his honesty and probity, caught snaffling some of his campaign funds for a nice yacht. Unfortunately, this analogy does not rank all that high in the list of well-known political gotchas. Why its prevalence as stereotype is so much lower than the socon stereotype, your humble fact-gatherer will leave to you to decide.

What really happened was that a leader of an altcoin-land-shaking movement, bringing a new kind of economic populism to the cryptocurrency frontier, having a reputation that was almost golden in the land of alternate cryptocurrenies, got caught with his hand in the till. And the most twisted part of the tale – the one most profoundly revealing of the true power of the genie from the lamp of "economic fairness" – is that the only reason he could be deemed to have pilfered was because he had retroactively changed the terms of the sign-up deal. Had he not shown the "leadership" that his populist followers insistently demanded of him, had he found enough spine to stick to his original guns, this soon-to-be-famous revelation would have been just a yawner because it would have fit into his original terms.

But given his real path of Progress, a yawner it most definitely was not. The genie of the lamp of economic populism had clapped its hands and transformed a provable rule-follower at the time into a greedy, self-righteous hypocrite.

And NEM itself was never looked at in quite the same way. As the news spread at lightning speed all through the Alternate Cryptocurrenies board, several new threads popped up about it: almost all of them were denunciatory. For the first time in NEM's history, Nemsters were completely on the defensive. They quickly shifted into high-gear reputation management – barring, of course, the ones who were disillusioned and/or disgusted. That little secret of the leader they had looked up to so much had been exposed and highlighted by a viral-glare spotlight. In altcoin land, it was the Scandal of the Month.

A Scandal of the Month that proved to draw a lot of seething altcoineers, most Nxters, who had had to bear the brunt of economic populists' bulldogging. For them, there was nothing like the smell of hypocrisy in the afternoon. It smelled like…payback.

The Sorrows Of Payback

You probably know that the McCarthy-era "Red Scare" is described in widely-accepted liberal narratives as an "Ordeal by Slander." But what you might not know is that there was not one "Ordeal by Slander" in mid-twentieth-century America, but two. The "Red Scare" was actually the second. The first was the "Brown Scare" of the 1930s and early 1940s. The more-or-less mainstream recountings of the Brown Scare, like this one at what-when-how.com, show a striking symmetry with histories of the McCarthy era written by historians who sympathize with Tail-Gunner Joe. The above-cited fact sheet, to be frank, would be quite symmetrical to William F. Buckley Jr's and L. Brent Bozell's McCarthy And His Enemies had the authors thoroughly updated their book in 1956 after Senator McCarthy fell. Just as the well-documented pro-McCarthy histories go out of their way to demonstrate that Joe's "witch hunt" landed a nice gallery of witches, so does the above-linked recounting make a point that the stated targets of the Brown Scare were some pretty disgusting dudes.

You have to wander off the respective reservations to get a different picture. Poke around the documentings of the Red and Brown Scares from liberals and Old-Right libertarians, respectively, and you'll gather that both Scares were subject to a fair bit of under-the-leadership mission creep. The two Scares had a lot in common process-wise.

Of course, it takes a pesty Canuck like moi to proffer the hypothesis that the later Scare was in part fuelled by the earlier mission creep of the Brown Scare. Even if my proffering is based on a homely hunch, which in other contexts would be accepted as plain common sense.

But in the case of the explosion of denouncement of the now-disgraced UtopianFuture, the central hub of the cryptocurrency world and its mirror offer granular-level riches of real-time documentation. The payback hypothesis is a lot stronger than a knowing hunch backed by peripatetic readings. It's outright provable.

Case in point: our old "Number One Foe Of Nemmer" 2Kewl4Skewl. When he found out about the scandal, he had this to say at the Nxt forum:

What a complete and total joke.

I said it from the beginning NEM isn't fair.  It's not fair because some people got their stake(s? lol) for free and others had to pay for their stake.  Also, there is no way to prevent someone from creating multiple BitcoinTalk accounts and claiming more than one stake.  When I was saying this on the NEM thread months ago, UtopianFuture took my stake away and claimed that I didn't want it.    Here I was being honest and I only claimed one stake, because I believe in doing the RIGHT THING and UtopianFuture tried to take my stake away while he has who knows how many stakes.  Obviously, he wanted me to be quiet because he was in fact doing exactly what I was talking about.

