Twenty years ago, I was devoting four solid days a week to writing a Civil War novel that I never finished.
The novel was set in 1861, the first year of the war.
Cryptocurrencies are supposed to be money; but money for the past century has been printed by governments, which control its supply and, more importantly, guarantee its worth.
Two hundred pages in, I was deep into a scene in which the characters (civilians all) conversed over a sumptuous lunch, when I suddenly realized I didn't know how they'd pay for it.
I learned that in 1861 people used banknotes, issued by local banks, to pay for most purchases.
China's crypto crackdown is based on the premise that cryptocurrencies, by being unregulated, foster illegal transactions.
So I dug into the topic of cash in the 19th century.
Until the following year, the only form of legal tender in circulation was the federally issued coin.
Federally issued scrip—later known as the "greenback"—didn't exist.
If you wanted to use paper for purchases, you used banknotes.
Banknotes were convenient, but had a serious downside.
If you carried them, instead of coins, you ran the real risk they'd become worthless overnight, should the issuing bank fail.
And banks failed all the time, especially during financial "panics," which occurred like clockwork every 20 years and whenever a blip in the economy occurred.
China this week put the kibosh on 2021's version of banknotes by banning all transactions that rely on cryptocurrencies.
That may be true.
But even if it's not, I'm troubled by cryptocurrencies, myself, perhaps because their fans—who are avid—remind me of the people who advised me in the early 1980s to invest all my savings in Cabbage Patch Kids (and a decade later, in Beanie Babies.)
No reliable entities backstop cryptocurrencies.
Money, moreover, allows us to make purchases of any amount at lighting speed, with no extra fees and relative anonymity.
Cryptocurrencies allow none of those conveniences and, in addition, are easier to steal.
So what's the allure?
Beats me.
I'll stick to cold, hard cabbage.
