Missing the Point about Crypto

Bitcoin has received a lot of bad press lately, all of it centred around two points on my list of why Bitcoin isn't money. However, the criticism fails to hit the mark on both counts. The fundamental issues are not addressed. Instead, there's a focus on secondary issues. Bitcoin uses too much energy, according to some, and it's inferior to Ether, according to others. The discussions that have followed have all been about what's too much energy, and why Bitcoin or Ether are the best. No-one seems concerned that we're having these discussions at all.

The problem with Bitcoin isn't that it's using too much energy, but that it requires energy at all. Money, once produced, should have no cost directly associated with it, because money is a storage vehicle. No-one should worry about storage cost on their money unless they have so much of it that it requires professional assistance.

The fact that Bitcoin requires electricity and high tech equipment in order to remain in existence is a big red flag, especially because these costs are carried by Bitcoin miners, rather than Bitcoin owners. The owners have no direct control over the network and the machines on which their tokens reside. They are entirely dependent on third party actors to stay in the game.

The issue is not about too much energy. It's not primarily an environmental issue. It's a fundamental issue related to energy use and technology, and the fact that no-one can ever hold a Bitcoin in their hand. Bitcoin will for ever be dependent on external factors related to energy and technology.

Similarly for the Bitcoin vs. Ether debate. It's irrelevant which one is the better token. The fact that we have this debate at all is the red flag. People are debating "money" on the basis of technology. This merely proves the point that technology cannot be money. Technology has a relatively short life span. There are always improvements made, making old technology obsolete and useless.

Real money can be stored for thousands of years and still retain purchasing power. Technology comes and goes in the span of decades. All crypto, regardless of technology, are useless as long term stores of purchasing power. It's therefore a meaningless distraction to debate the relative merits of one crypto-currency over another.

Cryptocurrency mining farm

By Marco Krohn - Own work, CC BY-SA 4.0, Link