I can't say that I'm surprised though, he took the NEM "New Economic Movement" slogan from my slogan for NXT.

"One of the reasons Nxt is groundbreaking is because it gives the economy back to the people and re-establishes them as their own sovereigns over their destiny.  An economy is an expression of a political ideology.  Do not mistake us as just another cryptocurrency.  We are a movement."

I was going to sell my NEM stake on the AE, but now I'm not because I'm not going to take advantage of someone.

The fact that he "resigned" is a joke too.  You don't seriously believe he isn't still going to be heavily involved under different aliases do you?

NEM's real slogan is "ALL STAKES ARE EQUAL, BUT SOME STAKES ARE MORE EQUAL THAN OTHERS."

And The Inevitable Sacrifice

Yes: after a little foot-dragging, UtopianFuture resigned from the NEM he had created and actively led. In part this was because of the reputation-management scramble coalescing, like miners coalescing around a single blockchain after a chaotic launch of a new Proof-of-Work altcoin, upon what would quickly become the consensus reputation-management narrative: NEM is not UtopianFuture, and UtopianFuture was not NEM. Sure, UtopianFuture proved to not be the man we all thought he was, but that exposure only applies to UtopianFuture as an individual. NEM, driven by the power and energy of the NEM community, is greater than any Nemster however august his position. Consequently, more of this scandal is being made of than it rates. NEM will carry on, stronger than ever.

As a bonus, this stance entailed a corollary that was pleasing to NEM's now-on-the-defensive bulldogs. Saying that UtopianFuture's "self-righteous greedy hypocrisy" impugns NEM…is anti NEM! It's an argument only an ignorant person would advance, and only a Foe of Nemmer would stick to!

Unfortunately for our protagonist in this drama, it had a second corollary. And so, after some quiet time, UtopianFuture on 9:50:45 PM Greenwich Mean Time, June 12th of 2014, posted this announcement:

In this statement will try to address three issues: One is on NEM distributional idea which I don't think many people understand even with many many pages and words have been poured on the issue so far. Secondly, I will address the issue of my personal conduct and the last issue is about what will be the future of NEM and UtopianFuture.

NEM distributional idea is best understood in this summary written in the Development Contract.

"The purpose of the stakeholder community distribution round is to spread the majority of NEM evenly and to many stakeholders as long as the logistics allows. The goal is to build a big and decentralized community that can support NEM's exsitence and operation as a decentralized network"

IMO, the distribution round was a success. We are now having a big and passionate group of developers and helpers that share the same goal and a sense of solidarity. That's very important because they will be shaping the future of NEM with or without me.

The spread of the distribution round was excellent as you can see in the population statistics. The number does not lie and we can show that to any detractors. 

I failed in my personal conduct and not adhere to the rules I set myself. If you are familiar with American politics, now I have the Eliot Spitzer or Anthony Weiner problem.

I had a few sockpuppet accounts but I have no intention of cashing out any of them. I did not write down the sock accounts (using an arbitrary password that I can't remember) neither and plan to donate the fees for the development fund. I created sock accounts to keep the thread at a high demand when we have few supporters. Ghosthouse is the only account I kept using more so that I can use it sometimes to cheer up NEM threads.

It is what it is. I apologize to my core team members, to all NEM supporting developers and helpers for this issue. I will step down from now on.

The task of maintaining NEM stakeholder list will be transfered to Patmast3r. He has been sharing the access to the file with me for quite sometimes. NEMtoken account will be passed to Pastmast3r as well.

NEM Twitter account will be transfered to Makoto and he could pass on to the most suitable person.

NEM development fund accounts will be fully transfered to Jaguar0625, Gimre and Thies1965.

Ournem website will be transfered to the core team as well.

Update and Discussion and Refunds threads will be closed after new threads with similar functions can be made up.

All press contacts will be passed to the core team so that they can find an appropriate person for the job.

I resign from all leading function within NEM and this will be the last post of UtopianFuture.

And two days later, he disappeared from Bitcointalk entirely, never to return as UtopianFuture. The genie he called forth from his fair-distribution lamp had proved to be stronger than what he could control.

