The WSJ and The Crypto Conundrum

tl;dr: opinions and facts collide with each other at the Wall Street Journal

I’ve noticed a recent change in tone by the Wall Street Journal as it relates to crypto.

Five years ago, they treated it as a novelty and there would be scarcely one mention a day about it.

For the last 2 years or so, they’ve covered it as an emerging asset and, in fact, had an entire insert about 3 months ago entitled “Investing in Bitcoin.”

Within the past 4-6 weeks, however, the tone has turned distinctly negative. I’m not sure why.

The conspiracy theorist in me thinks that a publication with “Wall Street” in the title and which relies upon the financial services industry has woken up to the fact that crypto is an existential threat to the exiting banking system and, consequently, needs to be stopped.

However, the opinions related about Bitcoin and crypto, run counter to the actual “news” part of their operation.

Take, for example, the edition from Tuesday, May 23rd.

On the very back page, there’s an opinion piece called “Bitcoin’s Value Lies in a Love of Uselessness.”

Ok, fine, that’s your opinion.

However, in the same issue, on page A2, there are two headlines…”Fed Balance Sheet Seen at $9 Trillion” and, more apropos, “Brainard Warns of Digital Money Risks: The Fed governor says widespread use of private funds could affect payment system.”

My question then is, if Bitcoin is useless, why is the Fed governor concerned? Somebody has to be wrong.

But wait, as they say, there’s more.

On the very next day, the attack continued with an Op-Ed headlined: “Ban Cryptocurrency to Fight Ransomeware,?The existence of bitcoin and the rest benefits nobody except criminals and speculators.”

Not only is the exact same issue raised (if it benefits no one is the Fed governor really concerned that moving speculators and criminals to private currency a real threat to the payments system? If so, that means the current payment system is flawed), but the Op-Ed is just full of, well, nonsense.

I was so irritated that I wrote a letter to the editor, which I am sure will never see the light of day, so I am publishing it here.

Dear Sir/Madam,

In his Op-Ed, “Ban Cryptocurrency to Fight Ransomeware,” Lee Reiners writes, “I have been studying the crypto market since its inception and I have yet to identify a single task or process that crypto makes easier, better, cheaper, of faster But don’t take my word for it. Ask any friend why he owns cryptocurrency and then answer will invariably be ‘to make money.’

All I can say is that Mr. Reiners hasn’t gotten as deep as he claims, because if he had, he’d start off with international wire transfers which are paper-based, time-consuming, and expensive compared to sending an international crypto transaction.?From there, he might ask people who live in Venezuela, Argentina, Turkey, or Cyprus if crypto has made the task of providing for their families easier.?Then, he might look to people using crypto-based decentralized VPNs to avoid detection by totalitarian regimes. And what about gamers? They can now take the assets they purchase in-game and freely transport or convert them, which they can’t do in Fortnite??Finally, what about traders, who make the?market more efficient? They can operate 24/7, instead of M-F, 9-4 (oh, except holidays).

I could go, but suffice it to say, on the day before his Op-Ed there was a page A2 article claiming that the Fed Governors see private currency as a threat to the payment system.?If there’s “not a single task” as Mr. Reiners claim, why is the Fed concerned??Are they stupid or is he wrong?

The fact is that there are hundreds of use cases for public blockchain technology, powered by crypto assets.?His reference to blockchain for supply chain only shows his ignorance at the difference between Distributed Ledger Technology and blockchains (which need crypto to provide value).

I’m not saying crypto is perfect, but until the amount of nefarious activity via crypto even comes close to what happens in our traditional system (Danske Bank, JPMC, Citi, ABN Amro etc. have all been fined for money laundering), let’s recognize that there’s good and bad in every tech.

Crypto offers more good than bad, just like the Internet.?Oh..and you can’t “ban cryptocurrency” unless you shut down the Internet.

Jeremy Epstein