You have probably never heard of Stephen Diehl, but he is a financial expert who has studied crypto currencies for the last 15 years. In December last year he wrote in his blog (link here): Crypto is the ”commoditisation of populist anger, gambling and crime… …cryptocurrency is a giant scam, although a complicated scam . . . ”
He has argued that the prices of crypto assets are based on two things:
- There are people who believe all the hype, and also greater fools who continue to believe the hype. Most of the mainstream media have been writing articles about crypto currencies and blockchains as great innovations in FinTech. Many have jumped on this bandwagon. In April r this year, Tony Blair, Bill Clinton, Katy Perry, NFL star Tom Brady, and supermodel Gisele Bündchen were presented at a crypto currency conference in the Bahamas. If Tony and Bill are there, then why not me? Six months later billions of dollars are lost by these big crypto companies.
- Crypto money is mainly useful for dark money flows, money-laundering and crime. These users have created a demand for non-traceable financial assets that can be moved around without regulation to be used and laundered.Criminals, terrorists, authoritarian despots like Kim and Putin, and many wealthy folk who want to avoid paying taxes all love the convenience of crypto currencies at a massive cost to ordinary honest people. Let’s be clear, there is no useful purpose for cryptos to exist in the real economy. They are simply there for criminals, thieves, war mongers and rich people who do not want to pay their dues to society.
Now crypto exchanges have been hacked and gone bankrupt. They are not regulated even though they claim openly to be financial and investment vehicles. Our regulators should be strongly criticized for allowing them to proliferate. Lawmakers should have halted their growth and development because they are basically permitting a blooming of criminal activities that have no place in free and democratic societies.
Blockchain is claimed to be a great innovation because it connects actors who do not trust each other. But in this world banks must trust each other, any trustless banking network is redundant. Banks can share their data with other banks when they want to share with each other. Having many independent databases that are automatically kept in sync is a far more complicated than having one database that can be shared.
Furthermore mining for crypto currencies and blockchain solutions use massive amounts of electricity. This wasteful use of power is consumed for the benefits of criminals, despots and the rich who want to sponge of the rest of us…
The new boss who has taken over control of one bankrupt crypto company has stated that he has never seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information. This is of little surprise when you see banks suffering from regular problems due to weak regulation and poor management.
The best investments are your family, your education and your own job or company… crypto is a no-go area for all…
