One of my favorite novels is Neal Stephenson's Cryptonomicon. The book has 2 interconnected threads. The first centers on the WWII cryptanalysis efforts by the British at Bletchley Park and the American code-breakers against the Japanese. The second is the prescient concept of modern day crypto... computer technology to build an underground data haven in the fictional Sultanate of Kinakuta, interestingly termed "The Crypt", with the goal to facilitate anonymous Internet banking using electronic money
The read is a commitment - over 900 pages - but if you start it be prepared for trading sleep for reading. The book was published in 1999 and presages the cryptocurrency craze we see today.
While on this topic, do you understand cryptocurrency? If so, please explain the value prop to me. Admittedly, I am a curmudgeon, but I fail to see the benefit. Does the world really need another currency and particularly one without any regulation behind it at that. Cryptocurrency is decentralized, meaning it's distributed and not controlled by one central authority.You can’t jingle bitcoins in your pocket. It is a virtual currency and the foxhole for greedy manipulators. It is a way of transferring “funds” quickly and anonymously, which plays perfectly with criminal types doing transactions on the dark web in weapons, human trafficking and other nefarious practices which I can only imagine. But if that is prevalent, perhaps we have gone astray and "regulation" should be considered.
How does it work? A crypto transaction uses blockchain technology utilizing a network of computers (nodes). Each node independently performs some role in verifying, recording and validating the transaction. The result of a cryptocurrency transaction is "simply" an unchangeable data entry on a ledger - a blockchain. These blocks are permanent making it impossible to change the information in the completed transaction, and also impossible to trace the source.
These transactions consume enormous compute resources as each node needs to solve a "puzzle" as part of its role. This demand has led to the explosion of data centers to support it - AI as well - and is overwhelming our electrical grid. Prepare for brownouts and kerosene lamps.
In my view, this is yet another way to try to get rich without having produce anything or work too hard, a swindler's paradise that includes the Grifter in Chief. Many crypto users shun it as a transaction tool, but rather use it as as an investment vehicle, a digital bank like gold in a vault. Your digital wallet is an app (don't forget your password). So as you watch your crypto wallet fatten day by day, beware. This is reminiscent of 1929 Wall Street.
If this all sounds pessimistic, it's because I am. What ever happened to entrepreneurs? In my career I was involved in 2 startup companies and the goal each time was to actually produce something beneficial to mankind. How we have fallen, where threats and bribery and phantom money pass for normalcy.
Copyright © 2025 Dave Hoplin
I'm on the same page with pretty much everything you put here. Crypto has its roots in criminality. It became a profit center - a pump-and-dump that has had legs sufficient to go a really long while before the dump - and thus appealed to non-criminal greed. Now we've got legitimate financial institutions with a significant stake. At some point the merry-go-round will stop - "oops we lost the password to our server and we don't know what anyone's balance is" - and the falling dominoes stand a chance of making 1929-45 look like a blip. Probably explains the price of gold doubling in the past two years; if I were of a certain younger age, for investment I might think in terms of 50% in crypto and 50% in gold (some of it in physical form stashed somewhere I thought to be safe), to ride the one wave as long as it lasts and then rely on the safe haven afterward.
ReplyDeleteAnd fund your New Zealand bunker
DeleteMssrs. D.H. & J.G. nail it. Let me add only that the criminality is hardly gone, and recent presidential pardons of same have hardly helped (what are those going for these days?). Large political contributions have helped stoke the fire. Adding to the appeal is the prospect of anonymity (largely false), money laundering (better ways exist), and tax dodging (more believable while IRS investigators remain hobbled). Don't take the amusing 50/50 gold/crypto hedge too seriously, kids; take some courses on how to build shelter and forage for food instead.
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