Yesterday I watched a report about cryptocurrencies on a Spanish TV channel. Even though the reporters tried to take an impartial approach, the topic was covered in a superficial way and ends up confusing the ‘part with the whole’ as every time cryptocurrencies are mentioned on TV.
"Nowadays there are many cryptocurrencies. The best known is the Bitcoin."
Once again, this sentence is used to continue presenting Bitcoin as an example of all cryptocurrencies and incurring, wittingly or unwittingly, in terrible mistakes. I think they should change the name of the report 'all about cryptocurrencies' to 'all about Bitcoin', which is not the same thing. If all cryptocurrencies are not the same as Bitcoin, why always take Bitcoin as an example of all of them? Taking Bitcoin as an example, the report stated some things that I would like to think about (and get your opinion, whether you agree or not).
Cryptocurrencies were born with an idea of becoming the people's money, but the truth is that they have become cryptoassets for speculation
Undoubtedly, some cryptocurrencies are not having a real use as currency, basically because their networks and theirs costs do not allow it. Therefore, it is clear that they are used to invest in them for speculative purposes. Bitcoin is purchased as a store of value, and not for its use as a currency.
But it is also undoubtedly that other cryptocurrencies, such as Bitcoin Cash, are being used in everyday life, fulfilling their promise of becoming the people's money. So It is not true that all cryptocurrencies have become cryptoassets for speculation.
Cryptocurrencies are used by criminal networks, since they allow their use anonymously and without any entity's control.
Sure, some criminal networks may employ cryptocurrencies for different purposes. But what is even more certain is that most criminal activities are not financed by cryptocurrencies and they do not use them to launder money. They use FIAT money, corporate structures and banks in tax havens under the name of entities or persons that do not exist or are difficult to trace.
On the other hand, it is easy to mask a large operation in a blockchain full of large operations. But a large capital operation moving from side to side would attract too much attention in a network that is used by the common people to use their money. Among millions of daily micro-transactions, a movement of large capitals has to be very notorious and recognizable. So it is not true that Cryptocurrencies, at least not all of them, are best choice for criminal operations.
Cryptocurrencies are not the social currency they promised to be, except in some cases and with great limitations.
Of course, if we are talking about Bitcoin, this statement is obvious. But what about other cryptocurrencies? There are institutions with affiliated businesses that use cryptocurrencies for local commercial development.
But even others not controlled by any institution, like Bitcoin Cash are triggering some local commercial development, where public institutions and banking entities have failed. For example, large sectors of the Latin American population, especially those involved in local commerce, have found a little breath of fresh air in Bitcoin Cash in order to be able to continue their activities. In other words, Bitcoin Cash has become a helping hand to continue with their commercial activity and with the generation of small jobs, in states where, ideologies aside, the economy has collapsed.
Cryptocurrencies are the neoliberal economy's dream come true to finish with the welfare state.
This is the most conflicting point for me. I am one of those people who accept to pay high taxes but demand that they are properly employed in what they are intended for (perhaps I am a not very intelligent person).
It is true that a completely free economic system, without restrictions and without any democratically legitimized institution to regulate it, poses a great threat to the sustainability of a public system that guarantees the most basic goods and services (education, health, housing...). In short, for a system that guarantees a minimum of human dignity (included in the Charter of Human Rights).
That is why I believe that Public Institutions (especially the governments, but not only) are making a mistake by allowing themselves to be influenced by banks and other lobbies that pressure them because they see a threat in cryptocurrencies.
I think they should accept the progress they represent and try to participate in this new system, suggesting a new way of collecting taxes to support public services.
But in fact, the collapse of public services has nothing to do with the 'type of currency' used, but with corruption and with the bad management of public money. There are a lot of awful cases of political corruption around the world, which have nothing to do with cryptocurrencies, but with FIAT money. At the end, they get public money and then they accumulate it privately and in large amounts in some tax haven. It is this, that kills public services and collapses any minimally social system. Not cryptocurrencies.
Blockchain technology, on the other hand, has no tax havens. All amounts are traceable. There are no corporate networks or international laws to be used as a shield. There are no tax havens in the blockchain.
This allows, if anyone will, an audit of public resources and total transparency in the management of the money that belongs to everyone by the public administrations.
Curiously, in this upside-down world, it is the administration that audits our private money, instead of us auditing the public money they manage (sometimes in such opaque ways).
I don't know what you think, but as for me, I am still waiting for a report about cryptocurrencies that goes a little deeper into these differences before extending its conclusions about Bitcoin to the whole crypto universe.