Corrupto-Currency
The Coin that Bites
Most transactions occur with both parties to the transaction feeling the benefits of their agreement, with the obvious exceptions of extortion, and now cryptocurrency, where the losers seem to be piling up and the winners remain covert. Like many new shiny investments, a sucker is born every day and the sucker who buys from the first sucker is born the day after. Bitcoin is “mined” and the traded but by those who are speculating about its value and then willing to honor its value among owners whose motives might be suspect.
It does not take much searching of the internet to find the negatives of cryptocurrency despite the banks being crypto-curious and the legitimate bitcoins exchanges. Besides the huge electric power consumption and the ability to conceal illegal money exchanges, the cryptocurrency, based limited regulation, seems as toxic as derivatives and junk bonds were in their heyday. Based on how a bitcoin surfaces, runs up and then collapses, with the facilitators making their fees and getting out, the environment for greed powered by deceit is overwhelming – too tempting for the buyer and the seller.
The scandals and corruption span the world with a list of the top ten lost value cases totally in current real US dollars of $100 billion without including the unraveling Argentina $Libra case and the pending $Trump coin, where, in both of these cases, the possible harm to the buyer is greater where governments are involved in the losses.
The question of value still remains as it is based on one person having the means of value transfer (money) and the other person honoring that value for a transaction and possibly paying more for it as the reason to own it in the first place, like investing in the US Dollar.
The value comes into question when the priorities are altered from luxury to survival. A survivor of a plane crash on an island with a Picasso painting, a gold bar, durable food rations, portable water desalination/purification machine and a fishing pole might have to change their focus on value. The Picasso painting is not going to do help much except as sunshade. The gold bar could be traded to the natives, if there are any unless they have gold toilets like a unnamed world leader. One can obviously see the value of the remaining items.
Postscript: Note that the value of gold would be only in jewelry -really which represents 78% of the gold use in a mostly luxury market. So you have to wonder about a the value of a gold standard that might be only relevant to countries that have high jewelry consumption. Think about the diamond market where the rarity of diamonds and the appeal of their appearance has been displaced by man-made diamonds, which is now about 20% of the market.