The beginning.

Stephen Diehl wrote a post called The Case Against Crypto. I'm going it and comment on content, reason, and logic of their assertions.

The Notes

The technology does not solve a real problem. The crypto project has had 13 years to try and find a problem to solve. It has not found one. 

This is simply not true, it does solve a problem, the bank problem. Banks extract a significant portion of the value that the money provided to them and could provide to its owners. Cars where invented in 1886 but was unable to see mass adoption until the Model T in 1908.

The real world has fundamental constraints that make the technology unworkable, whenever it has to interact with the outside world the benefits of decentralization disappear and the solutions end up simply recreating slower and worse versions of processes and structures that already exist.

There are fundamental limitations to the scalability of blockchain-based technologies... Taken as a whole the technology has no tangible benefits over simply using trusted parties and centralized databases.

They are currently worse versions of existing processes and structures, but so where the initial versions of the car and practically any new and fundamental world changing technology. The IPhone launch we as brilliant device that changed the world as we know it. The early versions of that like the Newton were terrible replacements for there counterparts. The fact of the matter is the the WinCE phones of the time where much more capable devices, but the IPhone was simply pretty and more responsive then those devices. There are limitations to the ability of blockchain technology to scale, but we have not reached that limit yet. Those "trusted" authorities and centralized database have shown time and time ago that they don't care about the people/information that they have in their care. Since they come with that baseline I would consider actively harmful to their people.

This is not innovation, this is technical regression and flirtation with ecological disaster in a time when we cannot afford to gamble our planet’s fate on pyramid schemes and dog memes.

But they still use less resources then the financial system does currently. So... which is better keep the banks or move to crypto?

So called “cryptocurrencies” aren’t actually currencies, and cannot fulfil the function of money. 

Money needs to have a reliable and stable value compared to a domestic basket of common goods and services, in order to achieve that the supply of the money needs to be controlled by a monetary authority which can expand or contract the supply according to market fluctuations.

While stability is nice calling the hodge-podge of currencies running around in the world today are hardly what I would call stable. Maybe they return to the mean more often then they leave it, but every time they do lives are destroyed. Not the people who caused the problems lives no its the common person that suffers.

A dynamic money supply is a fundamental necessity for a modern economy.

No, you can't have it both ways either money is dynamic or stable.

A small amount of inflation discourages hoarding and incentivizes investment into productive enterprises which grow the economy and produce prosperity. Conversely a static fixed money supply encouages hoarding, and is inflexible in times of crisis because it does not allow intervention. Economies do not stabilize themselves and require active intervention to curb recessions.

I have bad news for you every technology advancement causes deflation. That why we have phones that have computation abilities that where literally impossible in the 1950's in our pockets today. Since, technology will continue to advance at an ever increasing pace so will deflation.

In an environment in which multiple currencies can commingle there is a perverse incentive to create counterfeit currency or to create parallel currencies. Counterfeit currencies dilute trust in commerce, create counterparty risk and catalyze crime. Parallel currencies introduce exchange risk and create artificial barriers to commerce.

So, we agree there should only be one currency in the world and it should be the pre-war Iraqi Dinar. Seriously though crypto solves counterfeiting currency.

A single currency and single monetary authority is the inevitable role of the state because of its singular monopoly on taxation and justice.

Yeaaaah, they have historical done a great job not allowing those powers to corrupt them.

Under a gold standard, inflation, growth and the financial system were all less stable due to trade imbalances. This led to frequent recessions, larger swings in consumer prices and perpetual banking crises.

They can't do a run on a bank if your money not their to begin with.

... Conversely Europe largely did not engage in these corrective policies and this era saw the rise of populist strong men and fascists who promised to correct the wealth inequality of the common man, and ultimately plunged the continent into the most violent period in human history.

Are you trying to tell me you don't think this is happening to the world now? Please look around you. We are in this place now and your precious system hasn't prevented any of it.

The fixed-supply ideas of deflationary coins like Bitcoin fundamentally misinterpret the properties of fiat money as bugs when they are in fact features. The crypto project contains unresolvable logical and economic contradictions in its stated purpose. State controlled money embeds control and accountability for fiscal stability and market intervention in the democratic process where it inevitably and rightly belongs.

