In the wake of several recent debacles, noises are starting to appear in the mainstream press suggesting the end of cryptocurrency could be in sight:
Activity is lessening.
The total value of the world’s cryptocurrencies tracked by data company CoinMarketCap is now around $850 billion, down from $3 trillion a year ago. The average value of cryptocurrency trades per day has fallen from $131 billion in May to $57 billion in December — a drop of more than half, according to CoinGecko.
Bitcoin’s value has plummeted 65 percent this year, to around $17,500, although that’s still more than it was worth for the majority of its existence.
And value.
Looking a bit shabby, I fear.
But so what? The questions are what are the trends, the tangible advantages and disadvantages, what is the sentiment?
I’m disinclined to vigorously dispute the subtle suggestion that cryptocurrencies are on the way out. The use of technology, particularly exciting new technologies and clever ideas[1] to attempt to resolve a problem, be it policy, social, or otherwise, is neither new nor surprising; only the nature of the sexy problem is really changing. In this case, getting corruptible government out of the business of controlling currencies seemed clever enough.
But I think the nature of the problem was, and still is, really misunderstood, and the project driven by a fundamental mistrust of governments, which is not entirely without foundation. But attempting to circumvent government, rather than recognize that it has positive attributes that should be cultivated, and the general enterprise improved and properly managed, is, I think, a misapplication of technology.
There goes one now! Look at those metallic tentacles!
Unless you are one of the few looking forward to the appearance of our robotic overlords.
Cryptocurrencies may be the miserable grandchild of President Reagan’s remark that … government is not the solution to our problem; government is the problem, which is, notably, slightly out of context, but mistakenly taken to be ideological kant by far too many people. I do suspect this is coming into focus for a lot of people, if only due to the grift and neglect to regulate the industry by, ah, government. In the end, the rampant corruption that appears to infest the industry may be an object lesson concerning the importance of government in the face of humanity’s indifference to ethics and morality, not to mention the inapplicability of Reagan’s quote to most situations.
Which will be summarily ignored by all those infected by paranoia or profiting from crypto. Not only the individual grifters, but national adversaries such as ransomware purveyors and users. The crash of crypto may put quite a few bad actors out of business.
1 Make no mistake, production of tokens, or coins, through “mining,” which is generally the process of solving complex problems that become harder over time, seemed clever back then. The entire “It sucks up how much energy?” problem with mining, at least in the proof-of-work mining paradigm, is not a matter of “they should have seen it coming,” but instead a common, if unrecognized, problem in the entire software industry, because energy consumption of algorithms, or implementations thereof, is not a topic of conversation for “coders” or for software engineers, or at least not that I’ve ever heard, excepting maybe in cryptocurrency mining, in AI, in the auto-driver algorithms of cars, where a drain on batteries is currently a real problem, and meteorological forecasting models, which naturally work on huge datasets fairly quickly.
There are other mining paradigms, such as proof-of-space (how many hard drives do you own?), but this is, again, consumption-oriented. I am not plugged into the cryptocurrency implementation community, so I don’t know the answer to this question: Rather than using paradigms that fall into the consumption or extraction category, are there any paradigms that could be properly placed in a category labeled production or contributing?
