Here's part 2 of what I believe is an epic thread on crypto.
In Mr. Stark's reply to Mark Cuban, Stark fails to see the utility of tokens. For him, crypto tokens amount to not much more than the greater fool theory.
Again. Crypto advocates and entrepreneurs can run from Mr. Stark's words. I think that would be a crippling mistake. Because there's millions now who share some, or all of this sentiment.
Respectfully Mark, I just can’t see the utility of any token that would trade in those marketplaces (other than for pure speculation). To me:
-Crypto fails as an "investment” because there's no regulatory oversight, transparency, consumer protections, insurance, licensure, net capital requirements, and the crypto rug-pull bazaar is so rife with market manipulation, insider trading and fraud, that investors stand no chance from the get-go.
-Crypto fails as a “currency” because the price is too volatile; fees too high; taxes too burdensome; and risks too infinite. How can anyone accept crypto as payment when it could be worth a lot less the next day?
-Crypto fails as a “store of value” because it lacks utility and intrinsic benefit, the measure of what an asset is actually worth. Crypto has no value to store and it’s price is solely dependent upon the greater-fool-theory.
-Crypto fails as a “marketplace” because as recently explained in two remarkably researched articles, one by expert technologist Molly White and the other by Josh Zumbrun of the Wall Street Journal, crypto’s market capitalization never booms, or busts as much as reported. In fact, crypto market-capitalization measures and other traditional data points are often significantly distorted by misleading trades, double counting, lost coins and an array of other inherently imperfect information.
-Crypto fails as a “revolutionary equalizer for the unbanked” because it does not (and never will) cure historical issues of financial inclusion (Big Crypto’s favorite talking point). In fact, crypto’s actually the opposite — just another exemplar of “Predatory Inclusion” and affinity fraud, orchestrated shamelessly to dupe the disadvantaged and disaffected. What really stings is that the exploited victims of crypto are too often those who cannot afford to lose what they have invested. In other words, disadvantaged and disaffected communities get access under the auspices of inclusion, but that access can make their situations worse. Last year, a University of Chicago study found that 44 percent of Americans who owned and were trading crypto were people of color. To make matters worse, a recent J.P. Morgan Chase study found that people with lower incomes very likely made their crypto purchases when prices were elevated when compared to higher earners and have therefore suffered disproportionately. And just as payday lender storefronts are often concentrated in Black or Hispanic communities, the same seems to be happening with crypto A.T.M.s (which are also notorious for charging fees that can range from 7 percent to 20 percent per transaction).
Moreover, giving crypto a home to trade could make crypto-crime even worse. Investor carnage is not the only fallout caused by crypto. Crypto has evolved into the killer app for criminals, which is perilous for everyone everywhere.
Take Ransomware as an example. Collecting crypto in extortion transactions allows ransomware attackers not only to conceal their tracks and identities, but also to conduct their schemes from anywhere in the world. But for bitcoin, ransomware would not exist.
Traditional crimes have also increased exponentially because of crypto, including: drug-dealing, terrorism financing; human sex trafficking; money laundering; sanction evasion by countries like Russia, North Korea and Iran, who use crypto to transfer funds outside financial systems; assassins and other killers seeking payment for murder-for-hire services; and a slew of other financial crimes.
North Korea has perfected the criminal uses of crypto, stealing billions in bitcoin and ether to funnel to its nuclear weapons program.
Meanwhile, US law enforcement is often helpless to investigate, let alone, prosecute, crypto-related crimes. Indeed, US DOJ recently reported that crypto presents extraordinarily complex and sometimes impossible challenges for the identifying, arresting, extraditing and prosecuting criminals. https://linkedin.com/pulse/crypto-traceability-dont-believe-hype-john-reed-stark/?trackingId=xlT8JHIwS36cjERJzCo1Gw%3D%3D