Thomas L. Hogan: Is Crypto Just a Meme Coin Casino?

Bitcoin and other cryptocurrencies are widely – but wrongly – panned as unregulated casinos or Ponzi schemes that create no real value. For example, US Senator Elizabeth Warren called crypto a “threat to financial stability,” while the UK’s Treasury Select Committee said that cryptocurrency ownership “more closely resembles gambling than a financial service.”

While some cryptocurrencies are mainly speculative, many serve specific business or functional purposes. We can identify some of the value created by cryptocurrencies by breaking them into four general categories: Bitcoin, stablecoins, meme coins, and utility tokens.

The future of money is digital – but NZ needs a careful framework to prevent the pitfalls of cryptocurrency

New Zealand’s central bank is preparing for a future that includes the mainstream use of cryptocurrency.

At the end of last year, the Reserve Bank of New Zealand (RBNZ) published an issues paper, Private Innovation: Te Auahatanga, on digital currencies. The paper sparked a wide-ranging discussion on the development of the cryptoasset market and how to respond to the challenges it presents.

The RBNZ received 50 submissions on its paper, with consultation ending in April. A summary of the submissions was recently published.

We took a look at the key concerns held by those who participated in the consultation and what these concerns could mean for the uptake of cryptocurrencies in New Zealand.

Matt Ridley: Minimising the need for trusted third parties

The price of a Bitcoin has risen tenfold in ten months. Yet whether and when the bubble will burst is beside the point, which is that Bitcoin works. What I mean by this is that Bitcoin has proved that the blockchains technology behind cryptocurrencies is capable of doing what it was claimed it could: create an asset of limited supply and high security, like digital gold.

“Running non-stop for eight years, with almost no financial loss on the chain itself, [Bitcoin] is now in important ways the most reliable and secure financial network in the world,” writes the legal scholar and computer scientist Nick Szabo. This is likely to be a more enduring legacy than any burst bubbles or scandals over the use of cryptocurrencies by drug dealers. Blockchains may change more than money.