The New Economy Movement had devoured its leader and founder.

Very Dead, Very White, Very European, Very Male, Very Nailed-It

Despite evidence that his maleness wasn't the standard model, it's not easy to think of a more representative Dead White European Male than Plato. He lived and died in a time and place where there were no such things as aqueducts and long-distance cobblestone roads, let alone horse carriages and buggy-whips. To the shallower type of liberal, his biographical details mean that he has nothing useful to say about high-technology 21st-century America.

Before I give my own take on the rise and fall of Friedmanite-turned-economic-liberal UtopianFuture, I'll let you examine these ancient, pre-aqueduct, pre-road, spear-and-shield-era words of Plato:

The people have always some champion whom they set over them and nurse into greatness... This and no other is the root from which a tyrant springs, when he first appears he is a protector.  

Please judge for yourself whether these words are outmoded and obsolete, or whether they hit the nail right on the head.

Your humble boatman for your guided tour of this economic-populist underworld is definitely of the latter opinion. Shortly after UtopianFuture discovered Nxt and fell in love with it, he soon revealed a protective side that blossomed with his organizational and leadership skills. In his way, he proved to be a master of old-fashioned 19th-century self-government in the cryptocurrency frontier. He never applied for any leadership position in Nxt; he didn't even ask. Instead, he just started bulldogging and, later, volunteering to organize the meant-for-development bounty accounts. In this, he was a lot like the early Nxters who stepped up and essentially self-organized to form the leadership and development team that hasn't changed all that much from late November 2013 to today. In keeping with old-style self-government, he was somewhat reluctant to be what we think of as a real leader.

When he started NEM, it became clear that he was definitely reluctant. He repeatedly made it clear that he saw himself as a mandatory for the community, although he at first insisted that no change should be made to the set terms of the "social contract." Since he was caught with an extra stake, and given what he became, it's almost obvious to follow the consensus and cast him as man whose own greed turned him into a self-righteous hypocrite with a streak of fanaticism.

A Classic Tragedy…

But in my judgment, this conclusion is not accurate. Naturally, it fits hand-in-glove with his ultimately bested insistence that no retroactive changes will tear up any earlier agreements and divest multiple stakeholders who had followed the initial rules of their stakes. The stick-to-itiveness he showed with this rule is explained perfectly by the greedy-hypocrite conclusion.

But he also showed a similar tenacity in sticking to his Nxt-collegial "No Envy" rule. In fact, he showed the same tenacity. Unless you fancy reach-for-it quick-fix patch-job explanations, his tenacity in sticking to this rule is not explained by greedy hypocrisy.

What we have here is a tragedy, a tragedy that classical-Athenian tragedians would understand quickly. UtopianFuture was a tragic hero. A more-or-less libertarian who admired Milton Friedman, he quickly showed a latent but definite talent in spontaneous-order frontier leadership. As a very loyal Nxter, he easily imbibed the first-adopter characterization of Nxt-bashers as jealous, dog-in-the-manger, thin-disguised greedy, envious left-behinds and losers. The only hint of populism he showed with respect to his beloved Nxt was frustration at first adopters who just counted their winnings and didn't pitch in. As populism, this is about as quasi-libertarian as one can get. Even committed libertarians have to stop and remind others – perhaps remind themselves – that coupon-clippers have a right to clip their coupons in peace. But it's hard to find a libertarian, let alone a Constitutional Conservative, who considers this lifestyle admirable. This kind of middle-class populism is a bare shadow of the liberals' brand. In its way, as noted in the first part of our tale, it's profoundly Lockean.

I don't know what UtopianFuture's real motive was in starting NEM at the time he started it. I probably never will. But the real-time primary sources suggest that the most likely reason was that he saw NEM as a way to co-opt the jealous and the left-behinds by making them first adopters in a new altcoin that would stand tall with Nxt itself. This was no mere pay-off; his demanding side did show in his continual and highly successful exhortations for the stakeholders to pitch in. With this side of him, he was utterly consistent with his earlier Nxt-insider self.

And it has to be said that, as a project founder and leader, he had a real and demonstrated talent. He got the job done, and up to the point of his de facto boot-out he got the job done pretty durned well. He was a natural for frontier leadership. In this sense, he was and is a tragic hero.

