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Universities of Britain: cosying up to crypto is a bad look

Universities of Britain: you matter to us. We value your contribution to society and we want to take you seriously. So please, stop publishing cryptopuff masquerading as academic research or learning material.

Yesterday, we put out a post on a new course at the London School Economics that promises students will “gain a unique cryptocurrency taxonomy” that they can somehow use to value digital tokens. But before we had even hit the publish button, another university-sponsored crypto press release popped into our inbox.

This time, we were told, it was a joint research paper between Imperial College London and that other esteemed British institution, er, eToro, the retail-focused copycat trading firm that anyone who takes public transport in London will be all-too familiar with.

Thing is, this is a special kind of research paper, which has been written by Imperial but paid for by eToro. Here's the front page:

The report's foreword is written by eToro's UK managing director, Iqbal Gandham, who writes:

The report supports our conviction that cryptocurrencies will gain global mainstream adoption within the next decade.

We could never have guessed that it would do so! What a happy coincidence.

Then there's this corker in the same section, from Gandham again:

As our findings make clear, the notion that cryptocurrencies have to fit in with old-world financial models is flawed. Money has always evolved. Its uses and social status have changed and will keep changing. Why should we measure cryptocurrencies with the same yardstick used for traditional payment and currency systems? Would you really judge email with the same criteria as the written letter?

Ummm yes. Yes, we would and do certainly judge email by the same criteria as a written letter, like: is this a secure way of sending information? Will it get to the other person in good time? Will it cost me a lot of money to send it? Does the other person who receives it have to do anything in order to use it for the purpose it is designed (ie read it)? The criteria for a letter, in fact, isn't too dissimilar to that against which we would judge a payment method. And cryptocurrency doesn't do too well on any of them.

Now, just because a research paper has been commissioned by a company in whose interest it is to promote cryptocurrency, that doesn't mean it can't be neutral and can't contain solid material, right? (Even one that talks about overcoming barriers to trust and adoption in its title.)

Well there are certainly some memorable and well-sourced quotes, like this one (emphasis ours):

“It is fiat money that is the greatest social experiment on the human race; Bitcoin is merely a techno-reaction to that” -- Renowned Bitcoin expert

But perhaps the paper isn't even trying to be neutral, given what is written in the introduction (this time by Imperial, not eToro, which was only responsible for the foreword):

In this report, our goal is to examine how cryptocurrencies and cryptoassets can transition into mainstream use. 

Then there's this, in the executive summary, also from Imperial (emphasis ours, again):

The wider use of cryptocurrencies is the next natural step in reducing friction in the global economy, supported by the adoption of tokens in local contexts, be they specific to geographies or industry-sectors.

What does that meeeeeean? Come on Imperial, you're meant to be the 8th-best university in the world!

After learning that bitcoin “should be accepted as a unit of account not only in its own ecosystem but by a wider global audience”, we get to the “Tokens” section of the paper, where we find this:

Several blockchain platforms that aspire to compete with, and perhaps ultimately even supplant, Ethereum as the pre-eminent platform for smart contracts and the foundation of new digital token ecosystems are under active development, most notably Cardano, EOS and NEO (sometimes referred to as the ‘Chinese Ethereum’). Other platforms, most notably Stellar, make less use of flexible smart contracts, with an eye to boosting security, which is an important consideration in its targeted use case of financial environments. Other platforms seek to move away from the linear transaction recording structures traditionally associated with blockchains and classical cryptocurrency mining. IOTA, for example, uses a directed-acyclic-graph (DAG) or Tangle in which transactions are validated by other users who are seeking to make transactions. 

Guess how many of those “blockchain platforms” are offered as cryptocurrencies that you can trade on at eToro? That's right -- all of them!

We called up one of the two academics at Imperial responsible for the report, William Knottenbelt, professor of applied quantitative analysis. He told us that this kind of work was quite normal at Imperial, and that there was a whole department set up to do it, Imperial Consultants:

We undertook it on the basis that there would be no pressure as to the content and the content is the results of our own research, which has been quite extensive for this particular report.

But he did tell us that eToro got to check it before it was published.

He also said:

It’s very clear which parts of the report are eToro’s and which parts of the report are Imperial's.

It’s true, the foreword is clearly marked as having been written by eToro, and the rest not. What might surprise some readers is the unifying boosterish tone of both. Peer reviewed this is not.

The professor didn't say how much he was paid to write the report, but when we suggested this kind of work might be more lucrative than academic work, he said: “it depends, on a case-by-case basis, but I suppose that is true in general.”

We can understand academics taking on consultancy work -- everyone has to make ends meet, and we know universities struggle for cash. But promotional material should be clearly labeled as such. And even promotional material, when it's written by academics, should probably be better than this.

Related links:
The London School of Cryptonomics -- FT Alphaville
In the crypto world, you can get something for nothing - FT Alphaville
FUD, inglorious FUD - FT Alphaville

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