In the midst of the coronavirus lockdowns, actor Ben McKenzie found himself unemployed and depressed. Looking for something to occupy his time, McKenzie’s friend Dave suggested he invest in cryptocurrencies, the new wave of digital money that was gaining popularity during the pandemic. Intrigued, McKenzie began researching the industry, discovering a wild and unpredictable world filled with promises, eccentric characters, and a shaky economic foundation.
Teaming up with journalist Jacob Silverman, McKenzie dove deeper into the world of cryptocurrencies to understand why this unregulated financial system was creating immense wealth. Their journey led to a series of magazine stories, testimony before the Senate Banking Committee, and ultimately McKenzie’s book, “Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud.”
The book is not simply a scathing critique of cryptocurrencies; McKenzie sees no value in them at all. He argues that crypto is not a true currency because you cannot buy anything with it directly. Instead, it serves as an investment that relies on cashing out and using the money to make purchases. He questions why we would trust private companies to issue their own money when history has shown that such systems are prone to fraud.
McKenzie also explores the appeal of crypto in the context of widespread distrust in traditional financial institutions. He acknowledges that the timing of Bitcoin’s release coincided with the subprime crisis of 2008 when public sentiment towards banks was particularly negative. The idea of a peer-to-peer currency outside of government control was enticing, but McKenzie argues that trust is the underlying foundation of money, and crypto fails to provide that trust.
One of the key aspects of crypto that McKenzie challenges is the supposed innovation of blockchain technology. He argues that blockchain has been around since 1991 and is simply a distributed ledger, not a revolutionary concept. He points out that outside of the crypto world, there are very few companies actually utilizing blockchain technology.
McKenzie also criticizes the involvement of celebrities in promoting cryptocurrencies, calling it infuriating. He views it as a marketing tactic to lure more people into the crypto bubble, akin to a Ponzi scheme. However, he notes that despite the hype and famous endorsements, the number of people investing in crypto did not significantly increase.
As for the recent price correction in the crypto market, McKenzie believes it’s just the beginning of the industry’s downfall. He compares it to the online casino business, where regular people need to keep participating to sustain the industry. However, he argues that the charts indicate people are not coming back because they have lost money. He predicts that the crypto industry will slowly decline and ultimately fail.
Despite his negative stance on cryptocurrencies, McKenzie acknowledges that the industry did shine a light on the flaws and inequities in our traditional financial system. The power of banks and legacy financial institutions, as well as the injustices within our system, gave crypto its initial appeal. Ultimately, McKenzie sees crypto as a flawed and unsustainable idea that manipulated and deceived people with its false promises.
In conclusion, Ben McKenzie’s book and insights provide a critical examination of the cryptocurrency industry. While some may disagree with his perspective, his experiences and research shed light on the pitfalls and dangers associated with this emerging form of digital money.