Inflation continues to grow, the stock market continues to fall, Europe is full of smoke, and the data dessert market such as new cryptocurrencies is increasingly volatile. These are not happy. But the explosion of the structure of cryptocurrencies has at least one purifying benefit: it presents an opportunity to cleanse a situation of highly unmanageable speculation and excess hype, defrauding gullible investors in the process.

The signs of carnage are everywhere. BTC, a pioneering cryptocurrency that has been around for over 13 years, has seen its price drop by 50% in 6 months. Other digital tokens with odd names like solana, ethereum, ripple, dogecoin (which started off as a joke and became more and more like a joke) lost a similar percentage in value. A "stable currency" called terraUSD, which is supposed to be pegged to the U.S. dollar to facilitate predictable trading, has failed. The irreplaceable currency, where digital objects can be bought and sold for 3D renderings, has lost its luster. It is reported that the collector bought the first article of Jack Dorsey, who is also the founder of Twitter, for $2.9 million. When he could sell it for the highest transaction price of $14,000, he chose not to sell it. All this to prevent the misery of the zealots.

Over the past decade, venture capitalists, software programmers and entrepreneurs have come up with various forms of cryptocurrencies for alternative system software that can generate financial and other digital transactions. The idea then was that the global financial system was run by ossified government ministries. A system of decentralized accounting technology with distributed ledgers that will lead to the democratized exchange of goods or services around the world. In any case, this is the corporate vision. In practice, cryptocurrency proponents have been trying to articulate what it is, or more critically, what it is good for. Cryptocurrencies are not really money because not many people use them to pay for other things. (Except for pornography and crime.) Even Coinbase, a large cryptocurrency exchange, charges customers dollars to buy and sell on the software. Although regulators are working hard to declare that cryptocurrencies are not securities in the name of protecting investors, they are like stocks and bonds. The cryptocurrency enthusiast predicts (okay, maybe hopes) that his imagination will like products, especially gold, as a store of value in use. However, the recent plunge in cryptocurrency prices in the face of rising inflation has shattered that ideal. It follows that forex speculative chips of unproven cryptocurrencies are affected along with other unsuccessful chips. Warren Buffett is right when Bitcoin and similar assets are called unproductive assets these days. They go up if people pay more for them, but go down when people pay less. But they are of little value in themselves.

All of this is a good practical exploration of the practical implications, if not all of the people who have lost real money in fake transactions. You can draw a straight line from the economic bubble of the 1990s to the subprime mortgage crash 10 years later, and from today's data encryption fad. Each involves the crux of a good idea, then preached by confident couples such as hawkers and charlatans, convincing the general public that they are trading rather than speculating. The climax of this era is likely to be the relatively stable Fidelity Investments announcement last month, which also gives customers options and allows employees to allocate some retirement plans to Bitcoin, because they rarely feel pleasantly surprised. Andreessen Horowitz released a report last week that called the downturn one of a series of "price innovation" cycles, not ironically. But backed by the personal lives of the famous and the stars, there are also real underdogs, like New York Governor Eric. Adams (Democrat) vows to turn its top three paychecks into bitcoin and ethereum, its big city promoted as the home of "Internet Finance." Matt Damon, Gwyneth Paltrow, and LeBron James are a small handful of A-listers who are paying for various crypto merchandise. Last year, a friend of mine decided to invest $1,000 in a basket of cryptocurrencies so he could know all the horrors of it all. Today's use is worth $280.

Summary

Overall, there may be some benefits to a cryptocurrency crash, as well as costs to other financial turmoil. There is no doubt that legal and beneficial products strictly controlled by the government will make people rich and improve the daily lives of the people. Until then, encryption is still a search for solutions to difficult problems.