Vitalik Buterin poses that question, do read his whole storm. Here are the last
How many Venezuelans have actually been protected by us from
How much actual usage of micropayment channels is there actually
The answer to all of these questions is definitely not zero, and
in some cases its quite significant. But not enough to say its
$0.5T levels of significant. Not enough.
Let me set aside the question of enabling grey or black market
activities, and let us put aside the bubbly component of these
assets, which may or may not be real. Id like to focus on the
Furthermore, crypto-assets have not consumed half a trillion in
social costs, though Id like to see the electricity bill. So
mine is the concrete question: insofar as crypto-assets have served
as hedges and stores of value, is that social value or just a
private return at some offsetting rent-seeking-based social
Stores of value
Lets say I build a warehouse and store some furniture in it,
because I am moving and I dont want to throw out the sofa but need
to keep it somewhere for a month. The gains from storing that
furniture can be captured by standard cost-benefit methods, and few
would doubt that is a legitimate private and also social
efficiency. I am carrying sitting capacity into the
With crypto-assets, I am carrying wealth more generally into the
future. The person who most wants that payoff structure for
the wealth carry will end up owning the crypto-asset.
Do I hold and carry forward that wealth at the expense of other
people? Is creating a crypto-asset, in welfare terms, a bit
like being a counterfeiter and thus rent-transferring and
wasteful? Or is it more like storing a sofa while moving
Or is the crypto-asset more like an insurance contract, and thus
again wealth-enhancing? I see it as performing a mix of the
store of value and insurance functions.
If the crypto-asset is rent-seeking (the electricity cost
aside), exactly whose purchasing power is
diminished? Presumably the Bitcoin and Ether
millionaires spend more of their money and drive prices up for
others. But it seems that is a pecuniary externality, not a
real social cost of the kind that would justify a judgment of
socially wasteful rent-seeking.
Maybe it makes more sense to view the crypto-assets as a new
kind of insurance contract: if some of my othe...