What the Crypto Crowd Doesn’t Understand About Economics

What the Crypto Crowd Doesn’t Understand About Economics
bloomberg.com

Good luck getting unbiased non-clickbait news when journalists only source of revenue is directly tied to advertisment in an article.

I found this to be the central thesis:

> If anything, crypto is more likely to hurt the currencies of countries that are doing very poorly, such as Venezuela. Fiat currency won’t just go away, so over the long run crypto could actually boost the value of the dollar by stifling the rise of potential competitors.

...and the author is absolutely correct: much of the crypto crowd, whether or not they understand this, seems wont to ignore it.

I view blockchain tech - and even crypto assets - as a wonderful, peaceful, transformative technology in the long-term. But I also think that the need for calm analysis, thinking about much, much longer timeframes, is sorely needed in the 'crypto crowd' today.

> A second point, oft neglected in the crypto community, is that crypto prices won’t continue to go up forever at high rates. It doesn’t matter whether money supply deflation is built into a crypto system, or that new and valuable uses will be discovered each year.

Here I again I agree, but I do want to add something important:

New and valuable uses are very important right now. I work at NuCypher, and we are very proud of having deployed proxy re-encryption as an access management tool. But nobody is using it, for two reasons: 1) gas prices, 2) there are no other "new and valuable uses" which make access management worthwhile at the moment.

Whether or not you see a rich future for blockchain tech, I hope we can all agree that solid uses - especially those which advantage groups marginalized by yesterday's internet - are the real driver of the eventual equilibrium the author describes here.