The problem with crypto

is its foundations. Crypto is powered by human greed; by design and by implementation. Below are a few observations of how this all ties together.

The basis of capitalism is of course human greed. This, the most reliable of human emotions, has proven itself time and again to be the most efficient principle for the orchestration of economic systems. Systems based on other principles, like solidarity, fairness, efficiency, have generally not faired well because, well, in the end we are all above all, greedy. This has worked incredibly well when markets and legislative units (i.e. nations) where tightly coupled. I.e. when elected governments had the power to regulate businesses, because their markets to a large extent coincided with their pool of workers and the society they operated in. Recently the economic principles of greed have been applied on a global scale through “globalization”. Markets, societies, workers and legislative units have been completely decoupled, which of course has resulted in the current state of crony capitalism. As reliable as greed is, it turns out it really needs some sort of regulation, if we want it to also produce liveable societies.

The foundation of most financial systems is a combination of trust and power. With neo-liberalist globalism having put serious dents in our trust in the institutions of our current financial system, and naked power being a poor substitute, we might consider turning to the recent great innovation of crypto “currencies”. Crypto basically replaces the fragile principle of trust, with the principle of human greed. This way of leveraging human greed for what is basically useless work is labelled “consensus algorithms” (somewhat obscuring its true foundation) in the world of crypto. However – if we pause to study how crony capitalism is slowly eating away at what is good and, yes, sacred about the West, I think it’s pretty obvious where a financial system based on crypto would lead us. A system based on the principles of a casino, with rampant inequality and unmerited wealth can only lead to a complete lack of stability; and stability is in the long run the foundation of any real human progress.

Maybe I’m wrong, mayby the current problems with crypto aren’t birth defects, but simply the childhood diseases of a truly great piece of human innovation. Maybe tech will save us after all. Time will tell.

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