From Pine View Farm

The Crypto Con 0

Paul Krugman skewers the central myth of cryptocurrency. A couple of snippets (emphasis added):

After all, the 2008 white paper that started the cryptocurrency movement, published under the pseudonym Satoshi Nakamoto, was titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” That is, the whole idea was that electronic tokens whose validity was established with techniques borrowed from cryptography would make it possible for people to bypass financial institutions. If you wanted to transfer funds to someone else, you could simply send them a number — a key — with no need to trust Citigroup or Santander to record the transaction.

(Snip ahead to now)

. . . .cryptocurrencies are largely purchased through exchanges such as Coinbase and, yes, FTX, which take your money and hold crypto tokens in your name.

These exchanges are — wait for it — financial institutions, whose ability to attract investors depends on — wait for it again — those investors’ trust. In other words, the crypto ecosystem has basically evolved into exactly what it was supposed to replace: a system of financial intermediaries whose ability to operate depends on their perceived trustworthiness.

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