CRYPTO -RESURRECTION- CRAMPS : MASTER GLOBAL ESSAY

CRYPTO appears to be on the verge of mainstream acceptance. The price of Bitcoin, the original (and still most prominent) crypto currency, hit an all-time high recently, while the Securities and Exchange Commission has loosened rules that make it much easier to invest in crypto.

Donald Trump is vowing to make the United States '' the crypto capital of the planet,'' and a new Republican-sponsored Senate bill demands that the Fed invest billions in bitcoin. Even Kamala Harris is reportedly more open than President Biden to crypto's potential.

All of this might suggest that the crypto world is finally putting its scandals and unsavory reputation as the playground for crooks and financial charlatans behind it.  

Perhaps it will finally sweep aside stodgy banks and put power back in the hands of the users, delivering benefits such as easier access to basic financial products and services, more competition and improved resilience.

Or perhaps not. Politicians' newfound love of crypto probably has more to do with a cynical bid for younger voter support and Silicon Valley cash than a maturing of a financially perilous set of assets.

If anything, crypto today presents even greater risk to its investors and to our financial institutions than it did before. The fact that the Republican Party is publicly celebrating crypto to American voters could only make matters worse.

I am not a perennial crypto naysayer. Having written a book about digital currencies, I can tell you that Bitcoin has remarkable creative concepts and innovative technology behind it. 

Bitcoin and other such cryptocurrencies are in principle decentralized - which means they are not issued or managed by any institution or agency.

Because the digital transactions of records are maintained on a worldwide network of computers, cryptocurrencies are in principle secure, invulnerable to manipulation by a small group and resilient to failure.

As such, they should theoretically displace the need for trusted intermediaries such as commercial banks, which often use their power to limit competition and restrict broad access to financial products and services.

Unfortunately some of these benefits have fallen by the wayside as cryptocurrencies gained in popularity and speculative forces in search of quick profits took hold.

One major paradox of crypto is that there is now enormous centralization in this unregulated ecosystem.

The Publishing of this Master Essay continues to Part 2. The World Students Society thanks Eswar Prasad.