We all know the legend of cryptocurrencies. Cryptos were created by applied mathematicians and digital engineers who were looking for a form of “money” that would not rely on any centralized issuer or depository.

Cryptocurrencies had immediate appeal to libertarians, anarchists, criminals and Ayn Rand followers who were cheered by the chance at liberation from government and the big banks. That’s fine by me if it works, but it doesn’t.

Cryptocurrencies turn out to be expensive, slow, inefficient and otherwise deficient compared with existing payment channels such as Visa, PayPal and Venmo. Crypto mining consumes inordinate amounts of electricity, which will not be allowed to continue in a world that is seeking sustainable, renewable energy sources.

The crypto world has been plagued with fraud, theft, bankruptcy and “missing” coins as well as wild swings in valuation that negate the idea of a “store of value,” one of the pillars of the three-part definition of money.

Worst of all, the mathematicians and engineers may be skillful developers, but they don’t know much about monetary economics. Developers put caps on the number of coins that could be created in order to avoid inflation. Instead, the cap produces deflation, which is fatal to the formation of a credit market and prevents the coin supply from expanding in a prudent way to match real growth.

All along it was assumed that central banks and government agencies would fight the expansion of the cryptocurrency market because it threatens their monopoly on money creation. As this article shows, that is not true.

The global monetary elites are fine with cryptos as long as they are in charge. This article describes how the World Bank and IMF are collaborating on their own private blockchain, which will support a private government-controlled cryptocurrency. This may not be what the founders of cryptos wanted, but it’s what they’re going to get.

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