Cryptocurrencies are usually criticized for some of their controversial aspects: for the fact that they are traded with enormous fluctuations compared to traditional currencies, and this makes them an excellent tool in the hands of speculators, for the fact that they often consume a lot of energy and because they are usually associated to anonymous exchanges of money, which makes them a good option for some types of crime, especially cyber crime.
For example, let’s try to think of Bitcoin: we know that the technological infrastructure that supports it, the Blockchain, consumes a lot of electricity, so much so that, according to some estimates, if it were a country in the world it would rank twenty-sixth in the ranking of those that consume. more, positioning itself between Malaysia and Egypt. Let’s think about it for a moment: a cryptocurrency whose technological infrastructure consumes as much as Egypt, certainly a question to think about. On the other hand, deepening the subject, one would discover that a great deal of the energy used comes from renewable sources and that in many cases it could not be used otherwise. Furthermore, the global management of traditional currencies and the payment and financial settlement infrastructures around the world also consume an enormous amount of energy. In short, the question of “how much energy do cryptocurrencies consume” is complex and should not make us fall into the temptation to simplify the reasoning behind a simple “consume too much”.
Even the prejudices related to the “preferred currency of crime” should be greatly reduced, today most of the economic exchanges of the underworld takes place using suitcases and envelopes loaded with cash or, more easily, through electronic transactions in traditional currency on anonymous and encrypted accounts between countries that are very good at maintaining the confidentiality of their banks’ customers.
Contrary to what is often led to think, in fact, cryptocurrencies are usually not anonymous, even if it could be difficult to trace the identity of those who are in possession of the keys to use a certain address and therefore have in practice the availability of the value. that it contains. Among other things, all transactions are public, so it is always possible to determine how the quantities of value that are exchanged by a certain set of addresses on the various Blockchains move. As a further demonstration of how not very anonymous these architectures are, it is enough to remember that the authors of the famous Twitter attack of July 2020, which aimed at a Bitcoin scam, were all tracked down and arrested by analyzing the movements of the Bitcoins they had obtained illegally .
There are, it is true, cryptocurrencies explicitly designed to improve user privacy, such as Monero and Zcash, but at the moment they have trading volumes which, when compared with the other most popular cryptocurrencies, are negligible.
The fact that many cryptocurrencies are today excellent speculative instruments depends on their very high volatility. Bitcoin, for example, has objectively uncommon volatility when compared with that of other typical assets to invest in. Although Bitcoin is natively equipped with deflationary characteristics, which means that it is normal for its value to increase over time due to its scarcity, it was not initially conceived to be an investment asset properly, but a store of value eventually. to be traded as if it were a currency, so the large swings that Bitcoin’s value is subjected to are actually the effect of speculative actions on it, not the cause.
The point is that Bitcoin, like other cryptocurrencies, was born with the aim of making the exchange of value between people direct, and therefore not intermediated, cutting out of the game all those actors who today have the role of intermediaries, such as the system. banking and all entities capable of influencing and controlling the intermediaries themselves, such as central banks or governments of individual countries.
Today, any exchange of value between two people can basically take place in two ways: in cash, whose production and management is exclusively under the control of the central banks of the various countries of the world, or in electronic format, thus passing through the banking systems themselves or from the circuits that produce payment cards. For any transaction it is therefore necessary, always and under all conditions, to go through an intermediary and this intermediary is always under the direct control of the country in which you live.
This means that if the government of that country has an economic policy that causes very high inflation by taking away the purchasing power of the traditional currency, those who use it have no way to prevent this from happening. Similarly, if a country decides to block all movements on bank current accounts, to turn off the ATMs and to deprive the entire population of the availability of its personal economic resources, those who will live in that country will only be able to take note and return to the economy of barter.
They may seem like two examples on the edge of science fiction, but in reality they are things that happen today.
In 2018, the International Monetary Fund estimated that inflation in Venezuela had reached 1,000,000% (one million percent), i.e. purchasing power had shrunk ten thousand times in a year. It is as if an employee who earns 1,500 euros in January always found himself with those 1,500 euros in December, but that the real purchasing power was that of 15 euro cents in January.
This has prompted many Venezuelan citizens to protect their savings, and to detach themselves from their country’s economic policies by converting their savings into cryptocurrencies.
In August 2021, following the takeover of Kabul by the Taliban, many Afghan citizens tried to withdraw their savings from bank accounts. In some cases to try to escape, in other cases to try to secure the wealth of their property. As a response to this situation, the new Afghan government has approved the blocking of any banking movement and therefore the impossibility for citizens to withdraw their money.
Also in this case, not those who had cash with them, which can be easily stolen, but especially those who had deposited all their wealth in cryptocurrencies, storing the access keys that they will be able to allow in the future, were enormously advantaged in their escape. them to access again, from any computer and from any part of the world, the entire amount of their wealth, whether it be much or little.
Therefore, when we talk about cryptocurrencies, we must consider all their characteristics, and give greater importance to those that we, Westerners of the first world, take a little too much for granted and that have to do with the concepts of freedom and democracy.
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