Now, I know Blue Hill, George Stevens Academy, and even this church, all have a real and personal connection to the blockchain and cryptocurrency, but I have to confess, I don’t really understand it. I mean, I was in the tech industry before I became a pastor, so the idea of the blockchain as a distributed technology makes sense, the economics behind cryptocurrencies, not so much. Traditional currencies like the dollar or the euro are no more than an agreed system of value and exchange, backed up originally by hard assets, and these days, at least in the case of the US dollar, by the “full faith and credit†of the United States. This is why economists panic when politicians hold that “full faith and credit†hostage, extracting political ransom to preserve the life of our economy. The dollar represents some measure of human labor and talent, some tract of land, some quantity of pork bellies.
But there is nothing that backs up cryptocurrencies like bitcoin. The whole idea is to be out of the control of governments, making it easier to move money while avoiding the watchful eyey of the IRS, the DEA, and anti-terrorism units, but that hiddenness also means there are no bailouts and no regulators preventing fraud. There is the constant danger of hackers, North Korean mostly, who have made off with billions. One corrupt regime, that of the Venezuelan despot Nicolas Maduro, has tried to sell the world on the petro, backed up, in theory, by the petroleum assets of that nation. It is as much of a sham as his Bolivarian paradise Venezuelans are fleeing by the thousands.
The value of every cryptocurrency is driven by speculation, with millions in imaginary value disappearing into the ether just this year, maybe appropriate since ethereum is another of those cryptocurrencies. Though there seems to be a new one almost every week, so I can’t quite keep up. Rather than the hip cyber geek I once was, I’m beginning to feel like a cranky old Luddite. Continue reading “Counterfeit Wampum: October 7, 2018”