Crypto use cases

There are some legitimate use cases where it can (but does not currently) provide a better economic value than centralized counterparts, such as market-making, contract enforcement, and (to an extent) privacy.

Abuse of crypto

I abhor the fact that the silliness, tech-forwardness, and gambling-esque nature of some platforms (especially NFTs) allow people to handwave away the seriousness of fraud, theft, and money laundering. Economic violence can just be as damaging as physical violence.

Example: significant amounts of activity on crypto exchanges is wash trading, which is illegal and skews volume information in traditional markets. 1

Effect on society

I worry that increased mainstream adoption will exacerbate inequalities between the haves and the have-nots, as it becomes very easy to take advantage of uninformed market participants due the lack of regulation.

People can have extremely liberal views in “real-life” but extremely libertarian (even anarchistic) views in crypto-land. Similarly, people can have very Keynesian economic views but subscribe to Bitcoin which is effectively the gold standard. The dissonance is palpable.

Creating an equitable and safe platform

Reversibility of transactions (righting economic wrongs), fixing hacks and fatal flaws in a decentralized blockchain, and the whole idea of a stable, usable currency, are not yet realized. There’s a lot of activity on the 3rd but feedback loops are too slow on 1st and 2nd.

  1. Cong, L. W., Li, X., Tang, K., & Yang, Y. (2019). Crypto Wash Trading. SSRN Electronic Journal. doi.org/10.2139/s… ↩︎