TLDR: meme coin rug pulls, among other issues around centralization
Crypto-believers often blame greedy financiers as the cause of the Great Recession in 2008. But we argue that crypto is not immune to these same risks.
Public blockchains operate on a distributed peer-to-peer network. This network provides each user a complete record of transactions that is updated in real time. Users can send digital cash between themselves without relying on a centralized authority.
Since each user has a full record of transactions, the system promises full transparency. But our research demonstrates that public blockchains, and the cryptocurrencies that run on them, do not actually replace trust with transparency.
Speculation, manipulation and market crashes remain very real dangers, regardless of whether the financial system is centralized or decentralized.
Centralization of power in the hands of insiders is still a major issue in the cryptocurrency space. This is particularly an issue for emerging cryptocurrencies like memecoins. Memecoins are a type of cryptocurrency named after internet memes or similar jokes. They draw their value entirely from speculation.
This article seems to be substituting the fact that crypto is extremely risky as an investment, for an argument that it doesn’t provide users with financial autonomy. That’s just incoherent, and the research they cite directly contradicts it. The article complains that social factors and devs have influence over the direction of a cryptocurrency, and cite a paper that says, in reference to people involved in Monero development:
That is exactly what “putting individuals in charge of their monetary transactions” requires and entails. The values behind the protocol are out in the open, the code is public, the consensus mechanism is public and (sometimes, for the good ones at least) successfully enforces what the particular cryptocurrency is meant to be. It is successful in being beyond various forms of outside control. But I guess the authors think that is a bad thing? That it might somehow be a better investment if it didn’t grant people autonomy instead? There’s no real organized point here beyond “crypto bad”.
I think it is more that the transparency that crypto promises doesn’t actually address market manipulation problems.
I don’t know how that argument doesn’t track for you. Crypto fundamentally can’t give you financial autonomy because it’s a very risky investment. You’d have to be one of the lucky few for that plan to work out.
“Will make you rich” is not what I mean by financial autonomy, and it isn’t what the article seems to be referencing. What I mean is the ability to use and have money without getting permission or needing to trust your bank or government or credit card oligopoly. It does that. That might not yet be a pressing need for most people in well off countries, but places where those things are corrupt or unusable have seen a big growth in real world use (admittedly mostly with USD stablecoins, rather than cryptocurrencies directly). I don’t think there’s much guarantee these things will remain relatively neutral and trustworthy here either, the way things have been going.