Understanding Crypto 12: David Gerard: Crypto Realities

What is the real value of cryptocurrencies? Can crypto technology be applied to traditional financial markets? In this episode, we welcome David Gerard, a technologist and author of the books Libra Shrugged and Attack of the 50 Foot Blockchain.  He uses his skills as a journalist to investigate the uses and hype around cryptocurrencies and is an outspoken skeptic of the technology. Although not originally from the technology sector, he has become an authority on the topic and has briefed the UK House of Commons Science and Technology Committee on the technology. He also runs a blog covering important aspects of the cryptocurrency space. In today’s conversation, we learn some harsh realities about the benefits of cryptocurrencies and why they will not last in the long term. We learn what the real value of crypto-markets is, why he considers it to be a Ponzi scheme, what needs to change about cryptocurrencies, whether there are any benefits to the technology and the role of financial journalism in the crypto space. Listen as we unravel the political ideology which underpins crypto and whether it can be separated from the technology. We also discuss the outcome of El Salvador’s bitcoin experiment and why it did not work. We also learn the reasons behind the recent crash in some crypto markets and find out which book David thinks everyone should read.

Key Points From This Episode:

• We start the show by finding out the real dollar value of crypto markets. [0:03:45]
• The role financial journalism played in getting crypto to where it is today. [0:06:02]
• Reasons why he does not trust the value of cryptocurrencies. [0:11:04]
• Why he thinks cryptocurrency journalism is not credible. [0:12:00]
• He explains Bitcoin’s underlying political ideology and the associated problems. [0:13:25]
• The classic debate of who should have control over financial markets. [0:16:41]
• Whether it is possible to remove the political ideology from crypto-technology. [0:17:34]
• What the most important aspect of cryptocurrency technology is. [0:18:24]
• The reasoning behind the argument, ‘You just don’t understand the technology.’ [0:21:52]
• How to make cryptocurrency work in traditional financial markets. [0:23:50]
• Why the recent crash in the cryptocurrency markets occurred. [0:28:03]
• Find out if cryptocurrencies can be beneficial for the ‘bankless’. [0:30:25]
• We discuss the outcome of El Salvador’s bitcoin experiment. [0:32:20]
• He outlines why Salvadorans did not like the proposed bitcoin market. [0:38:11]
• Learn what the UK House of Commons Science and Technology Committee wanted to understand about cryptocurrency. [0:41:23]
• How his views on cryptocurrency were received by the commission. [0:43:46]
• An example of a crypto-based business that was operating illegally. [0:45:01]
• Whether NFTs will allow artists and musicians to keep more financial gains from their work. [0:46:13]
• We discuss whether crypto-based technologies will improve over time. [0:47:57]
• Examples of good uses for crypto and blockchain technology. [0:49:22]
• What would need to happen for David to change his opinion on crypto. [0:52:25]