Chapter 37 — Key Takeaways

Bitcoin

Poor money (volatile, slow, expensive) but a genuine asset class and technology. Not replacing fiat money. Real uses: remittances, censorship-resistant payments, speculation.

Stablecoins

Fiat-backed (USDC, Tether): functional digital dollars. Algorithmic (TerraUSD): collapsed in 2022 ($40B wiped out). Lesson: algorithmic stability is fragile.

CBDCs

Digital money from central banks. Potential: financial inclusion, faster payments. Risks: privacy, bank disintermediation.

History of private money

Free banking era (1837–1864): chaotic, prone to fraud. Hayek (1976) proposed private money competition. Crypto is a partial realization — with mixed results.

Honest assessment

Crypto: real innovations (programmable money, DeFi) + real failures (volatility, fraud, FTX collapse). Neither revolution nor Ponzi. A new asset class still finding its purpose.