I’m afraid to invest in anything crypto. Even typing that last sentence makes me feel old. The question is why? What’s wrong with me? Millions of annoying white people invest in crypto. I’m an annoying white person. What am I missing?
Here are the reasons, until now, I haven’t pulled the trigger.
CRYPTO FEELS COMPLETELY UNNECESSARY
I don’t see the point. Why do we even need crypto? Because banks and other digital forms of payment are too regulated? Don’t we want money to be regulated so speculators can’t drive down the value of currencies? Paul Krugman expressed this exact sentiment in January when he wrote:
What’s this crypto thing about? There are many ways to make digital payments, from Apple Pay and Google Pay to Venmo. Mainstream payment schemes, however, rely on a third party — usually your bank — to verify that you actually own the assets you’re transferring. Cryptocurrencies use complex coding to supposedly do away with the need for these third parties.
Skeptics wonder why this is necessary and argue that crypto ends up being an awkward, expensive way to do things you could have done more easily in other ways, which is why cryptocurrencies still have few legal applications 13 years after Bitcoin was introduced. The response, in my experience, tends to take the form of incomprehensible word salad.
I still can’t pay my mortgage or my grocery bill with crypto. And even if I could, why would I? Because I could. Because it’s cool? So unnecessary.
IT’S REALLY BAD FOR THE ENVIRONMENT
It would be one thing if crypto caused no harm to the planet or any of its inhabitants. But that’s clearly not the case. At a time when an ice shelf the size of New York City recently collapsed in Antartica, should’t we be using our computing power for something other than creating another form of currency we don’t really need?
To that end, Elizabeth Kolbert in The New Yorker recently wrote:
According to the Cambridge Bitcoin Electricity Consumption Index, bitcoin-mining operations worldwide now use energy at the rate of nearly a hundred and twenty terawatt-hours per year. This is about the annual domestic electricity consumption of the entire nation of Sweden. According to the Web site Digiconomist, a single bitcoin transaction uses the same amount of power that the average American household consumes in a month, and is responsible for roughly a million times more carbon emissions than a single Visa transaction. At a time when the world desperately needs to cut carbon emissions, does it make sense to be devoting a Sweden’s worth of electricity to a virtual currency? The answer would seem, pretty clearly, to be no. And, yet, here we are.
I DON’T KNOW HOW TO VALUE IT
If I buy shares of Apple, I can see a direct correlation between the number of iphones and iwatches they sell and the value of the company’s stock. If I buy shares of Ford, I can see a correlation between the number of F-150’s they sell and the value of the stock. If I buy Bitcoin, Dogecoin, Stellar, Cardano, Ethereum, or Polkadot (that’s a real thing), I can see a direct correlation between the value of the currency and the number of other people who think there’s value in the currency? Is there any real value in that?
I HATE THE WINKLEVII
To be fair, I don’t know the Winklevii. But I never rowed or went to an Ivy League school so I’m guessing we wouldn’t have that much to talk about. So do I really want to invest in something that is going to make Tyler and Cameron Winklevoss richer? I guess it’s no worse than investing in Meta and making Mark Zuckerberg richer but all things considered, it’s not really something I care to do especially when it does nothing to make the world a better place.
THERE’S SO MANY OTHER INVESTMENT OPTIONS
If there wasn’t anything else to invest in, I’d absolutely invest in crypto. But there are so many great American and foreign companies vying for our investment dollars. I bought shares of Berkshire B two years ago and they’re up close to 80%. Would I rather invest in Warren Buffet’s amalgam of railroads, insurance and candy companies or Tyler Winklevoss’ crypto dreams?
For me, the only way to invest in crypto is to invest in Coinbase. So that’s what I did. Reluctantly. Coinbase is the crypto exchange platform that allows individuals and institutions to trade crypto assets. Even if I personally don’t believe in crypto, this is a way to invest in other people’s maniacal belief in crypto. If I lose the small amount I invested, I’ll feel vindicated. If I get a decent return, I won’t feel entirely left out of the era. Nothing wrong with that.
