Cryptocurrencies - Questioning The Value Proposition

1) Is Bitcoin Netscape?
2) How limited is the supply of cryptocurrencies?
3) If Bitcoin crashes what happens to other alt-currencies?
4) What asset market lacunae do cryptocurrencies fill?
5) Why mine?
6) Why distribute the ledger? 
7) Do cryptocurrency transactions need coins or tokens?
8) Can you make cryptocurrencies KYC and AML compliant?

Concluding comments

Cryptocurrency technology is likely to serve as the basis for executing asset transfers and storing the record of transactions and contracts. Mining, anonymity, and the distributed ledger are not relevant for most of these purposes. The case is not really made that cryptocurrencies are assets and that means that the current pricing proposition is shaky. It is possible that a private issued ‘fiat’ cryptocurrency will trade alongside other assets, but it is still not clear what would give it value.

The underlying proposition is like the Marxist interpretation of history. The intellectual breadth and audacity are breathtaking. The ability to think through ex ante how a new, decentralized currency asset could be constructed and maintained is remarkable.  But that doesn’t mean that the underlying premises are correct, or that it solves a problem anyone really worries about.

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