So I had a little chuckle to myself a couple of days ago when I watched a CNBC video in which the former Chief Economist of the World Bank, Joseph Stiglitz call for crypto to be 'shutdown.'

Ban 'em all

As well as stating crypto should be shutdown Stiglitz, also called for the fiat world to rise to the challenge of having 'the transparency of an electronic payment mechanism without the dangers of the surveillance state'.

Stiglitz is in favour of transparent electronic payments, as a means of allowing the Banks to better macroeconomic manage the economy. That's his stated agenda. He believes that cryptos are moving things off of a transparent platform (of cash, fractional reserve, mis-selling, insider dealing and the like) onto a dark platform.

Condemning the solution he seeks

I'm going to give Stiglitz, the benefit of the doubt. I think he is confused as to the way that cryptocurrency works.

The backbone of cryptocurrencies is a trustless distributed ledger; where multiple independent parties hold a history of all the data in a manner where it's provenance cannot be tampered. Unlike the current payment systems where a mishmash of entitles holds a siloed subset of data on servers that can be compromised by bad actors.

Ironically, cryptocurrencies offer the exact transparency that Stiglitz seeks.

Everyone gets to see all the data; with varying degrees of anonymity that helps protect against the surveillance state. The only question is how to get the right mix (between transparency and anonymity). That is, to a great extent, what a whole host of the crypto platforms that are focussed on being 'digital money' are experimentations of.

Crooks will be crooks

I find it amusing when people attempt to link crypto to money laundering and illicit activity. Criminals will always find inventive ways to exchange value with each other. They did it before fiat money became ubiquitous. They are doing it during this era of government money. They will be doing after the government money experiment has ended.

Shutting down cryptocurrencies because criminals might use it; is like banning cars because bank robber might use them as getaway vehicles!

People tend to use 'the crooks will use it' as a means of scare-mongering. We wouldn't have the internet with have today (for all it's joys and burdens) if we submitted to that narrative.

Shutdown who?

The fact is that cryptocurrencies cannot be 'shutdown.' That's the point of cryptocurrencies. There is no off switch. You cannot just march into the Office of Cryptocurrencies and 'take them down.' Governments need the consent of people that use the network to 'shutdown' a single cryptocurrency; let alone all of them. Any user can take the steps necessary to secure the network on which their value is held. It's a wonderfully self-empowering tool.

If a cryptocurrency becomes irrelevant and doesn't have the support of a significant amount of users; it will fizzle and die of its own accord. However, provided there is a sufficient consensus of people that find value in using a cryptocurrency; it will live on.

Thus in these nascent days of cryptocurrencies, the challenge for the individual is to decide the extent (if at all) they want to use cryptos. Until a point where the wheat is separated from the chaff.

Right side of history

Sure, governments can try to launch a global battle against their otherwise law-abiding citizens. Whose only 'crime' is wishing to exercise their freedom to transact and associate with each other, free of third-party interference.

Governments can also choose to stifle the innovation and social advances that come with granting such freedoms.

History pages are littered with battles between those that fight for freedom and those that seek to stifle it.

If people like Stiglitz believe that cryptocurrencies are harmful and people need 'protecting from them', then it is a battle of hearts and minds he needs to win.

Because 'Shutting down' cryptocurrencies is impossible.

All a government can do is exclude itself and attempt to exclude its citizen from the opportunities (and yes, responsibilities) cryptocurrencies bring.

Ultimately, regardless of what Stiglitz says, the free market will decide whether cryptocurrency or fiat is 'good money' as the people who make the best choices in regards to their means of retaining economic value over time will be rewarded.