Alex Phillips: We need to talk about cryptocurrency

Cryptocurrency to me seems like some sort of Bond villain creation

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The limits to a virtual existence seem increasingly boundless. At first, we just found our old friends and swapped digitised reproductions of grainy polaroids. Then came a multitude of social media platforms, news websites, online shopping and streamed entertainment. Now there’s a whole metaverse out there waiting for us to abandon the material world and jump feet first into the life of your avatar. So it was always inevitable that money would follow suit, and a complex world of crypto currencies really sprang to life in 2009 with the pioneer Bitcoin. Actually, the very first virtual currency was conjured up in 1983, making it the same age as me and almost a decade older than the Euro...

Yet somehow the concept of anything other than hard tender has rather eluded me, despite now there being a multitude of online currencies. A little digging into the idiot’s guide to crypto informs me they are essentially a collection of binary data designed to work as a medium of exchange, without any centralised control and working through distributed ledger technology, usually a blockchain. At this point I entered a fugue state and decided to stick to stuff with the Queen’s face on it.

Well if you are as confused as me, you’ve come to the right place as I haven’t the faintest idea of what it all means and am increasingly worried we are about to be plunged into yet another world where innovation fast outstrips any attempts to impose regulation, and before you know it a wild west exists in some corner of the internet with ominous real world implications. Cryptocurrency to me seems like some sort of Bond villain creation, designed to enable and disguise nefarious deeds, controlled in some murky underground complex with banks of computers manned by geeks rubbing their hands together with glee as capital flight watches real world currencies collapse plunging the world into chaos while only a handful of MIT graduates hold the passwords to unlock billions of dollars worth of missing money.

And yet one in ten of you seem to get this new system with a whole host of apps and platforms being advertised to help you to trade your virtual assets or even become a miner, helping to process and authorise transactions, to get more virtual cash. And if that wasn’t complex enough, some other bright spark has come up with NFTs, or non fungible tokens, which as far as I can tell are digital assets that can be bought and hoarded on the projection of future value much like a meta Van Gogh original. One assumes the distracted boyfriend meme would at this point be worth the same as a Picasso. Almost £10 billion worth of NFTs have already been sold in the UK, and last month, the most expensive NFT went for a song at 124,457 ethereum, which apparently is worth about $532 million. No wonder a chap in Newport pleaded with the council to ferret around in landfill to recover his laptop hard drive containing 7,500 bitcoins he accidentally threw away in 2013, now valued at over 200 million quid.

Yet for all of its beguiling promises of boundless fortune, due to their very nature crypto currencies can be volatile and we are warned of various imminent crashes every other day. So is it safe to invest?

Today, Parliament’s Economic Affairs Committee has been discussing whether to embrace digital currency and regulate it, so if you don’t get what it is, like me, perhaps it’s time to wrap your head around it, because it’s on its way.

Today, we really need to talk about cryptocurrency