Debate Magazine

The Crypto Crisis

Posted on the 13 August 2022 by Doggone

Cryptocurrencies and Non-fungible tokens (NFTs) remind me of the stereotypical scam of buying the Brooklyn Bridge. NFTs could actuallty put that scam into practice since they are a digital asset that represents real-world objects like art, music, in-game items and videos.

I've got an NFT of the Brooklyn Bridge: you want to buy it?
Something about fools and money anyone?

Anyway, there has been a Cryptocurrency crash which has become public with Bitcoin, the largest cryptocurrency by market value, having a recent fall of more than 72 percent since its November high.

There is a great article on this by Trevor Jackson in Dissent, The Crypto Crisis. This pretty much sums up the problems with Crypto Currencies:

[At one time,] there were about 19,000 cryptocurrencies in existence. By the time you read these words, many of them will have failed. If you have heard of only one cryptocurrency, it is almost certainly Bitcoin. Bitcoin is a decentralized peer-to-peer network with no single clearinghouse and no equivalent to a central bank or money-issuing authority. Bitcoin the platform issues currency units called “bitcoins,” whose value is determined by supply and demand on several different exchanges. There is no single price of bitcoin. Demand is driven by its use in transactions. Supply is determined through “mining”: using computer processing power to solve increasingly complicated math problems. The inventors of Bitcoin have consistently maintained that there will be a finite supply of bitcoins, alleviating the danger of inflation and creating instead an intentionally deflationary system. All transactions are anonymous, and bitcoins are held in a digital “wallet.” A bitcoin spent in a transaction is really a unique code and a series of past transactions of that code in a kind of digital ledger, known as the blockchain. Imagine if every dollar you spend came with a list of every past transaction that dollar had been used in, thereby proving that you obtained it legally. It’s a way to verify transactions while preserving anonymity. Once a transaction happens, notice of it is sent to the entire Bitcoin network, and all the “miners” in the system race to verify the ledger of past transactions. If you win the verification race, you are awarded with new bitcoins.

He then gets into how problematic the crypto currency system happens to be, which is very.

As I said, if you don't like Fiat Currencies, you should avoid crypto like the plague. Fiat currencies at least have something backing them up. Crypto isn't even a commodity based currency, which also have their problems.

Crypto is the commidity.

And it's one that only exists in cyberspace.

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