All That Glitters Is Not Crypto
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global Inflation and the Threat of war highlight a lack of emotional connection to virtual Currencies
VENICE, ITALY – Here’s the breaking news from this ancient capital of pragmatic human enterprise: Cryptocurrencies are not gold.
That’s not to say Venice isn’t sensing value in digital currencies: A northern Italian virtual currency community called the Venice Crypto Project is attempting to build a digital medium of exchange for the city’s 25 million or so annual tourists. Venice Coin and Venice Swap are setting up a market in digital assets. Italy’s vaccination tracking technology is partially built from blockchain components at the heart of cryptocurrencies.
“The way is through a new kind of Venice in cyberspace, available to anyone in the world regardless of race, class, religion, gender, nationality, or occupation,” writes Alex Gladstein in introduction to his crypto manifesto Bitcoin Is Venice.
The Venetians were lavish in their use of gold as a statement of power and prestige. Here is the golden exterior of the Basilica San Marco.
But then, there’s actually being here, in the fog and Venetian sea air; and in attendance at the Olympics of art – the 59th Edition of the Venice Art Biennale. Here, among exhibitions from more than 80 countries and 30 collateral events, lies a profound and clearly overlooked truth about cryptocurrencies: Digital money simply does not have the chromatic luster of gold, copper, or bronze. There is no ripe lemon-ish sheen that reflects off of a Bitcoin or an Ether.
And this lack of direct, tactile experience alters the trajectories of virtual currencies in today’s unstable economy wrestling with inflation and worries of war.
That Golden Glitter
Gold miners know what they dig for. The National Mining Association prints a concise and intriguing history of gold’s 4,000-year journey from an ancient source of jewelry and ornament to a global currency during the middle ages, and into its modern non-monetary role as a high-tech commodity and hedge for hard times.
But this year’s Venice Biennale quietly indicates there is a profound new chapter opening to that golden story.
“So pervasive is the association of gold with beauty, warmth, worth and nobility, that it has become both a substance and a symbol of power, achievement, divinity and adoration,” said designer and color theorist Lori Weitzner. Weitzner spoke to us about her explorations into human reactions to color – including gold – as part of the Personal Structures exhibit produced by the European Cultural Center, currently on display at the Palazzo Mora.
Weitzner argues that there’s a firm grammar to color. And that grammar is one of the few lexicons that transcends cultures, race, and countries of origin. No matter who you are, or where you’re from, says Weitzner, colors play a key role in how we react. Browns and earth tones calm. Reds energize us. Greens evoke a relaxing summer afternoon.
For Weitzner, colors speak. Our jobs are to listen.
Weitzner argues that colors — like these golds and bronzes — evoke consistent emotional reactions across many cultures and countries of origin.
Science firmly backs Weitzner’s claims. Emotional reactions to color are part of a larger area of study named synesthesia. Synesthetic experiences pop up when one stimulus evokes a seemingly unrelated response in a second emotion. Some sounds invoke the taste of bread. Certain surfaces trigger the memory of a bedroom. Colored alphabets, fridge magnets, and online memes can all stoke seemingly random secondary feelings.
The Oxford Handbook of Synesthesia offers more than 1,000 pages of scholarship on documental and cross-cultural responses to chroma, taste, tactile experiences, and sounds.
Synesthetic responses are so firm they are a tool that can probe human consciousness, behavioral health, and in some cases, artificial intelligence.
What’s dazzling about considering synesthetic responses to color, here in Venice, is that money may simply be the thing that evokes a synesthetic response of value.
And the story of the magical thing called money, has always been plated in gold.
The Golden City
Even now, centuries after the city’s sacking by the Austrians in 1793 – Napoleon made an additional special detour here in 1805 to fetch yet more golden bounty – gold is still everywhere. The mosaic ceiling of the Basilica at San Marco is overwhelmingly crafted from golden tiles. The ceiling’s of the Doge’s Great Council Room and Squola Grande Di San Rocco are finished with opulent gold leaf. The Correr Museum features gold-finished doors. The Doge’s Crown was basically made from golden thread, as are the bathing caps on Cathy A. Feuerman’s epic hyper-realistic contemporary sculptures on display at the Santa Maria Della Pieta Church.
But probably far more relevant to the millions of tourists who pour through this city is destination confectionery Nino & Friends, which features a Salizada San Lio retail store window that oozes liquid chocolate over 7 model gondolas and 72 bars, all plated in gold.
The opulent golden display is not merely an expression of power and prestige for Venice. It was part of a larger color strategy deployed across its arts and social order. Venetian painters like Titian and Bellini were innovative colorists. One master, Giorgioni, didn’t even bother to start his paintings with pencil sketches, like Da Vinci or Rembrandt. He simply built his images from layers and space of color.
“It is the love of surface, and the rich deployment of the effects of the surface, that define the Venetian sensibility,” wrote Peter Ackroyd in Venice: Pure City
Gold even sells chocolate in Venice: Nino & Friends’ golden retail display at Salizada S. Lio.
Always Coined in Gold
The Venetian feel for color and the allure of gold reminds us that, historically speaking, the notion that gold was not a monetary tool is a recent American idea, with little track record. It’s not overlooked here that it’s been barely 50 years since then-President Nixon ended the gold standard for global currencies in 1971.
In the city’s bars and dining rooms there are Venetian-scale whispers of revisiting the economic role of gold. All-time high commodity prices for gold are seen as reasonable investment hedge. It’s being pointed out that the value of several so-called crypto stablecoins are tied to gold.
And there’s deep debate on the Russian Republic’s move to value its ruble back to gold.
Connecting gold to the ruble stemmed an internal run on the Russian currency. But European business people here say, gold creeping back into the value of Russian assets is a clever work-around for Ukranian War-inspired economic sanctions.
Now certainly no one is arguing that gold – or any fixed commodity – will return to being a key medium of exchange or supplant virtual currencies in an expanding digital global economy. But once one wanders these ancient Venetian streets, that were once literally plated in gold, how far-fetched is it for other central bankers to consider similar moves as Russia’s?
How big a step would it be for the central bankers of Switzerland or France to find a way to tie commodities like gold to its currencies to fight runaway inflation. Already, once-trendy European debt-management tools, like negative-yield bonds, are evaporating from markets. And U.S. Federal Reserve Chairman Jerome Powell admitted last month that policy makers had taken price stability for granted.
Russia’s experiments with tying the ruble to gold show tactile stores of value are finding roles in the modern economy.
Powell is firmly committed to bringing some form of a virtual American dollar to markets soon. How outlandish would it be for him to shore his new eDollar with the emotional luster of gold? A virtual version of, say, the Federal Deposit Insurance Corporation, could guarantee value in gold. There are major pluses to the idea: No virtual currency, take it Bitcoin or Ethereum, could compete with the eDollar. Discipline would be enforced on debt-loving policy makers. There would be new management tools for central bankers.
Weaving gold back into the global economy is far from the wildest idea the city of Venice – or the world – has ever considered.