The depth of the split in opinions is so great that even the very concept of “cryptocurrency” is questionable, but is it the currency? Maybe virtual money is really a financial pyramid not backed up by anything more than human greed, just like ignorance? At the same time, over the past 10 years, from a little-known event in narrow circles, the same bitcoin has become, in fact, a full-fledged tool for conducting money transactions, thereby bringing real benefits to real people. And this benefit is not purely speculative, because the very principle of the blockchain, which is the basis of cryptocurrencies, provides unique functionality for which many see the future. What point of view will win? Will the usual dollar and euro replace the new type of money? Will Bitcoin become the world's reserve currency, or will it sink into oblivion, becoming the next section to the ode to human stupidity? About this discussion the article will go further.
Money
By and large, anything can play the role of money, even those items that do not have a nominal value, which we observe everywhere in the modern world. The days of the silver and gold standard have long passed, money ceased to be minted from expensive metals and actually replaced them with paper (the main source of cellulose - wood) analogues. However, do not forget that today the main world currencies, one way or another, are provided with a certain equivalent of the face value declared on the banknotes we are holders of. The exchange rate of national currencies has now become more likely tied not to the “bins of the motherland” stuffed with good, but to the actual state of the economy, with all the positive / negative consequences that follow from here.
When we talk about cryptocurrency, many of us call it electronic / digital money, but how correct is it? For example, in the description of Bitcoin, from Satoshi Nakamoto himself, the alleged founder of the currency, the name “Electronic Cash” appears, which literally sounds like “Electronic cash”. But what then is WebMoney, Qiwi and Yandex.Money? What is the difference between these types of currencies, which are basically all electronic?
The concept of virtual currencies appeared long before the legendary Satoshi Nakamoto, Yandex and WebMoney, even before the widespread introduction of such a concept as electricity, back in 1600 . Virtuality is betrayed by money not so much the technology of manufacturing / functioning of the latter, as the very principle of substituting the real value of a valuable equivalent with a monetary sign, the actual price of which tends to zero. In this context, all virtual currencies that existed before the introduction of the blockchain principles differed only in terms of technological level. It was blockchain that became the rubicon that separated classic non-cash money using electronic terminals from a new type of payment medium such as Bitcoin, Ethereum and similar cryptocurrencies. Thus, according to Satoshi Nakamoto, having taken away the right to be called electronic money from his non-cash predecessors.
Blockchain monetization
From the point of view of technology, there is nothing revolutionary in the blockchain. The novelty of technology is manifested rather in the combination of two principles: decentralization and succession of the formed blocks. A decentralized system with a distributed database, the principle of operation is akin to the good old torrent, makes it possible to operate cryptocurrencies without a single center of influence, which in turn makes the system immune to local interferences in its functioning. The very essence of constructing the structural units of the blockchain - blocks, virtually eliminates the possibility of substitution, unauthorized correction of existing transactions, because, after the verification procedure, each subsequent generated block contains records about everything that precedes it.
Having at our disposal a system protected from local fraud, unique blocks that cannot be faked, encryption, which ensures anonymity to cryptocurrency holders, potentially instant payments without intermediaries, did we get the perfect currency? Unfortunately not.
21st Century Gold
At the threshold of the birth of the first cryptocurrency - Bitcoin, it was announced that the total number of coins planned for release is limited to 21 million. Such a PR move was to become decisive in determining the price of cryptocurrency, because the complexity of generating new coins, as well as their limit, should have removed the inflationary risks of money and made them an excellent tool for preserving the funds invested in them. The beauty of the idea was impressive.
Comparison of the cue ball and gold is still not uncommon, it especially sounded realistic when the price of cryptocurrencies exceeded the mark of $ 20,000 per unit on electronic exchanges. At the same time, the founders of the main cryptocurrency competitor Bitcoin - Ethereum, did not at all limit the release of their currency to any maximum limit, which however did not prevent him from overcoming the threshold of $ 1,400 per unit in the price peaks. Thus, the absurdity in any limits of the issued crypt was shown.
And what are we worse?
At the moment, in the world there is a set of goods and services for which you can directly pay with cryptocurrency, but this list is rather scarce and uniquely specific. Direct payments by bitcoins and ethereum appear in a narrow circle of the miners themselves. You can realize your cryptocapital for the purchase of equipment for its extraction, but it is impossible to pay off in a grocery store, as before. A separate history of cryptocurrency has become its anonymity. Despite the fact that the database of transactions between individual wallets is public, it is extremely difficult to associate a specific wallet with a living person, and frankly criminal elements began to use it. And this circumstance completely obscured the already not too light image of the currency of the “future”, as we had painted it more than 10 years ago.