What since when where banks and other corporations a democratic processes? With Bitcoin and other cryptocoins you currently have accountability and control of your own money.

The history of private money is one of repeated disasters that destroy public trust. 

Do I have to say it again. Government and Corporations have also done a great job of destroying public trust.

... everytime private money has been tried in history it creates a form of corporate feudalism coupled to a toxic environment that encourages fraud and discourages commerce. The ... United States flirted with such a system ... there were hundreds of private entities that went about issuing their own private bank notes allegedly created one-for-one with state bonds. The problem with these so-called wildcat banks is that their reserves were not always verifiably backed and were thus subject to runs on the bank in which customers could not access their funds.

Well, with crypto you can verify funds and bonds are in fact one to one.

The second issue is that unlike public money which is universally accepted at par, the wildcat bank notes had a massive secondary exchange market where notes from different banks would not trade at par. A dollar note from Wyoming bank could be worth $0.60 to a note from a Nebraska bank and these values would fluctuate depending on market conditions. ... This was great for bankers who had access to non-public information and could arbitrage these notes for their own profits, but for the average person it was a terribly predatory and exploitative system.

Agreed banks are evil. This is basically fixed by everyone having access to the info that banks have been holding private for generations.

... Except now instead of wildcat banks we have wildcat tech platforms with the same aspirations. They don’t want to interface with public money, they want to become issuers of private money themselves.

Agreed there are a large number of coin creators out there just looking to make money by cashing out to investment firms.

A fully vertically integrated form of company scrip that they issue to their investors, employees and customers to create not just a walled garden, but a walled garden where every path has a toll booth that takes only their coin.

So, Apple?

... These kinds of private money regimes are just as exploitative today as they were in the 1800s, and the so-called “web3” notion of embedding this form of institutionalized corruption as a first class structure into the internet is a terrible idea that ignores the lessons of history.

Let me be clear here, Web3 is a restoration of the web as original envisioned. The web was supposed to be a series of inter-connect site, places, and servers. The web is currently locked up in a handful of companies. Most people host on AWS or use Facebook or Apple products and they know or can get with ease every piece of information about you.

Crypto assets are all unregistered securities. 

... The only use case is gambling on the random price oscillations, attempting to buy low and sell high and cash out positions for wins in a real currency like dollars or euros. Yet crypto cannot create or destroy real money because unlike a stock there is no underlying company that generates income ... So every dollar that comes out of a cryptocurrency is because a later investor put a dollar in. They are inherently zero-sum by design ... For every winner there are guaranteed to be multiple losers. It’s a game rigged by insiders by hacking human psychology.

Yes, there are many bad people out there. Some are doing it unintentionally, others not so much. But that sounds like the world of "real" money to me as well. At least the likelihood of some bad happening is more likely my fault with blockchain.

... Every crypto coin is just on a random walk to zero by a different path.

This is very clever and quotable line. Most but not all crypto coins will walk there way to zero. The few that survive will have changed the world.

The argument laid out in this article is a quite complicated edifice, and requires a large amount of knowledge at the intersection of several fields of study that, quite frankly, the public should not have to concern themselves with learning to safeguard themselves against fraud. ...

Don't you dare support making people helpless. Caveat Emptor has always been the way of the world and blockchains simplify verifying some previous hidden or difficult to find knowledge. i.e. The value of and earning of money.

History repeats itself first as tragedy and then as farce. ... If we’re unlucky then they accelerate the expansion of a shadow financial system used to enrich the already wealthy, increase wealth inequality to historically unprecedented levels, decrease faith in democracy and further fan the flames of populism.

UGH. There is already a shadow financial system that enriches the already wealthy. I am happy to be the double or triple shadow financial system just let me know when the slot opens up.

These trends ultimately converge to leave humanity’s fate to the wild oscillations of market manias, charismatic demagogues and strong men who promise to save us from ourselves. And we’ve seen how that story ends.

Again UGH. We have those with out blockchain and crypto coins being the cause of it.

The End

Almost every argument made by Stephen in this article is actually an argument for destroying the current system.