Cryptocurrency – I don’t see it working

Cryptocurrency does not act as a currency more like a deeply violate asset. The idea of the digital coin started back in the early 1980s, idea was implemented but failed during the 90s. The modern version however has found some cult success. Everybody knows the name Bitcoin born during 2008/09s. Dozens of clones exist each with different ideas driving them. Ideas behind it are a rejection that money needs to be issued by banks. Exchange rates should not have the central bank controlling them. Any company can create contracts as long parties agree. Promise that it could act like a currency has failed to materialize.

Unlike normal currencies, value is not backed by any institutions. Result violate price that all coins share, sudden market drops happen loads. The problem quite simply comes down to the overall design. Any currency is created by solving cryptography mathematics equations. Finite supply to due how the equation, the public ledger is used to record everything. The whole system is anonymous, encrypted but transactions are recorded. Recording everything is a major data storage nightmare. Giant database that is ripe to being hacked. The system has twisted itself into knots, claiming to save us all.

Like physical mining, energy is required and resources to create it. The computing power needed to mine it needs rare earth metals and fossil fuels. For something with no real value, it has a massive environmental impact. White tech bros who promise the world and don’t have a clue promote it. Fluctuations in price mean one day that dream car is yours, next day only half it. Blockchain the technology behind the ledger is meant to be useful yet nobody has found a real use for it. A credit rating system built off it could in theory work. 

The financial sector could be shaken up but creating new asset won’t do it. Making it easier for new competition to enter the market makes sense. Of course, need to make sure the cost not too high but investors are protected. What investors want right now are safe assets not risky ones. The trend is just a bunch of snake oil around some worthless encyrption. Regulators are keeping a close eye on it and for good reason. 

I think the whole thing one giant waste of time. Better off investing money in anything that has real value.