On crypto….

As the frisson of fury over SBF/FTX subsides, a few comments from a traditional dividend investor, cash-on-the-barrel, bricks & mortar business owner:
1. Distributed ledgers are not new.
2. A World Wide Web of servers is well-suited to implement distributed ledger technology that is faster and more expansive than could ever have been imagined prior to the internet.
3. Encryption of transactions in a distributed ledger system makes sense.
4. The full flourishing of this system will likely require an internal system of measurement, store of value, & medium of exchange.
5. Existing ones such as blocks of salt, strings of beads, gold coins, paper backed by gold coins, or paper not backed by gold coins are not well-suited to serve as the basis of digital commerce. They have a lot of baggage and are not native to this environment.
6. Coming up with a widely accepted medium of exchange will involve numerous iterations, including the obligatory long-list of failed ventures, pivots, and fraudsters taking advantage of a new environment.
7. The use case, logic, and base value (as in store of value) will have be far clearer than it has been heretofore if it is to gain traction with a broader community. We are nowhere near there yet. And there will need to be some sort of bridge between the two worlds.
8. Finally, and perhaps most importantly, you can’t escape trust. The most recent debacle shows that. It wasn’t about distributed ledgers or encryption or new stores of value. It was about human folly. A digital store of value just transfers the trust equation from parties you know to parties you don’t know.