Willful Delusion: What is Cryptocurrency and Blockchain Really?
One could argue that the relentless and unconditional faith that cryptocurrency proponents have is merely a result, in the majority of cases, of the sector’s meteoric rise in value. The plethora of “experts” who were doing something completely unrelated until they made an unexpected score on their crypto flyer are far in excess of the relatively small number of developers who were there before 2012.
One might reasonably conclude that the promise of cryptocurrency is based on a delusion: that digital alternatives to fiat paper is somehow immune from the human interferences that cause wealth disparity and hyperinflation.
To be fair, it could be argued from the crypto side, that those who fail to grasp the utterly disruptive revolution that are inherent in the rise of cryptocurrencies are themselves delusional, and is the perspective exclusively of those who lack the vision and imagination to understand what is going on around them.
I definitely fall into the latter camp.
Blockchain is indeed a useful evolution of programming and cloud-resident functionality. But at the end of the day, it’s nothing more than a next-generation spreadsheet program with advanced features. (Aren’t those little “blocks” in Microsoft Excel?) And like a spreadsheet, you can track absolutely anything on it.
That cryptocurrency purports to be a revolution in the way value is transferred among humans is a bit of a stretch.
Here are a few absolutes in regard to Bitcoin, which I shall use as the example, to demonstrate unequivocally that bitcoin and cryptocurrencies are in and of themselves worthless, and can never be anything but.
- There is no cryptocurrency in existence that can act as anything more or less as a proxy for whatever central bank-originated fiat currency is used to buy it, and sell it.
- The myth of immunity to hyperinflation is ridiculous in that a) every time a crypto is “hard forked”, it is an inflationary event, and b) there are over 2,000 cryptocurrencies where before there were 8. Cryptocurrency is the most rapidly hyper-inflating money supply in the history of humanity.
- Because it is so energy and resource intensive, there are obvious limitations to how robust a spreadsheet that relies on copies of itself resident on an exponentially growing nodal distribution can grow to be before we are preferring Bitcoin production to food production.
- The numerous episodes of thefts, frauds and other system failures representative of defaults on promises made by the myriad developer communities and their rivals is abundant evidence that the promises made by the developer community are unsupportable in reality.
In short, Bitcoin is not necessarily a fraud. But continuing to promote it as all these unmet solutions is fraudulent.
And contrary to the popular refrain, a delusion that is widely adopted does not constitute evidence of its viability, permanence, or legitimacy. How long did it take all of humanity to be convinced the world is not flat?
I don’t mind if you think I’m a luddite who doesn’t get it. If governments decide to digitize their fiat currencies, the crypto developers will all claim victory, despite the fact that it is complete failure.
Those who blindly cling to the illusion of permanence and viability in decentralized cryptocurrencies fail to grasp one of the key lessons of human history: he who controls the currency controls the country. And there is not today, nor tomorrow, a single government that will permit the loss of its control over its country through the loss of control over its currency. Those governments in the past that have failed to heed this lesson have been consigned to history’s dust bin.
Blockchain is useful
While cryptocurrencies are vaporizing, and have vaporized and will continue to vaporize, vast sums of fiat-denominated wealth, the spreadsheet technology called blockchain, is definitely a useful – or more accurately, series of useful – innovations within such an application. But there is no reason to get all hyperbolic about it and trot out the overused “revolutionary” descriptor.
There is the platform, which is not new. Let us recognize the platform of which both spreadsheets and blockchain are members as “financit Then there are the features, which, when evolved en masse and in a short time frame, can make the platform look new. The huge number of new features in spreadsheets or excuse me blockchain that have taken spreadsheets duh I mean blockchain to a whole new level of functionality are indeed impressive. But think of them in the context of what is inevitable when the environment in which a platform exists changes.
Snow tires in snowy climates. Electric cars when hydrocarbon-fuelled ones become tools of mass suffocation. Umbrellas when it rains.
There is great use for a spreadsheet whoops there I go again I mean blockchain that can exist in the “cloud” and run algorithmic features that are representative of trust-free (in the human sense of the word currently) certainty of buyer, seller and whatnot that we are calling “smart contracts”.
And at the end of the day, we could and should and will track everything from bullets to bacteria on multi-noded blockchains that constitute redundant sources of verification, authentication, and multiple failsafe backups of entire transactional histories.
But please. There is no revolution occurring because these while yes impressive but no not revolutionary natural evolutions in information technology have arrived. The more pressing problems of overpopulation, resource depletion and destructive warfare are as present as ever, and no crypto-thing is contributing to a solution to those.
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