May 26, 2022

Cryptocurrencies are one of the most divisive instruments in financial markets. Glance through the comments section of any crypto article in the Financial Times to get a feel for how deep the chasm of opinion is, from those who believe they represent the foundations of the next version of the internet to those who think they are outright ponzi schemes.

The difference seems to be between those who think of crypto as a form of money and those who view it as technology. As Azeem Azhar pointed out on his latest Exponential View podcast, money crypto is what dominates the headlines – it’s all about asset price movements and volatility.   

But as we’ve repeatedly said, such as in Bearbull’s comment on Why bitcoin can’t be a currency in February last year, crypto faces big barriers when viewed in currency terms. Bitcoin and other cryptos have proved extremely volatile, making them a lousy unit of account, and slow processing times lead to transactional problems. And that’s before you hit the regulatory hurdles, an example being China banning crypto transactions last year.  

However, it’s the technology side of crypto that’s really interesting, as James Norrington, associate editor at IC, has pointed out (‘Crypto: too big to ignore but not too big to fail’, IC,17 Deceember 2021). Some of the brightest young developers are flocking to crypto to see what they can build. It seems a key innovation that this technology can deliver is the ability to build a…

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