With great eagerness I read the article, Crypto’s Decline Was Inevitable, Because It Is Based on a Classic Money Myth. I’ve been struggling for a long time to understand whether Bitcoin (and/or other cryptocurrencies) are the future or a Ponzi scheme:
- Quote of the day—Jim Rickards
- Quote of the day—Lee Reiners
- Quote of the day—Peter Schiff @PeterSchiff
- Existential threat to Bitcoin
- Quantum computing as a threat to Bitcoin
I expected the author to make everything clear to me.
I was extremely disappointed.
While I tend to believe the main conclusion, the decline of the cryptocurrency market is inevitable, is true, I am exceedingly annoyed that he does not back up his claims. He merely asserts that, as a psychoanalyst, he knows his claims about the nature of money are true.
Even highly credentialed economists are not so arrogant as to make sweeping claims about the nature of money or the inevitable decline of cryptocurrency without detailed explanations and/or numerous citations. This guy is not even playing in his area of expertise and claims complete mastery of it.
That’s really, really lame. This discredits his entire profession. And, for a psychoanalyst, that is no easy task.
This is a pretty interesting Reddit writeup I found describing why every altcoin except Bitcoin itself is basically a grift
https://www.reddit.com/r/Bitcoin/comments/x0i8ts/just_traded_all_my_eth2_for_btc/im8j35n/
All crypto coinage is the digital equivalent of the labor theory of value, and suffers from the same flaw.
Just because you worked at something doesn’t mean it’s useful or valuable.
Kurt
The way I look at it: crypto currency is a type of fiat currency, but without the putative government backing to give it some semblance of reality.
The other problems are in the infrastructure, in a couple of ways. Bitcoin and other “proof of work” schemes require absurd amounts of energy even to operate at very modest scale. And all the various “exchange” setups basically involve handing over your wallet to something that resembles a third world bank, but less regulated.
The real problem is that crypto is a dodge. It wouldn’t need to exist if it wasn’t for the fed screwing up the monetary system. And trying to control everything.
So, to me that is its utility. As a work around. And if you need a work around then it has value. If not, it doesn’t.
As a store of value? You weren’t going to buy much in Florida last week with it.
Yes, but if you don’t trust the government’s money system, wouldn’t gold coin make a whole lot more sense? It doesn’t depend on large quantities of electricity, it isn’t as vulnerable to government interference, and it can’t be hacked by hackers in Russia.
“…it isn’t as vulnerable to government interference…”
Tell that to the dependents of the people that held gold that FDR stole. Make it, again, illegal to own gold, and see what happens.
Your right about the coinage metals. The difference is that were not as law abiding anymore.
Can you imagine Kamala Harris telling everyone they had to give up their AR15’s and gold?
Ya, just stand there and hold your breath Kamala.
The only difference between cryptocurrencies and a paper dollar is one is actually tangible. NEITHER have any intrinsic value other than people’s belief in them. BOTH are FIAT currencies that can be created, manipulated, inflated and devalued.