Fascinating Conspiracy Theories around Crypto

Cryptocurrencies always possessed an air of mystery — from their mysterious creator (or creators) to the revolutionary technology that promised to upend the world of finance. The nebulous nature of these digital assets — which exist in a world where the usual rules, for better and worse, seem not to apply — has made them fertile ground for some of the most interesting, and at times outlandish, theories.

Enigma of Satoshi Nakamoto

No list of crypto conspiracy theories would be worthy of the name without some mention of the most enduring mystery of them all, the actual identity behind Bitcoin’s creator, Satoshi Nakamoto. This mysterious entity appeared out of nowhere in 2008 with a white paper that would change the world and disappeared into digital limbo in 2010, leaving behind an enigma that still has investigators scratching their heads and conspiracy theorists wiping spittle from monitors.

The government agent hypothesis is still a dominant and interesting explanation for Nakamoto. Supporters say that Bitcoin was developed by intelligence agencies, usually the C.I.A. or N.S.A., as a fancy surveillance tool under deep cover as a libertarian currency. The premise is that such agencies created Bitcoin to lure and entrap criminals, terrorists and tax evaders, then monitored their activities on a traceable public ledger called “a blockchain”. And, after all, while Bitcoin provides pseudonymity, every transaction is logged on a public ledger in perpetuity. The case becomes even more compelling when you consider the fact that it's none other than the NSA who created the very encryption technology driving Bitcoin — observers speculate the organization had plans from day one to use digital cash for its surveillance programs.

Another widespread belief is that Satoshi Nakamoto does not exist, and he or she or they are a collective pseudonym by a cluster of people from big companies like banks. This theory holds that Bitcoin was invented by a group of tech companies, banks or even government actors working together to create a new financial system. The abrupt vanishing of Nakamoto in 2010 might also be interpreted as the end of this first stage in their grand experiment, and an attempt by the creators to withdraw from direct observation and witness how the system they unleashed would grow up on its own.

The dead genius theory also provides a sadder reason for Nakamoto’s silence. Others suspect the creator was a genius who is now dead — a fact that might account for radio silence and why the Bitcoin fortune Nakamoto has at his disposal hasn't been touched. An idea that found remarkable success was to consider some of the people who had been proposed as Satoshis and asking each person: are you Satoshi?

The most fascinating thing about the Satoshi enigma is we may never get to know. The founder’s identity was so deeply concealed that not even the very best and sophisticated research institutions could find conclusive evidence. This cultivated mystique has simply whipped up more conspiracy theories, with one theory positing that Nakamoto is having his identity shielded by some of the most powerful people in the world, who have a stake in keeping his true self a secret.

Bitcoin for Total Global Surveillance

Governments cannot spy on people if no money flows through them. Taking government creation theories a step further, another attractive conspiracy is that Bitcoin was not just built as a spying tool but fits broader goals of creating global control over financial movements. This theory contends that the fact that blockchain is transparent was no accident — it’s a feature, not a bug — and was in fact crafted to make us feel like we have privacy without actually providing more transparency about where our money comes from than ever before.

Advocates of this theory note that Bitcoin transactions are pseudonymous in nature and, by use of sophisticated analysis can frequently be followed back to their origin. They claim governments and intelligence services have powerful new tools to analyze the blockchain, which can unmask users with alarming precision. The theory holds that none other than Bitcoin was designed to pull our greed for privacy into a system actually more capable of tracking user behavior than banking.

What is most fascinating about this theory is the environmental aspect. Some conspiracy-mongers insist Bitcoin’s energy-intensive proof-of-work system was, in fact, a weapon to drain the world’s energy reserves and boost carbon emissions. They argue that this was all part of a wider push to undermine traditional economies and move people into a more controlled financial system, underpinned by the digital economy. The theory, in a nutshell, is that the environmental destruction wrought by bitcoin mining isn’t just an unfortunate side effect of a second-rate currency; it’s part of the system this seemingly exotic form of digital money was designed to create one more likely to bring about apocalypse than social utopia.

