Crypto Meltdown

Quick thoughts: Is it a good thing?

Today, I am tracking the sudden collapse of the Terra/Luna cryptocurrency ecosystem, which was promoted to me, until recently, as the wonderful cutting edge of crypto. I thought I would offer some quick thoughts.

Terra is a “stable coin” which means it is pegged to fiat currency, with one dollar for one Terra. Over the last few days, Terra’s value has plunged — to less than 30 cents. Months ago, a friend paid me for some work in Terra/Luna. He explained that Luna gave a 20% annual return when you staked it, risk-free. Apparently, there was a bit of risk in the end.

If I am honest, I feel the cryptocurrency enterprise is a bit of a tragedy. We had reached a juncture as a species where we needed to focus collectively on preventing ecological catastrophe. Instead, the rise of crypto fused the irrational enthusiasm found in the dot-com bubble with the cynical manipulation that led to the 2008 financial crash (due to investments in CDOs linked to subprime mortgages). Many of the intelligent hipster Burning Man crowd turned to cryptocurrency trading, ICOs, and so on, getting carried away by its seductive Libertarian ethos and the prospect of a big windfall.