Lecture, Conference Presentation, Fireside Chat
A Skeptic's View of Crypto (from the Point of View of Monetary Economics)
- Long-term evolution of money is predicted to advance toward a cashless society where transactions occur via mobile devices or brain chips, with the entire monetary system potentially replaced by an algorithmic framework operating independently of banks or governments.
- Technological solutions addressing high remittance costs may bypass current government regulations, though governments are expected to either amend regulations or enforce crackdowns if Bitcoin poses a serious threat, thereby eliminating perceived freedoms.
- A reduction in Bitcoin mining computational costs by a factor of 10 is predicted to trigger Malthusian expansion, where increased production drives costs back to previous levels.
- The market may evolve into a fragmented landscape with approximately a hundred cryptocurrencies lacking a dominant role, potentially causing the value of existing currencies to plunge.
- There is a significant probability that the total value of cryptocurrency could drop to zero due to a loss of market confidence and the absence of an external backstop tied to reality.
- Broader blockchain applications are anticipated to remain relatively agnostic regarding their future success as substitutes for trust-based technologies, while cryptocurrency currently shows no signs of functioning as currency or money.