None of the existing cryptocurrencies, so far, has become a full-fledged means of payment. But at the same time, some of them are still convertible, having paid a number of commissions, virtual money can be embodied in much more real dollars, euros, and rubles. But even this did not give crypto money a special material binding, and left them solely as a measure of speculative excitement. The ups and downs of the BTC / USD pair until now have a lasting impression on the not very mature minds of random investors.
Why do miners still exist, and why are they still investing not a small amount of money in equipment and electricity bills necessary for the production and maintenance of cryptocurrencies? To a large extent, this is the inertia of the invested funds. Information promotion, by the happy owners of ephemeral capital, to attract new adherents to the network, is still bearing fruit.
Sergey Panteleevich approves
If, in general, the same respectable figures speculating on the conditional value of rare brands, unique paintings or simply collection wines can use their objects of desire for their intended purpose, then the value of cryptocurrency is absolutely abstract, turning it into refined greed.
Ecology
Perhaps the most outrageous camp of haters "crypto insanity" is the question of mining itself. The original idea was pure as a tear. Since the cryptocurrency system was planned as decentralized, the costs of maintaining it were also scattered to all its participants, each client terminal makes the necessary calculations for the functioning of the digital currency. As an incentive, compensation for the resources spent by Bitcoin users, a system for distributing generated coins was invented. But the catch of this move was that, although the payment for services was distributed evenly among all mining participants, it did not limit the total number of terminals involved in maintaining the network, nor did the load on them. On the one hand, this property made the system extremely stable, however, excessive redundancy of calculations led to an insane waste of resources.
According to Cambridge University staff, the energy consumption of miners, only one cryptocurrency - Bitcoin, is at the level of 10 gigawatts . It is worth recalling that the most widespread, in the vast expanses of the former USSR, model of the VVER-1000 nuclear reactor has a rated power of 1 gigawat. If we compare this energy consumption with the real sector of the economy - so much taken individually by the Czech Republic, Austria or Switzerland, countries with almost 10 million people.
After all, the idea was good!
Like most altruistic ideas about the common good, 10 years of the existence of cryptocurrencies have shown their complete inconsistency as a universal payment instrument. There were times when the concept of creating ethereum could raise about $ 18 million on crowdfunding. Current attempts to announce to the world the creation of another cryptocurrency are faced with more and more serious obstacles. What are the recent ones: the US court’s ban on the use of the cryptocurrency of Pavel Durov - Gram and the actual failure to implement another newly made crypto from Mark Zuckerberg - Libra.
Against the backdrop of the recent refusal to participate in the Libra project of such payment services as Visa and MasterCard, Mark Zuckerberg’s position is becoming increasingly precarious. “Facebook will abandon the idea of launching Libra if financial regulators in the US do not approve of it,” Mark said at a hearing on the House’s House Financial Services Committee on October 23 this year. "I want to clarify. Creating Libra does not pursue the idea of creating an independent financial system. It should be a means of instant money transfers. The existing financial infrastructure does not meet the needs of people: quickly, and most importantly, send money safely around the world. Facebook can help people send money home , to your family, is as simple as it is with text messaging, " Mark said. But it is not 2008 already on the street, and it is doubtful that someone else is ready to perceive Mark's words at face value.
An entrepreneur Oleg Tinkov spoke more bluntly on this topic: “ The failure of Libra and Ton put a bullet in the era of cryptocurrencies. It is obvious that all smart people or at least realists understood that no crypto would win any currencies. Our generation, who grew up on the Lennon’s lyrics , where he suggested “dreaming about a world without religions, borders and property”, life has long knocked this whim out of my head ... Peter Aven said that he would believe in cryptocurrency only if it could be paid taxes - I agree, but I would add that she will fly only then and will be fully under the control of the US equity, that will not threaten the dollar. Then controlled by the Libra will need to further adapt to the world, but we know how Americans can apply its laws extraterritorially and they can impose. " Tinkov also did not flatter about the adherents of the crypt: “ Unfortunately, there are millions of idiots in the world who believe that you can multiply your fortune by TIMES without doing anything, but simply by buying a token, which is then sold several times more expensive. . ". In confirmation of the last words of Oleg Tinkov, it can be noted that the financial pyramids were not invented in the current century, and it is not visible in it that they will disappear.
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