| Is crypto a scam? It basically works as advertised, so technically it's not a scam. But the real question to consider is whether society is better off with crypto. Using cost-benefit analysis, we can draw up a simple balance sheet showing the positive benefits and the negative externalities: POSITIVE SOCIAL BENEFITS 1. Money can be transferred from one person to another without intermediaries such as banks. 2. It provides an alternative to hyper-inflating currencies in places like Venezuela. NEGATIVE SOCIAL COSTS 1. Data centers waste enormous amounts of energy mining crypto. 2. Crypto facilitates useless financial speculation and criminal activity, e.g., ransomware payments, illicit commerce, etc. In the final analysis, the benefits are rather small, whereas the costs are significant and will continue to grow as the crypto industry expands. |
Especially as people deal with real fiat currency. Let's say I am at a restaurant. I pay $200. My friend wants to give me $100 for their part of the bill. They'd have to convert $100 to 0.00115987 BTC. Transfer those to me and I convert 0.00115987BTC back to $100. This will incur losses. So I ain't even getting my money's worth.
Or alternatively my friend sends me a wire from their bank account to my bank account and I receive it within seconds. This is country dependent but e.g. here in HK FPS takes 2 seconds and costs nothing. SEPA Fast Payment in Europe is similar as is Australia's NPP or Singapore's FAST etc etc etc. For international my banks all provide free SWIFT transfers. Not instant, takes 1-2 days but hey. Free of charge send and receive for my bank accounts here.
It's a technical solution that can easily be done by banks and banking regulators and doesn't need another 'currency' as intermediary.