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The purpose of this post is to explain in simple terms why cryptocurrencies are not a currency, not an asset, not a store of value, and not an investment. With apologies to the guys from the film Swingers, cryptocurrencies are (so) money.
What is Money?
Money was invented to be a physical (and now digital) representation of productive energy. Whether it is the energy from sun, soil, water and toil used to grow an ear of corn, or the labor and resources expended in painting your house, the energy spent practicing and performing music, or getting your CPA so that you can attest to a client’s properly reported financial statements, it’s all derived from energy and it all has a dynamic value when measured in terms of money. Blockchain miners might agree with that run-on sentence. Is there a difference between currency and money? With regard to cryptocurrencies, that may be the crux of the problem.Continue Reading...