Opponents of this theory argue that Bitcoin's decentralized nature renders it immune to control by any one party, including governments. They also maintain that the open blockchain is, if anything, even more private than the closed doors of a traditional means of handling transactions. But the theory endures because it provides a tidy explanation for many of Bitcoin’s paradoxical properties.

Tether Manipulation Conspiracy

One of the oldest and bureaucratically adept conspiracy theories in existence involves Tether (USDT), the most widely used stablecoin in the world. Detractors say Tether has printed unbacked USDT and used the fake money to artificially pump up Bitcoin prices.

The theory says that Tether Limited, the company that owns USDT, has been issuing tokens without the corresponding dollar reserves and then using these “fake” tokens to purchase Bitcoin on major exchanges. This artificial demand would inflate the price of Bitcoin, and this would lead to a self-perpetuating cycle where increasing prices bring in more suckers and fools with money who buy Tether, push up the price of Bitcoin even more.

Supporters of this theory cite a number of curious patterns. They point out that Tether’s market cap has ballooned to an enormous size, without always being able to explain where all those backed dollars came from. They point to times when huge quantities of Tether were issued and quickly used to purchase Bitcoin, sometimes at times of market stress, when there may not otherwise be natural demand. They also highlight Tether’s track record of regulatory challenges and the company’s unwillingness to offer transparent audits relating to its reserves.

This theory’s best iteration says Tether isn’t going at it alone — maybe there’s collusion between itself, major exchanges, institutional investors and perhaps even governments. And the central tenet of this conspiracy theory is that all of cryptocurrency — the whole thing — has been set up as a scam to increase peoples wealth out of nothing, and bring normal investors into a system which can be controlled by others and one day simply turned off.

Tether has long denied these accusations, and has even held up several audits and attestations which purport to prove their reserves. But the company’s track record of regulatory trouble and complex financial arrangements have kept such conspiracy theories alive. The theory has gained traction because it gives a technical rationale for why Bitcoin’s prices would behave what some perceive as irrationally — and also provides something of a story line for how a medium-size company could jostle the entire cryptocurrency market.

Quantum Computing Threat

Conspiracy theories form about quantum computing as the quantum frontier advances. A few conspiracy theorists claim that government financing and an actual secret organization is inventing quantum computers to crack blockchain encryption, make cryptocurrencies irrelevant and give control of the entire digital economy to such entities.

The theory is that on the surface quantum computers are being made public to develop them for legitimate purposes, but in reality there are black projects building far more sophisticated quantum systems which will have full control over breaking the cryptographic underpinnings these cryptocurrencies rely on. Advocates claim that these organizations are biding their time before unleashing these quantum attacks, devastating trillions of dollars in cryptocurrency value and necessitating a move to government-controlled digital currencies.

This theory is lent credence by the fact that quantum computing does constitute a real threat to modern cryptography. Bitcoin's SHA-256 algorithm is vulnerable to quantum computers, which could break its cryptographic security. The theory goes that intelligence agencies know about this weakness and they are either making quantum resistant cryptocurrency themselves or waiting until the right moment to use the vulnerability.

A more advanced variant of this theory is that quantum-resistant cryptocurrencies are being intentionally subverted to prevent them from seeing the light of day. Many on the necessary side of this scientific and technological arms race claim that governments are interested in retaining quantum attack capabilities as a means of wringing some measure of control over the cryptocurrency market and their own digital currency systems.

The green conspiracies regarding quantum computing are interesting as well. Other theorists posit that quantum computers are running on an extremely dirty energy source and are consuming orders of magnitude more energy than they publicly admit to. They claim that the use of a covert energy source is one part of a wider strategy that aims to subvert and disrupt global energy systems, driving a shift to their preferred tightly regulated fuel sources.

