The question continues to ring true, at least in my ears.
But for all the hype, there’s scant evidence that digital currencies stand on the threshold of some kind of mainstream breakthrough. While a recent Pew Research Center survey found that 16 percent of Americans have used cryptocurrency in some way, most buy it as a speculative investment, not for its originally intended purpose — as a way to pay for goods and services.
“It’s not happening,” Dan Dolev, a financial technology analyst for Mizuho Securities, said of the notion that crypto is replacing cold hard cash. “I wouldn’t even try to quantify it because it’s so insignificant. People are buying crypto because they think it can only go up. Or because they’ve heard it’s the future. Or because they don’t know why they’re buying it.” [WaPo]
For all the hype, yes, I think it’s true: hype. This continues to exhibit the signs of, well, to be quite frank after 30 years of investing or more, a pump and dump scheme. One red flag is the appearance of a lack of utility, as in either no real product or a very questionable product, and as I’ve noted before, I fail to see the unique and indispensable utility cryptocurrency brings to the financial landscape. The other big red flag? The big talkers talking it up:
Billionaire tech executive Michael Saylor has called bitcoin “the seminal invention of the human race.” His website describes it as “a bank in cyberspace” offering a “simple, & secure savings account to billions of people.” He recently claimed ownership of 17,732 bitcoin worth about $740 million.
Simple & secure, yet it depends on the continued existence and availability of the Internet. The latter is a big question mark, isn’t it, and there are times when I wonder if the Internet is really worth its trouble. He glosses more than one crack in the cement. And it appears he doesn’t do it well:
But one thing Saylor cannot do with bitcoin is pay for the $18 shrimp cocktail at Tony and Joe’s Seafood Place several floors below his penthouse apartment on Washington’s Georgetown waterfront. Though Tony and Joe’s has an ATM that can convert cash into bitcoin, the restaurant won’t accept it.
“I would take Monopoly money before I took cryptocurrency,” said a manager, who declined to give his name.
Whoever this manager is, he may not have Saylor’s billions, but he’s the one who has to make his business run. I find it telling that he, along with millions of other people, aren’t interested in cryptocurrency as a basic currency, but only, if even that, as a wildly speculative investment.
