The Skeptics Guide to Cryptocurrency

The word’s “cryptocurrency” and “blockchain” have become buzzwords of the present-day, conjuring up images of technologically innovative solutions to many of the world’s problems. Cryptocurrencies promise reduced transaction costs by cutting out the need for third-party intermediaries, like banks, while blockchain technologies have been suggested to provide innovations in accounting and legal professions with smart contracts – self-executing contracts with the terms of the agreement being stored as data across a blockchain network. The technology has even been conceptualized as a platform for secure, anonymous, transparent voting. While these applications are exciting and have potential to revolutionize many industries, it is important to remove our rose-tinted glasses and examine cryptocurrencies for what they currently are; little-understood, volatile, and largely unproven.

It is easy to speculate about the potential of new technologies, but nearly impossible to accurately predict how exactly those technologies will be used in subsequent decades. Cryptocurrencies and blockchain are no exception to this rule. Upon scouring the literature on the topic, one will find many speculative editorial articles, gushing about the promise of cryptocurrencies, the potential applications, how Bitcoin will change the world, and more. Very few articles are truly of an academic nature, using the scientific process to explore blockchain technology and use it in new, innovative ways. Those that are of a higher academic standard are easy for the lay person to ignore because they include daunting mathematical theorems and often require an advanced level of knowledge in computer science to understand. As a result, the topic has become muddy, with the dozens of opinions creating a background noise that makes cryptocurrencies difficult to understand and even more difficult to confidently navigate.

With so few people truly being experts in the field, it can be easy to jump onto the bandwagon and become excited about the promises of a technology you don’t understand; why not listen to a supposed expert who knows better than you do? Why not put your trust in that person’s word since they confidently make assertions about the new technology that you struggle to understand, but want a part of because it’s on the tip of everyone’s tongue these days? Because it’s easier to trust someone else’s opinion than to put in the work yourself; easier to read a single book on the topic and believe you understand it than to read many, and risk becoming victim to the grey, muddy waters. It is an uncomfortable fact to every scientist that the more one learns, the more they realize how little they truly know.

I challenge those of you interested in cryptocurrency and its speculative promises to critically analyse the information you acquire about the topic. Who is the information coming from? Is the article academic and peer-reviewed, or is it an opinion piece? What does the information imply? Is it proven or speculative? I challenge you to put on your skeptic’s cap and be careful about what you read, especially in today’s internet age where anyone can write anything online. The true experts will acknowledge cryptocurrency’s uncertain future. At one extreme, it may be a fad that goes away in 20 years; at the other end of the spectrum, it may eliminate the need for banks in a century or two. The point is that it is all speculation.

We will be posting a series of articles on this website about cryptocurrencies and blockchain. Don’t trust our word at face-value either. We will attempt to remain objective, and will provide sources where applicable, with a goal of educating people who wish to better understand the technology. That being said, we are merely like you; attempting to better understand a confusing, complicated technology. We are no experts, and remain critics. So we welcome you to join us as we put on our skeptic’s cap and attempt to navigate the world of cryptocurrency.