The general consensus (in my opinion), seems to be that its only real useful application had been in cryptocurrencies. From my view, cryptocurrencies are here to stay, but there is still a lot of dissent that crypto is a ponzi scheme or for fraudsters.
There are a lot of other great use-cases you're missing: Money laundering, circumventing sanctions (North Korean missile program is not gonna fund itself), buying drugs online, ransomware, assassination markets, illegal political donations, hard to trace bribery, and I'm sure a ton more.
But it's not fair to paint with too broad a brush.
It's just the 99% that give the 1% a bad name.
POW is bad for the planet and turned out to have issues in 50%+1 capture. POS is dependent on real world value and constrains behaviour to loss of stake.
Quorum, usually overlooked. Your transaction is final!! Not if the quorum decides to repudiate.
Forensic accountants love cryptos. I row with one who said evidence chains are delightful even with mixers.
Went to meetings on the chain a decade or so back and the fin regulators said its a great mechanism if you distrust your peers, need to co-relate and don't want a regulator in the transactions. So as settlement logic between central banks, or for certainty in complex supply chains where people repudiate the 90 day settlement they can help. Or where middlemen take bites out of transactions as they flow but regarding that, the big vig on transaction processing suggests nothing is free.
Merkle was smart. The logical structure is interesting for all kinds of things. PQC in dnnsec includes models using them.
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.
By replacing them with the intermediary of cryptocurrency exchanges and the blockchain itself - both of which charge fees on transfers which are often significantly higher than traditional banks. Is this actually a benefit?
> 2. It provides an alternative to hyper-inflating currencies in places like Venezuela.
Can you point to any evidence that cryptocurrency is actually used as a medium of exchange within these countries? Or is it primarily a means of capital flight?
WRT. negative social costs, I'd add that the anonymous and irreversible nature of cryptocurrency transactions leaves consumers with little to no recourse if they're scammed or make a mistake.
Your puny brain can't grasp the 4D chess here... it's just like how those Federal agencies are so bloated, that completely bypassing them will fix everything (hint: follow the money -- who's going to get rich when they replace the "bloated" middleman with their own infrastructure? In the case of crypto, it rhymes with boin-case).
In countries that have strict currency control so you can’t hold USD at all, wouldn’t those areas also prevent you from buying crypto?
Do Venezuela s banks not allow you to open an account for USD, but allow you to on ramp into crypto currencies?
So crypto helps as an alternative method of holding money. You can buy/sell in USDT over some wallet or exchange. Your wallet is your own, in your device. The government can make it illegal, but that doesn't mean they can stop you. It doesn't collapse, but there's always the risk of being robbed, as with cash or jewelry.
It often does not work as advertised. It is not an efficient form for transferring money compared to say, Wise. I used to be able to buy a game off Steam or a burger off a crypto wallet, but neither of these things are available today.
So the use case then becomes that they hodl on to something that increases in value in time. But that sounds a little like a scam as well.
Stablecoins are in actual use and not a scam, but they're effectively USD to USD, at a loss.
>Data centers waste enormous amounts of energy mining crypto.
is still as relevant in the era of proof of stake and such?
Which is to say... yes, I think cryptocurrency is a scam in 2025. I will say the same thing in 2030, and again in 2050, assuming nothing changes.
All the convenience and security of a bank account without the security or regulation.
People talk up crypto for being decentralized and then park their money in exchanges run by fraudsters…
"It's decentralized! Code is law! I own my wallet!"
*proceeds to use third party wallet service that handles 40% of all wallets and then gets mad when they're hacked and there's no recovery process".
I genuinely believe the vast majority of crypto proponents are financially illiterate.
As for having staying power, all kinds of scams have nonetheless enjoyed staying power (gambling, MLMs, scientology, major political parties).
1. People want to use government controlled moneybdue to the stability benefits:
* Stable value in short term
* Legal system can clawback money
* Banks have anti fraud system and some level of accountability
* Security is taken care of
2. Shops don't generally take crypto, they take fiat money
Crypto therefore services the world where these disadvantages are outweighed by advantages, which is mostly going to be various illegal or quasi legal activities or simply price speculation.
If I give wrong IBAN to someone good likelihood is that transactions fails and I keep money. Or I have at least some legal chance to claim it back.
That's because crypto solves no large scale problem that anyone legitimate has. The only large scale problem it solves is how to facilitate crime.
Just look at how people are effectively bribing Trump through crypto. We should immediately legislate all of this out of existence just like we got rid of other scams back in the day (like how banks used to mint their own currency).
Crypto solves lots of agency problems and makes those that promote it rich.
Gambling seems like the best comparison to me.
Gold barely solves any real problems, but it has a pretty active market. People readily buy it. The price fluctuates quite a bit (nothing compared to crypto though).
The utility of gold vs BTC is kinda moot--they're both good at a few things. They're a lot like gambling for the way most people get involved.
Some shitcoins seem like scams, but it's not inherent in the tech, and I don't feel like BTC is a scam for any reason. Sure, it's not a tangible asset, but you know that going in.
1. A lot of scammers launch crypto scams, rug pull tokens, phish/scam people out of their money. 2. Bitcoin is a hard, censorship resistant, permission less money. 3. Outside of Bitcoin, Crypto / blockchain is still experimental and looking for its usecase. We have seen smart contracts, tokenization of assets, NFTs and meme coins all being tried out here.
What makes it a scam is that there is nothing real behind it, but people think there is, so those who don't understand what is going on can get utterly and completely hosed while other people take their money.
Ethereum is probably the most interesting crypto currency. But most of the real life applications of Eth smart contracts are shitcoin pump and dump scheme.
I don't think crypto is a scam because you know exactly what you're getting. Done crypto finance ransomware gangs who attack hospitals and make their operations possible? Yes. Is it a scam? No.
crypto the industry is mostly built on magical thinking and grifting people tho
Most consumers holding crypto are doing so in the hopes of cashing out later, most (virtually all) retail investors barely understand what a blockchain even is, they're just random people who downloaded coinbase.
At the same time rug pulls and blatant fraud / money laundering / corruption has been enabled with this tech.
Memecoins etc. are frankly the financial wild west and with institutions like the SEC in the bin completely right now the average consumer has no business investing in crypto other than speculatively and, depending on the coin, with a pretty high risk of losing their investment.
As a technology it's interesting. I think NFTs was an interesting idea, looking for a problem to solve. Proof of ownership can still be substantial. Kickstarter was attempting to use it, but I think took the wrong attitude towards it. And selling NFT "art" was an exploitive get-rich-quick scam from the beginning.
Probably one of the more legit uses was CryptoKitties, where it used blockchain as proof of ownership for game pet generation.
The fact that backbone financial institutions are replacing their dinosaur infra with XRP is a big indication that crypto is here to stay.
All the arguments against crypto are still superficial and non-convincing. It seems like most financial institutions could be replaced by smart contracts. People who are into speculation also have a place away from the exclusive stocks club. Others who dont trust governments and banks have a solution now (truckers protest in Canada)..
We are somehow back to the "is internet a scam", or before it "is electricity a scam".. They are not, they are a necessary evolution to meet people'd needs.
