The New York Times printed an article today
This article is long and confusing, but I thought it was about time I understood cryptocurrencies. I found this quite one-sided even to my relatively uneducated mind. Where were the facts and data about the use of such currencies for fraud, ransomware attacks, money laundering and others I did know about? So I sought knowledge in the COMMENTS section and found it!
Cryptocurrencies are an attempt by powerful private interests to wrest control over the creation of money from national governments. In the U.S., that power is vested in the Federal Reserve Bank, which is responsible for creating as much money as is necessary to support economic growth yet avoid damaging inflation. The Fed reports directly to the Congress, and the dollar has the implicit backing of the Congressional “power of the purse,” the ability to tax if necessary to support the currency.
This system has worked well for the past century. Now come secretive, powerful interests creating cryptocurrencies to rival the dollar. They’ve developed a very high barrier to entry for anyone who wants to create a cryptocurrency; the act of creation requires increasingly-ruinous amounts of computer power. What they refuse to provide is a lender of last resort behind their cryptocurrencies. There is no Federal Reserve, no Congress, no taxing power, and scarcely any legal security supporting these currencies. A U.S. dollar has printed on it the motto “In God We Trust,” and the assurance that “This note is legal tender for all debts, public and private.”
The motto on a cryptocurrency is “In the Internet We Trust.” That’s like trusting all of your financial wealth to Zuckerberg, Bezos, and untold shadowy oligarchs in China and Russia.
Taking control over money is the last great frontier for billionaire capitalists, and that’s what cryptocurrencies are designed to do.
This sounds like someone trying to explain the combustion motor to a layman, in the 19th century: “Don’t mind all that noise and smoke, don’t worry about ‘fossil fuels’ or pollution, look at how amazing this thing is! I’m sure once the technology matures, we will solve all these problems.” Well, we solved the noise problem.
So many people, under the age of 40, are impressively active when it comes to global warming. Yet even Ezra Klein can drop a bomb like “Bitcoin and Ethereum together consume about as much electric energy annually as Indonesia,” then proceed to defend all the “possibilities” of the tech… because it’s internet tech (the nectar of youth).
Downtown Verona, NJ6h ago
The job of government is, among other things, to:
- Protect the public from fraudsters, scam artists and grifters
- Collect taxes on economic activity to help fund a decent civilization
That demands sensible oversight and regulation of cryptocurrencies. Industry self-regulation has been an epic failure that leads directly to investment bubbles and economic calamity.
Congress should start by passing a law requiring every cryptocurrency operator to submit quarterly ‘plain English’ operating plans explaining how they intend to pay their account holders their balances should account holders want to all withdraw their balances.
Additionally, an annual tax reporting requirement for all crypto operators is hardly a burden and must be a basic requirement for tax compliance purposes. Common sense regulation is common sense. Those opposing common sense…and the common good that common sense regulation serves….are scammers.
CNN News just reported that one of the politicians who did not want government over-site, just acquired millions (I think) because his wife bought them!
The surprising thing about this is I worked in the Legal Department of Washington Mutual Bank in Los Angeles when Killinger was the president. I especially remember this temporary three month job because the department threw me a going-away party – something never done before for a temporary secretary – off to teach English in 1984 – to Saudi Arabia!