State should back away from crypto

Given Sen. Cynthia Lummis’ mentioning Bitcoin during her ill-advised graduation address at the University of Wyoming a few weeks ago, it seems fitting to discuss how bad cryptocurrency is as a followup.

Cryptocurrency isn’t what its backers claim it is. If anything, cryptocurrencies are products designed to consolidate wealth for early holders and mirror schemes involving pyramids. They have no value in and of themselves either. The only value they generate is through how much money is fed into a currency’s ecosystem by people buying into it. As people buy, the value increases, but once a mass sale hits, those still possessing the cryptocurrency find themselves holding a worthless thing that they paid money for. Entire scams have developed using the hype around cryptocurrency, with projects bilking people for millions of dollars and giving those impacted no resources to recoup their losses because of how unregulated the cryptocurrency space is.

Cryptocurrency is a deceptive name for digital tokens like Bitcoin and Etherium. As a currency, they’re not great because their value can and will shift wildly in a short amount of time, which makes it unreliable as a means of payment. Who wants to go to a restaurant and buy a meal only to discover the cost of that meal increased significantly between when the order was taken and when the check was delivered or, conversely what restauranteur would sell a meal only to discover the value dropped significantly before being paid for it?

However if you look in some corners of the internet, or even the Cowboy State, you’d see people, Lummis included, proclaiming cryptocurrencies the future. Tyler Lindholm, a former Wyoming legislator who works as Sen. Cynthia Lummis’ state policy director, routinely shares pro-cryptocurrency posts on his Twitter feed, even announcing his purchase of livestock with Bitcoin. Lindholm, known as the “Crypto Cowboy,” was a key voice when Wyoming drafted laws to make the state more friendly to cryptocurrency and blockchain technology, which is often the underpinning system managing cryptocurrencies. Lindholm’s boss has also been actively supporting crypto causes in Washington, D.C., being involved with many high-profile figures in the space.

Unfortunately, none of this will benefit Wyoming in the long run. Very, very few jobs in Wyoming have been created through the state being so open to blockchain and cryptocurrency. The base lure of cryptocurrency is the promise of riches for a small investment, but for a vast majorities of holders, that simply has not been the case.