You Can Forget About Crypto Now - The Atlantic:
Crypto was built on the idea that you shouldn’t have to trust banks with your money, that people should be able to hold it themselves, hopefully somewhere a little more secure than a mattress. And though you can still technically do that, there’s no guarantee that the value of your tokens won’t someday plummet to zero, thanks to the actions of a few rogue billionaires with outsize effects on the market. This is, transparently, a terrible deal, and a seeming betrayal of that dream of crypto utopianism—the vision of a future without shady intermediaries.
Crypto never made sense to me. You have to artificially create scarcity or you flood the market and reduce the value of the tokens. But to create the scarcity you have to make an escalating cost to mining new tokens - usually by making the calculations harder and thus more energy dependent. It’s a geometric sequence. Pretty quickly you get to the point where you can’t afford to mine more tokens - and the Earth with finite resources can’t afford it either.
We don’t have infinite energy and thus, by design, crypto can’t generate unlimited tokens. As a get rich quick scheme… it’s essentially a Ponzzi. (And, as The Atlantic article says, it’s easily manipulated.) If you didn’t get in early, you didn’t prosper. And once people figure that out, there’s no incentive for them to follow you into the “monetary system”. And so after a brief meteoric rise, you crash.
As we’re seeing.
