The Absurdity of Cryptocurrency

I have almost no sympathy for people who think they have found a short cut to getting rich and then lose their money. I have even less sympathy for those who think that one of the paths to getting rich is to avoid paying taxes on their income. I have therefore taken some delight in reading about those who invested their money in one specific cryptocurrency and now appear to have lost access to their money. The person who ran the company has died without telling anyone how to access the accounts. Given that the cryptocurrency prides itself on its ability to ensure that the accounts are absolutely safe from hackers - it may never be possible for people to gain access to the accounts. I find it rather interesting that some investors in the semi-underground cryptocurrency economy are now demanding that the government regulate the industry so that investors are protected.

Someone needs to tell those investors that you can't have it both ways. You cannot plan on making money in a process that celebrates its lack of government regulation or monitoring - in fact, argues that cryptocurrencies are better than "regular" money that is issued and controlled by the government because it exists in a totally free market - and then ask for help to create regulation when it all goes bad. It boggles my mind that people would think that one could give "real" money to someone who would invest it in something that had no value - and in fact never really existed and then be surprised when a problem appeared.

Cryptocurrency has always seemed to me to be a bit like investing in alpacas or some other exotic animal. It only has value when someone says it does. The alpaca, for most Canadians, has no value. Its fleece is nice but there is a fair amount of processing required to make it useful and there are a limited number of people who want to use it. The real money was in selling the breeding stock. Once everyone had an alpaca who wanted one, the value of the breeding stock became significantly less and alpacas no longer were being touted as a way to get rich. Similarly, cryptocurrency has no value except what one can buy with it. The seller will always control the value of the currency. The value of the specific cryptocurrency is not tied to any specific item or economy. It floats somewhere in the cloud finding what value it can find. Trying to regulate or monitor the activities of private individuals who intentionally work outside the banking system utilizing something that cannot be defined or measured seems a pointless and perhaps impossible task.

If investors want some security - then they need to invest in systems that are regulated and monitored by agencies that are created using our tax dollars. If you want to get rich quick by gambling - feel free but don't come whining to me when you need assistance.

On a secondary note, the cryptocurrency economy uses a huge amount of electricity to run the computers. CBC noted that " A new study investigated how the energy consumed by these two processes compared, and found that crypto mining can use more than four times as much energy, for value produced, as mining for real resources like gold, copper, and platinum.". (1)

All in all, cryptocurrency seems like something the self-proclaimed elite use just to prove that they are different and therefore better than the rest of us. Pretty typical - use our collective resources (e.g. energy) to make money for themselves but then demand that someone protect them when it doesn't work out the way that they planned.

(1) https://www.cbc.ca/radio/quirks/bitcoin-s-energy-costs-beatboxers-invent-new-sounds-wind-farms-change-lizards-and-more-1.4897314/bitcoin-mining-uses-more-energy-than-mining-for-real-gold-1.4897333