Transaction Costs and Tethers: Why I’m a Crypto Skeptic https://nyti.ms/2NYYSdw
As a technologist with an understanding of cryptography and very aware that in order to remain secure and tamper proof we increasingly increase the complexity of the work to assure the integrity of what we are using cryptography to protect. I wonder why so many people got so excited about Bit coin and Blockchain. As I have written before the cost to assure the integrity of the ledgar. Be it the original work to calculate the nonce or the subsequent work to confirm that the nonce the miner calculated was the right one, there is a need to spend money buying work specific computers, renting or building a facility to houses these work units and the power to cool and run these computers.
Mr. Krugman properly outlines the challenges. He effectively focuses on two issues. The cost and the idea of tethering.
It is this need to identify the value of the coin. Governments help to stabilize their defined currency. The intrinsic value or use of Gold, establishes its value.
Understanding and being able to clearly articulate how cryptocurrencies are valued and how then can achieve the stability necessary to support commerce is essential. This is what tethering is about. How do we establish and more importantly share the nature of the valuation.