I have a complicated relationship with cryptocurrency.
I really want to like it, but perhaps that’s just the cyberlibertarian - the optimist, the tech utopianist - in me talking.
I don’t like the control that payment service providers have, or their ability to break a business by withdrawing services. Yet they are private companies, and so - IMHO - it is up to them to whom they wish to offer their services.
I would like a payment system which anyone can use, including to run their business, without fear of having the rug being pulled from under their feet and their account closed. A system without centralised control. A system without the fear of a freezing order.
I don’t like the way a bank or card provider can surveil one’s purchases, or engage in data mining. I am a person, not a data point, and an intermediary such as a payment provider should have no business in taking a peek at what I buy, or from whom.
I would like a payment system which precluded this kind of surveillance, so that any intermediary - if there must be one - has not just no business in inspecting my transactions, but no ability to do so.
Yes, I appreciate that an anonymous, unblockable, means of payment could be - is likely to be - abused. Does that mean it is a bad idea?
After all, so many things can be abused. Computers. Cars. Clothes. Water. Do we have an obligation - legal? moral? ethical? - to attempt to design things to minimise the risk of abuse, even if that means compromising on useful features?
I like the peer-to-peer nature of cash. A system which facilitated direct, peer-to-peer payments would be ideal, IMHO. Is that compatible with a cryptocurrency?
As far as I know, cryptocurrencies today involve some kind of register, on which transactions are recorded. I could avoid that, by giving someone my wallet but, without checking that central record, would the recipient know whether what was in that wallet had any value?
I like the fact that I can pay face-to-face in cash without needing an Internet connection. (Well, in principle. In practice, I don’t do much shopping face-to-face.) Perhaps - register look-up aside - that could be handled by a wireless protocol within a hardware wallet.
I don’t like the inability to pay remotely with cash. I’d like a cryptocurrency where I could pay both locally / in-person, and remotely, with the same ease.
Like cash, I am willing to take the risk associated with theft, or a scam. If I hand over cash to a scammer, I don’t expect to get it back. If I mis-manage my key, just as if I mis-manage my coins, I don’t expect someone to step in and recompense me.
But this means I’m likely to use cryptocurrency only in relatively small amounts, a bit like drawing cash from a bank account. I might be willing to take the risk in small amounts, but not much more than that. So I think I like the idea of cryptocurrency alongside more traditional banking. But then I’m lucky to have ready access to banking.
I don’t like the environmental implications of Bitcoin. The colossal energy usage. It’s unsustainable.
I don’t like the feeling I have that cryptocurrencies are a Ponzi scheme: that they only work if people keep joining, and committing their money. Perhaps I just don’t understand them well enough.
I don’t like the uncertainty I have around value. I have spent around £100 on Bitcoin. Of that, I have spent around £20. So why do I have £450 of Bitcoin? That growth is massive - over 450%.
If it can go up like that, why should it not also go down? As a currency, I want the value to remain reasonably constant.
I want to know what the things in my wallet can buy me, with a reasonably degree of certainty.
And if I want to get paid in cryptocurrency, I need to know if I should charge 50, 500, or 5000, of whatever it is.
And I don’t want to find that I’ve asked for 50 when I started the work, but need to ask for 5000 at the end of the work, to get the same relative payment. I could link it to a fiat currency - that I want £x worth of cryptocurrency - but something in me doesn’t like that idea.
I also need to be able to buy enough things in cryptocurrency to justify taking them for payment. I don’t want to be trapped in a world of conversion charges.
I like the fact that I can buy anything in the UK using pounds sterling. I don’t like the idea that I might only have cryptocurrency A, but the person with whom I am transacting only has cryptocurrency B. While diversification may be good for some things, it is a pain when it comes to exchanges. That is, in essence, why we have money: so that I don’t have to find someone who is willing to sell me the wheat I want in exchange for the ox I am willing to offer in return, for example. If I am forced through a conversion system, that’s sub-optimal.
So even if there is a cryptocurrency which solves my problems, unless it also solves everyone else’s problems such that it is commonly adopted - or, at least, that enough people with whom I want to transact adopt it - it’s sub-optimal. We’re back to the network effect which plagued early communications networks.
So, yes. Complicated.