Video: Lyn Alden's history of money
Michael > May 4th, 2024, 07:04 PM
Lyn Alden has been openly advocating for the adoption of crypto currencies for years. So there is a bias to this video. But most of it covers the complex and interesting history of monetary systems. It's a great history lesson.
Watch Lyn Alden: How Money & Banking Work (& why they're broken today) from YouTube
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What she doesn't discuss in this video is the environmental impact and social risks of using crypto currencies.
The environmental impact is measured in terms of how much electricity blockchain-based monetary systems require (it grows constantly) as well as the computing resources. Every miner that joins the network must maintain a full copy of the blockchain, and these things become huge. Engineers around the world argue that crypto currencies are not sustainable because of the exponential growth in demand for both electricity and equipment. And because blockchain halving events reduce the payments made to network miners for encoding the transactions into the blockchains, competition for newly mined crypto coins becomes more expensive.
In fact, we've already seen several large mining operations abandon Bitcoin because they became unprofitable. And in order to cover their electricity costs, cryptominers move operations to communities with cheap electricity, which places unexpected burdens on those electrical grids, increasing costs for everyone.
The social risks of crypto currencies include lost value (where wallets become inaccessible or corrupted, sometimes draining millions of coins from crypto systems) and "dark transactions" where criminals and terrorist networks (or certain nation-states) use the crypto exchanges to send large sums of money across the world in the hope of avoiding detection and monitoring by law enforcement and anti-terrorism agencies.
And then there is the opportunity for fraud, which has happened more than once. Sam Bankman-Fried is only the latest example of a crypto barron having been brought to justice for defrauding his investors. These fraud cases (and failures of large crypto exchanges) are spurring government action around the world, leading to more regulation. But increased government regulation may lead back to exactly the kind of centralization that crypto currency advocates like Lyn Alden claim is the problem with the current U.S. Dollar-based system.