I have been spending a bit of time looking into the crypto landscape and I feel that of the many things that crypto claims to enable, the point about it being something that reduces financial exclusion is the most idiotic.
Yes, a lot of people who got on to it early on, who were the unbanked or with terrible credit scores, are now wealthy and they can now access services that would have been otherwise denied to them. That population is a really tiny percentage of the world’s unbanked population. And acquiring that kind of wealth for the poor who are not in the crypto game right now is not even an outlier of a possibility.
This applies even to art. Minting an NFT on one of the networks built on Ethereum is prohibitively expensive for artists who are struggling to get by. It is a system that has a higher barrier to entry than the flawed system it is aiming to replace. How is that better?
If anything, we are replacing one set of rent-seeking landlords who built early with another, but the larger malaise is the same, if not worse.
So much of crypto is just people with little exposure to social systems and networks at a population scale trying to design solutions based on their own limited experience. Large networks, at population scale, need solutions that work reasonably imperfectly majority of the time.
When those systems fail, which they inevitably do, you have redressal mechanisms and guard rails that are designed to protect the weak and vulnerable. And you hope this takes care of most people. We have hundreds of years of evolution and improvements that has resulted in the way things are today. That does not mean it is perfect, but it also does not mean something brand new is what will work better starting tomorrow.
Crypto is flying blind right now without any of those. In the coming decade, when they build all those systems, they will figure out that all that looks eerily similar to the system it replaced and that we would have been better off improving the old system than to help create a new one where the inequalities are differently structured.