Whales and Market Manipulation

The cryptocurrency market’s wild and woolly days have produced no shortage of theories about suspicious trading activity, including the rise of big holders known as “whales” who may be colluding to sway prices. These theories claim that a small number of people or organizations own extravagant sums of cryptocurrency, and they're using their powers to play with market prices for their own gain.

The most elaborate variant is that the whales are not alone in this, but acting in concert with old fashioned financial institutions and governments — possibly even with criminals. Supporters say these are groups of organisations banding together to whip up fake market cycles, pumping and dumping cryptocurrencies in order to draw money from retail investors.

It is a theory that is lent weight by the fact cryptocurrency markets are mostly less regulated than traditional financial markets. And who knows what big holders get up to if you’re not in New York and nobody’s watching? Without the same guardrails that apply to other, more traditional securities, large holders can do things that would be off limits elsewhere. The theory is that those entities are exploiting the regulatory vacuum to drive prices in ways they wouldn’t be able to in more traditional markets.

Some go further, claiming that the entire crypto market is nothing more than a wealth transfer machine from retail to institutional. Sure, hype cycles around new technologies and promises of enormous returns can work to lure unsophisticated investors into a system where they’ll inevitably lose their money to more sophisticated players.

The environmental aspect of this theory is quite appealing. Some conspiracy theorists suggest that the power-hungry Bitcoin-mining process is an intentional ploy to manufacture scarcity and increase price. They argue that whales are intentionally spending at a loss to starve the market for new coins and hold on to their position.

New World Order Police State and Global Enslavement

Arguably, the most extreme of the conspiracy theories go so far as to posit that digital currencies are being orchestrated as a way to set up a New World Order which would have total financial command around the world. These theories are based on the belief that electronic currencies are a means by which to get rid of cash, move everyone onto an all-powerful surveillance grid and develop a financial network that can only be used if approved by some nefarious group of all-seeing entities.

The theory proposes that this transition to digital currencies is not being carried out haphazardly but in a controlled manner through the use of tactics such as encouraging cryptocurrencies, denigrating cash and presenting synthetic crises to support the need for all these. Supporters contend the COVID-19 pandemic that promoted contactless payment and digital transactions aligned with this long-term plan to push for a faster shift towards a cashless society.

The environmental aspect of this theory is quite fascinating. And some in the conspiracy theorist realm say the environmental damage being done by crypto mining is not accidental at all and is instead part of a concerted effort to destabilize legacy energy systems and compel a transition to more regulated sources. They believe the energy use of cryptos is being intentionally left high to fabricate energy scarcity in order to affect policy.

The theory further posits that the creation of central bank digital currencies (CBDCs) is already part of this grand design. Advocates say: similar to the argument that cryptocurrencies like Bitcoin are being pushed as an alternative to existing money, when in reality they’re a bait and switch gearing up the public for government issued digital currencies. The theory is that once people have been conditioned to live with digital currencies, governments will issue their own versions — complete with total surveillance and control.

Future of Crypto Conspiracies

The trick for anyone in this space is becoming good at separating truth from hype, fact from fantasy. Some of these theories sound pretty crazy, but it's worth remembering that many of the things we now accept as truths were once considered nothing more than conspiracy nonsense. The trick is to be sceptical AND open to the possibility of things that might seem unlikely at first.

As long as there are cryptos, they will be the inspiration for stories and theories and mysteries. Real or not real, it serves at least one vital purpose — to keep all of us asking questions, looking critically and thinking carefully about the technologies that are reshaping our world. If you build in conditional statements to the future of money, where privacy and transparency coexist, decentralization meets centralization, and code is law, what separates conspiracy from reality becomes thin.

What is NOT a conspiracy at all is the fact that tokens on SunPump are on fire! So we created a service called Netts Energy SunPump Bot — it will keep you updated on any new tokens out there so you can keep your hand on the pulse at all times: