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What are your thoughts about cryptocurrency?

I could never use this technology, and I don’t see why anyone would bother. The whole thing seems counterintuitive to me. People value cryptocurrency in real money and buy and sell it like stocks, hoping the price will go up. If you are going to measure its value in dollars and trade it to make more dollars, why not just use the money in the first place?

I wrote a bit on this from a satire perspective:

I Thought Crypto Was Supposed to Replace the Banks

I understand some people see it as an alternative to the traditional banking system, and it may have advantages in certain transactions. But I can’t see myself using it at all. Very few places accept it as payment, and with so many different types of cryptocurrency available, I wonder how many will still be around years from now.

I don’t think people understand the risks and chase the possible return or the novelty. Banks have laws and regulations to protect consumers and hold them accountable. Crypto doesn’t, and if you lose your wallet or keys, you may lose everything. Nothing really backs crypto, and there are no regulated protections.

What I find interesting, though, is that the technology behind cryptocurrency may be more useful than the currencies themselves. Blockchain is basically a digital record of transactions, with records linked together in a way that makes them difficult to change without detection. It can track transactions and ownership without relying on a single central record keeper.

Even banks have recognized that potential. JPMorgan Chase, whose CEO, Jamie Dimon, has been a vocal critic of Bitcoin, has also used blockchain technology for its own financial services. That is an important distinction. A bank can see value in the technology without believing Bitcoin, or any other cryptocurrency, is the answer.

Maybe cryptocurrency has a place in certain types of transactions, particularly where moving money between people or across borders is difficult or expensive. I can accept that possibility. But I still don’t understand the attraction of treating something that has to be valued in real money as a replacement for that money.

The technology may prove useful, and I think it is worth watching. But as far as buying cryptocurrency myself, I’ll stick with the money I understand.