But he had a tragic flaw, one magnified by his soon-evident skills as a businessman. He thought he could uncork the bottle of economic "Fairness" and harness the genie that emerged. The tragedy is that the genie – the Spirit of Envy, if you will – proved to be too much for him to handle. Further compounding the tragedy is the fact that his proven talents as a businessman fatally softened his spine.

…With Homely Wisdom For Our Ages

The name of the game in business is to satisfy as many customers as one reasonably can, including customer-stakeholders. If the customers don't like the product mix, a businessperson has to adjust the supply so as to greater match the pattern of demand. This is not a one-time process; demand does change over time. It has to be done recurrently, even continually. A businessperson who fails in this duty sees his or her business fall behind, languish, and even founder.

The business of politics is similar: to make sure to more-or-less satisfy the greatest number of voters one reasonably can. That's why all political figures of note go out of their way to show how reasonable they are. Despite this age being profoundly partisan, all of these politicos represent themselves as wise and sagacious technicians who can combine the best of both sides and adjust the mix this way or that in order to assure a better outcome than what we have now. These wiser and more rational heads promise to make needed adjustments at the margins to make polity, economy and society move closer to that City On A Hill.

The trouble is, these savvy, knowledgeable and action-oriented figures – all of them - issue their stand-up but mostly soothing words over a subterranean volcano. That underground volcano is the most divisive wedge issue of the last eighty years at a minimum. It is the elephant-sized wedge in the political room.

Are you a believer in equality of process or equality of outcome? If the former, you're a market-friendly believer in the modern merit system. If the latter, you're some kind of Progressive. It's Captain-rank obvious that each of our hearts belong to one side or the other: not both. If you seek the evidence, look around. Look around to where and when our oh-so-reasonable political figures are openly passionate and emotional.

The difficulty with being businesslike is that the most passionate customers are inevitably treated as the most representative of the entire customer base. This is never truer than when they are disgruntled. An angry customer is like a tough-talking tough guy. We know that a large majority of that type – likely, north of 90% - are nothing more than classic Internet Tough Guys. But the more-or-less ten percent that are not…

An angry customer is a lot like that tough-guy. A large majority of them, if they complain and badmouth far and wide, will be more-or-less ignored or just sympathized with. But the remaining ten-or-so percent of them can kick-start a public-relations nightmare.

And the ineradicable trouble is that it's all-but impossible to predict which ticked-off customer, or stakeholder, or voter, is the time bomb in the making. Even the top-notch cold-decking tricks eventually come up short.

So a prudent business-minded person has to adjust his or her customer service policy with an eye on pre-empting all public-relations disasters. The everyday-homey part of this tactic is to avoid giving offense except to people whose trade is almost certainly not worth the consequent hassle. But even then, it's just plain prudent to be diplomatic.

Normally, this works well. But in case where the "customers" are motivated by a wedge principle that – in candid and psychologically unclothed moments – unleash great energies, great passions and great hostilities, the business-minded person has no choice but to be as partisan as they are. Even if he has to be nursed into breaking a principle or two along the way.

Now you know what UtopianFuture's tragic flaw was. He thought that he could use his leadership talents, and his own principled character, to essentially co-opt economic jealousy. He thought he could co-opt one of the most eternal hostility-inducing stands of the other side and produce a collegial, sweetness-and-light, almost Kumbayaish "No Envy Movement."

He was wrong, as wrong as anyone else who tries to implement the same folly. The wedge that divides those whose heart is with Equality of Process and those whose heart is with Equality of Result is just too solid, too adamantine, and too eternal for the co-optation approach to be anything other than a folly for the ages – most particularly, for our ages.

And that's why a real cryptocurrency-frontier natural leader– a very effective one – degenerated from a libertarian-like practical idealist into a power-loving demagogue. UtopianFuture was a classical-liberal Dorian Gray.

As I pull up my boat and go to my rest, I gently ask you to mull this over for a while. You might see something new after returning to the wide wide world of politics – or of political history. ESR

Daniel M. Ryan is a long-time contributor to Enter Stage Right and has returned to the fold. © 2014 Daniel M. Ryan.

 

 

 

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