Crypto As National Currency? Maybe Not A Good Idea
Herald-Mail, The (Hagerstown, MD)
The world's also-ran nations are always looking for an angle, be it as a tax haven, an opaque repository of foreign assets or as home to some oddball tourist attraction, like swallows or sea turtles.
El Salvador, trying to get the jump on other nations, decided it could make a splash on the world scene by being the Bubba of Bitcoin. Whoops. It made a splash all right, the same sort of splash a dead sailor makes when they throw him overboard.
The financially beleaguered nation went all-in on cryptocurrency in September by making Bitcoin its national currency and floating a $1 billion crypto bond.
In other words, El Salvador took its entire economy to Las Vegas and put it on red. And we all know what happened. Actually, El Salvador is lucky. Bitcoin is only down 50%. Some went entirely down the flume. If you had $1 million in Luna yesterday, today you don't even have enough to buy a ham sandwich.
Fortune favors the – RUN FOR YOUR LIVES!
What? You mean a financial investment hyped by Mike Tyson and Kim Kardashian turned out to be a sham? No.
Employing someone, who has famously blown through multiple fortunes, as a pitchman for financial planning is, even by American standards, nutty beyond belief.
Normal Ohioans meanwhile have to be breathing a sigh of relief that Republican voters rejected the senatorial candidate who wanted to make the state "pro-God, pro-family, pro-Bitcoin."
Because nothing says "family" like rooting around in a dumpster together searching for fish bones. And how you equate God with Bitcoin, I can't even begin to say. It wasn't like Jesus cast the money changers out of the temple so he could put his cash into Ethereum.
None of this is unique to the American condition, obviously. In the 19th century, a horse-drawn wagon would roll into dusty backroad communities and talk its citizens into spending their last three cents on Dr. Caldwell's Syrup Pepsin instead of groceries.
Last century it was penny stocks. You could buy 50,000 shares of Cressen Consolidated Mining and Milling Co., and maybe a year later you would get notice as an official registered shareholder that aforementioned entity was now officially insolvent and had liquidated off its last remaining assets, which at that point amounted to six folding metal chairs and half a jar of Sanka.
Very, very infrequently, one of these companies would turn into Microsoft, at which point the lucky investor would – being all too aware of the odds – stop investing and start selling a correspondence course advertised in the back of Popular Mechanics magazine with a guy in a plaid suit saying, "I made a zillion dollars in penny stocks and you can too!"
Can, but won't.
And sure enough, there is no shortage of true believers today. You can't swing a cat without hitting a cryptocurrency, none of which you've ever heard of, with names like Tron, ZCash, Tezos, Neo, Dash, Ox and literally thousands of others.
Hey, if it's your thing, knock yourself out. But most people are going to be reluctant to put their life savings into a global currency cooked up by a kid in his parents' garage wearing a T-shirt with Taco Bell stains.
I acknowledge these might be brilliant people. But the American monetary system is the one thing the government does really, really well. It dominates the globe. If the goal is to launder drug money or scam senior citizens, it might not be perfect, but if I put a dollar in the bank tonight I know it's going to be there tomorrow, which is a lot more than you can say for these geniuses who think they can do better.
So if they want to start a revolution, maybe they should focus their talents on something that actually needs fixing, like the health insurance industry or the Department of Motor Vehicles.