Cryptocurrency has failed, and here's why. Without including bots and illegal transactions, how often do you see it used as actual, you know, currency? Almost never. Meanwhile, every ancap and their racist uncle has poured money into bitcoin because it's "such a good investment" it's just become another way to invest, except it got popular with 15 year olds. However, bitcoin is such an obvious pyramid scheme that one can only hope these people don't pull out until it's too late for them and their precious ancap money.
Due to the wild fluctuations that it undergoes by its nature, it cannot be used to fix prices. As such, the value of commodities in general must be expressed first in terms of fiat currency–actual money–before they can be given a price in cryptocurrency. It thus falls short of the very defining quality of the money commodity. Also, from a practical standpoint, cryptocurrency is perpetually deflationary which makes it more attractive as a speculative asset than as a means of payment. This makes it spectacularly inefficient in macroeconomic terms, since more of it is thus required (due to rampant and unpredictable hoarding) to facilitate all transactions that go on at any given time. Then, of course, you have the massive shortcoming that it is utterly useless as a marker for debt. Not only do fluctuations and deflation make a mockery of the concept of interest, but the very thing that makes it attractive–anonymity–undermines any guarantee of future payment.
A cool piece of software for drawing won't produce cool pictures if it isn't used by anybody or people who are lazy and got no talent. Likewise, no amount of programmer brilliance can make trading software work if everybody is an absolute shithead. Trading is a social phenomenon linked with production, which is also a highly social process despite what the ruling ideology tells you. A lot of what makes society work is patterns of behavior by masses of people that "libertarians" just take for granted or aren't even aware of. The concept of proof of work in Bitcoin should really be called proof of waste, since it serves 0 other purpose besides creating the proof.
There's an alternative called Gridcoin that actually uses the calculations for something else than just doing random shit, but I haven't looked deeper into it. Proof of stake doesn't look that great either, it just rewards the haves and punishes the have-nots. I don't want to have electronic coins for their own sake, I want to obtain products and services. And I want to avoid disagreements and disappointments, and if something like that happens anyway, I want to have some avenue for dealing with scammers. Bitcoin and similar concepts don't really do anything about that. It is foolish to focus so much on technical innovation here, since they can't really solve the basic issue, which is social. Impressive tech with a shit community gets beaten by mediocre tech with a nice community.
Crypto stuff mostly behaves like a speculative investment, economically. It also does function in a limited capacity for exchange of goods and services and contract management. The initial driver of popularity was that it promised to function as a way to bypass wall-street. As a people's finance. But since the distribution of high inequality (1) was reproduced in the cryptosphere, and wallstreet-money could also buy into it, as result it lost steam. Basically there was an expectation that the distributed systems would negate power in of it self, where also the individual economic interaction would be between the individual personal wealth pile and a collective wealth pile of an ethereal commons. Private property was supposed to be replaced with digital property, that belonged to the commons and was controlled by an emergent swarm intelligence. Also too many young adults of middle income families lost money in crypto-currency gambling with all of the different cryptocoins. It was pump and dump mania. However it's not likely going to crash and burn. To an extend it's a subsystem of the capitalist finance and legal system, but only half way. The main problem with co-opting it for labour vouchers and planning (2), is technical, it needs computers to run, and we don't have a secure computer infrastructure, in terms of end-user-devices, even though the crypto networking is decent in terms of security.
(1)
https://www.youtube.com/watch?v=BQrEEdy_uwM&ab_channel=PaulCockshott https://www.youtube.com/watch?v=aBxjrAjrIZY&ab_channel=NewEconomicThinking(2)
https://www.youtube.com/watch?v=cI01-5zhwdA&ab_channel=PaulCockshott
>Ecological Impact of NFTs Among the arguments made for Crypto is ecology, the idea being no physical money = no trees chopped. The problem being that this is incorrect. As the blockchain gets longer, it takes more processing power to produce a Bitcoin. This makes the value of the Bitcoin go up, which creates an incentive for Bitcoin miners thinking they can get the next one, which in turn lengthens the blockchain. As a result of this cycle, you have enormous processing power, which requires real physical electrical production, chasing the blockchain.
Here are posts from Crooked Timber's John Quiggin complaining about the economics of Bitcoin:
https://archive.md/Nk8qj https://archive.md/CEd7O