The idea of crypto may survive.

I’ve written a lot about cryptocurrency (still a misnomer) and you can read from the list below.

• Crypto Will Not Save The World
• The Crypto Adoption
• The Future is Decentralized?
• on Cryptocurrency (Original)
• on NFT’s

It was a trillion dollar market until bitcoin and ethereum tanked. At one point, I really did like the idea of digital assets and in some cases it still makes sense, just not a the prices people are still paying right now.

In 2015, I thought Bitcoin was huge buy at around $200 based on all the VC money getting into it. I still thought it was a fraud as money and even its original thesis was complete garbage.

Anonymous? Nah.
Better transaction? Not even close.
Limited Supply? So What, there are thousands of coins now.
Money? Be careful. Only a sovereign government can print money.

The internet already has digital money. We don’t need to exchange our dollars, pounds, euros, et al into BTC or ETH in order to buy things or conduct business. Marc Andreessen in a talk with Michael Malice said that “it’s obvious there should be a form of digital money… right? That’s just like an obvious thing.” The breakthrough isn’t a new complex technology. PayPal solved the personal information protection issue a while ago and everyone adopted digital currency denominated in their home country’s currency before bitcoin was even released.

Having been around the capital markets for 20 years now, what’s interesting is not that smart people make a lot of dumb mistakes, which happens a lot, it’s that disruption seems to be celebrated, even glorified. I will admit that’s a byproduct of individuals under increased government regulation looking for new ways to make it — fine, and yes money is the most controlled by governments; however, everyone building a crypto company is trying to make a market out of whatever niche they’re focused on. It’s all built on blockchains and its monetizing parts of life that may not need to be monetized, and it’s complete bullshit IMO.

Maybe I’m wrong and in the coming years or decades blockchain will revolutionize the internet bringing to fruition web3. Doing this only adds more complexity than necessary to an already complex world. The truth is that blockchain may be good for the banking industry, or to the financial sector as a whole; however, a decentralized ledger that’s public seems like a really bad idea for most businesses, even and especially financial ones.

The reality is that most cryptocurrencies are nothing more than Ponzi schemes with no real value created to enrich a small number of people who get in super early. Debate it all you want.

Even if it Bitcoin eventually becomes the money of the internet, it’ll still an asset that relies only upon fake scarcity and someone paying more for it down the line. Some others like Tyler and Cameron Winklevoss at Gemini Holdings may compare BTC with gold. Not quite. Even Warren Buffett famously shunned gold as not productive, but even that is wrong.

Aside from the fact gold has outperformed the market and is considered by many to be real money, it’s the only reason we have cryptocurrencies in the first place. Each year roughly $20 billion of gold goes into these electronic devices, many of which are powering mining operations in crypto. Then you have billions more put into gold jewelry. So, to say there’s not a productive use is just wrong.

Billionaires get things wrong too. All ideas are not good ideas, that’s gotta be obviously, right? Bitcoin was likely a bad idea. That’s okay. While we still have some remanent of capitalism left in society the cycle of risk and renewal works by the profit and loss mechanism. Not to say that bitcoin will go to zero, just that it wasn’t the harbinger of some new paradigm shift. That’s okay too.

Only time will tell…