Yes, I know that it still exist, and yes, decentralized currency which utilizes distributed, cryptographic validation is not actually a strictly bad idea, but…
Is the speculative investment scam, which crypto substantially represented, finally dead? Can we go back to buying gold bars and Pokemon cards?
I feel like it is, but I’m having a hard time putting my finger on why it lost its sheen. Maybe crypto scammers moved on to selling LLM “prompts?” Maybe the rug just got pulled enough times that everyone lost trust.
I don’t think transaction fraud or identity theft would disappear overnight, they would just take on different forms.
I think a big part of why cryptocurrencies don’t take off as actual currencies (beyond speculative investors ruining everything), is the fact that there are a lot of clear benefits to a centralized system that blockchains have yet to adequately replace.
1: Scale. The amount of processing power it would require for all McDonald’s global credit card transactions on a blockchain is many orders of magnitude greater than that of using Visa or Mastercard. Even when you account for proof-of-stake coins like Ethereum. Maintaining a single large centralized database will always be more energy efficient than maintaining many large decentralized databases, especially when the latter comes wrapped in a dozen layers of cryptography.
2: Reversibility. If I buy something from a stranger on the internet and use my debit or credit card, my bank can issue a chargeback if said stranger tries to screw me over. This is fundamentally impossible on a blockchain without relying on some kind of middleman to hold funds in escrow, at which point you’re basically back to using big centralized banks to do all the heavy lifting. Sellers may view this as a positive aspect of using a blockchain, but they can’t realistically force buyers to use a payment processor more amenable to their desires. If they could, PayPal would have vanished years ago.
On top of that, one of the big problems that blockchain solves can be solved through centralized systems as well. The big one that people bring up is credit card fraud, but what a lot of people don’t realize is that credit card fraud is a lot less common outside the US than within. This is because places like the EU have mandated security measures such as chip-and-pin (the US only requires the chip part). Smartphone-based contactless payment systems like Apple Pay also provide effective 2-factor authentication at the point of sale. And while blockchain is theoretically more secure, in practice these mechanisms are “good enough” for everyday use.