Republicans suddenly love crypto. Americans should beware. (WP)

[snot]

33. Pardon my language, but this article is B.S.

Last edited Sat Aug 3, 2024, 04:59 PM - Edit history (5)

"Cryptocurrency is a volatile asset with no intrinsic value." The dollar also has no intrinsic value (since Nixon took it off the gold standard in order to finance the Viet Nam War); ditto many other currencies, including any potential Central Bank Digital Currency (CBDC) and many other kinds of assets. As for volatility, there is no way crypto will ever cause the kind of carnage wrought by credit derivatives in the 2008 Global Financial Crisis, yet we now have more credit derivates than ever (and imho, we'd benefit much more if such derivatives were much more severely restricted than we would from restricting crypto).

"[Crypto] is used almost exclusively to speculate or to engage in shady businesses, such as selling drugs or collecting ransom, for which the anonymous nature of crypto accounts comes in handy." This is misleading or flat-out wrong in several ways.

First, note that the article provides zero support for this claim. Second, it makes no sense at all to generalize about crypto, because there are hundreds of kinds, each with different characteristics. Imho the only ones worth talking about, in terms of both their qualities and their share of the crypto markets, are BTC and ETH.

The vast majority of BTC are used not for crime but as a store of value, since the currency is non-inflatable. This is quickly verified since it's known that most of it is held by owners that have simply sat on it, often for years, watching its value rise and fall but mostly rise; in fact, this lack of circulation is decried by some as an impediment to BTC's development as a currency.

I know less about ETH, but my understanding is that it's principally used in facilitating and enforcing contractual arrangements.

The quoted statement is also misleading in that if you want to do criminal transactions, sure, you can use crypto, but you can also use dollars – and dollars are in fact used for crime much more frequently.

Moreover, just about anything can be used in connection with crime – currencies, phones, computers, cars, buildings, clothing, food, etc. – but we don't outlaw those things, and even reducing access to them would first of all require a gigantic, tyrannical police state and secondly fail to get at any of the root causes for crime.

Finally, re- Warren Buffet's take on BTC, see "If You Invested $1,000 In Bitcoin When Warren Buffett Called It 'Rat Poison Squared,' Here's How Much You'd Have Now....$3,462.82...based on a price of $34,490.19 for Bitcoin at the time of writing. This represents a return of 246.3%...." (https://www.nasdaq.com/articles/if-you-invested-$1000-in-bitcoin-when-warren-buffett-called-it-rat-poison-squared-heres ). Buffett's investment firms have also made a lot of money investing in crypto.

In sum, this is a complex subject, of which the article imho shows very little understanding.