A good takedown of cryptocurrency marketing hype

Nathan Robinson of Current Affairs has an excellent article on the cryptocurrency fad, Why Cryptocurrency Is A Giant Fraud 04/30/2021.

Even the one thing I thought was actually practical about Bitcoin-type instruments isn't even much of a use, at least for most people:

Because you don’t have to use a bank, and can easily transfer bitcoin from person to person, it is also “private,” in the sense that you don’t have to give anyone your credit card information or even your name to transfer funds. This makes it particularly attractive to criminals, because it’s sort of like the digital equivalent of cash: easy to hide, tough to trace.

But there's a huge catch:

In fact, the idea that cryptocurrency is even particularly useful for crimes may be false. The RAND corporation notes that despite the “perceived attractiveness of cryptocurrencies for money laundering purposes . . . an estimated 99 per cent of cryptocurrency transactions are performed through centralised exchanges, which can be subject to AML/CFT [Anti-Money Laundering/Combating the Financing of Terrorism] regulation similar to traditional banks or exchanges.” So nearly all transactions are facilitated by third parties, namely companies that act as “exchanges,” serving as an intermediary that facilitates transactions. These companies are subject to subpoenas just like any other. In fact, if you go on Coinbase—the exchange that is mainstreaming the use of cryptocurrency by making it easy to use—the very first thing you are asked is to verify your identity, giving your name, phone number, the last four digits of your social security number, etc.

Robinson's article is a good survey of the libertarian claims of those marketing cryptourrency and why the are largely deceptive, like security, privacy, convenience.

Even the "blockchain" technology touted by cryptocurrency true believers is typically overhyped. It's not at all particularly effective in storing information and processing transactions compared to the digital processing that financial institutions currently use. It also requires a tremendous amount of energy compared to other processing methods.

At this point, cryptocurrency isn't exactly a Ponzi scheme. But it is a highly speculative, rish-risk financial investment for those using it.

Robinson observes cautiously, with reference to Venezuela and Zimbabwe in particular:

To the extent that Bitcoin is the “future of money,” then, it is only the future of money in situations of extreme crisis or deprivation—I suspect a lot of the pro-crypto people who understand its present-day uselessness are betting on a future collapse of the global economic system, although I think they overestimate the chances that Bitcoin itself could keep functioning effectively in such a nightmare scenario (someone has to maintain the actual wires).