Why are the Kardashians famous? The answer is obvious. The Kardashians are famous because they are famous. As a group, they have no obvious talents other than being famous, acting famous, looking famous, and convincing unfamous non-Kardashians to buy Kardashian-branded products.
And so it is with bitcoin. Bitcoin is valuable because it’s valuable. While bitcoin is described by its proponents as a shared-ledger technology, it’s really a shared belief technology. We buy bitcoin because we believe that others will buy it in the future.
The Kardashians have been hugely successful in their chosen profession of being Kardashians, and by some estimates they now have a combined net worth around $3B. There’s nothing wrong with that; if people want to buy moisturizer from Kim or lip kits from Kylie, who am I to object? But, as with bitcoin, the basis of this wealth is a self-perpetuating set of beliefs, as opposed to an independently valuable economic function.
Anyone with eyes can quickly see that bitcoin is not money. There are not a lot of people at Starbucks paying with bitcoin. Similarly, the judges of Dancing with the Stars were able to quickly see that Kim Kardashian is not a skilled dancer. It’s not a close call.
El Salvador made bitcoin legal tender and gave each citizen $30 worth of bitcoin in an attempt to jump-start its adoption as money. The result was complete failure, as documented by Alvarez, Argente, and Van Patten (2023). Thus, even under ideal conditions, nobody wants to use bitcoin as money. As a payments technology, bitcoin is slow, cumbersome, and technically inept, much like Kim Kardashian’s ill-fated mambo on Dancing with the Stars.
When they first appeared, both Keeping Up with the Kardashians (KUWTK) and bitcoin were roundly condemned by elite critics. Variety’s 2007 review of KUWTK said “there’s not much of a show here, and no discernible premise,”[1] while The Washington Post in 2008 called it “real dumb.”[2] Economists, while initially intrigued, came out nearly universally against bitcoin as money, with Yermack (2013) concluding that “Bitcoin appears to behave more like a speculative investment than like a currency.”
Both the Kardashians and bitcoin were initially seen as destructive forces that should be banned. The Washington Times declared that “Kardashian culture is killing America,”[3] while a petition in 2011 urged that KUWTK be cancelled.[4] Similarly, Paul Krugman asserted in 2013 that “Bitcoin is evil”[5] while Joseph Stiglitz in 2017 said it should be outlawed.[6]
On multiple occasions, both the Kardashians and bitcoin were condemned as bubbles that were destined to burst. For the Kardashians, it was said that in 2012 that their “bubble is bursting,”[7] in 2014 that they were “running out of steam,”[8] and 2020 was supposedly “the year the Kardashian bubble burst.”[9] Bitcoin has been described as a bubble many times, including by Alan Greenspan in 2013. I myself gave a public lecture in 2018 titled “Bitcoin Bubble? Lessons from history,” although note the strategically placed question mark.
Despite these dire predictions, both the Kardashians and bitcoin have prospered. Let’s review possible explanations:
- Scarcity. Thanks to the bitcoin source code, the total number of bitcoins is capped at 21M. Thanks to the laws of biology, the total number of Kardashian siblings (defined as the children of Kris Jenner and Robert Kardashian) is capped at four (Kourtney, Kim, Khloé, and Rob). Even a broader definition of Kardashian, including various Jenners, children, spouses, ex-spouses, and hangers-on, would likely total to well under 21M individuals.
- First-mover advantage. Bitcoin remains the dominant cryptocurrency by market cap, overshadowing rivals such as Ethereum. Similarly, the Kardashians remain the dominant famous-because-they-are-famous celebrity family, with the Robertsons of Duck Dynasty far behind.
- Increasing institutional adoption. Bitcoin was initially dismissed by nearly all financial institutions, with Larry Fink of BlackRock calling it “an index of money laundering” in 2017.[10] With the notable exception of Vanguard, institutions now embrace bitcoin, with BlackRock running a successful bitcoin ETF. Similarly, the Kardashians are now firmly in the mainstream of fashion and media. The first Harvard Business School case covering the Kardashians appeared in 2023.
What will the future bring? Can both bitcoin and the Kardashians remain a permanent feature of the collective human psyche? I have no idea. Kim Kardashian is now a billionaire, and as she once tweeted, “Not bad for a girl with no talent.” The market cap of bitcoin is now approaching $2 trillion; not bad for money that’s not money.
Endnotes
[1] “Keeping Up With the Kardashians,” Variety, October 10, 2007.
[2] “Real dumb,” Washington Post, October 10, 2008
[3] “Kardashian culture is killing America,” The Washington Times, January 3, 2013.
[4] “Anti-Kardashian Petition Demands E! Cancel 'Keeping Up',” Reuters, November 15, 2011.
[5] “Bitcoin is evil,” The New York Times, December 28, 2013.
[6] “Bitcoin ‘Ought to Be Outlawed,’ Nobel Prize Winner Stiglitz Says,” Bloomberg, November 29, 2017.
[7] “"The Kardashian bubble is bursting," New York Magazine, January 13, 2012.
[8] “The Kardashians Can't Keep Up,” Vanity Fair, January 27, 2014.
[9] “The year the Kardashian bubble burst, amid a string of public scandals,” The NZ Herald, December 31, 2020.
[10] "BlackRock CEO Larry Fink calls bitcoin an index of money laundering’," CNBC, October 13, 2017.
References
Alvarez, Fernando, David Argente, and Diana Van Patten. "Are cryptocurrencies currencies? Bitcoin as legal tender in El Salvador." Science 382, no. 6677 (2023).
Yermack, David. "Is Bitcoin a Real Currency?." (2013).
