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Why crypto does and doesn’t make sense

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I’ve been looking at buying a small property using my crypto savings. Practically, this creates an interesting dilemma as the seller wants the money in his bank account, whereas I’m trying to persuade him to sell with a payment to a crypto wallet. He doesn’t trust crypto wallets, and has never used them. So, what’s the problem?

Well, after losing a good chunk of cash on the Mt.Gox crash of 2014 (due process is still ongoing), I moved all my money into a cold store on a regulated exchange for double protection. I didn’t realise until trying to withdraw such savings into hard cash, that the place I was storing my funds would only allow cash-out with a limit of $10,000 a day. Therefore, to buy the property would involve making a small withdrawal every day. Oh dear.

Then I am pretty sure it would raise questions from the bank, government and others if they saw $10,000 going through my bank account suddenly every day. Add onto this that I would then need to send the money through the international financial system to be converted from British Pounds to Polish zloty, where major disparities of exchange rates and fees for international transfers would apply, and it just doesn’t make sense.

I tried to explain this to the owner of the house and that if he had a crypto wallet, I could transfer the full amount straight away. There would be no fees for currency conversions and no-one from the bank or government would be bothered about such a transfer.

He gave me a quizzical look which, only afterward, I realised that he thought I was a thief, tax dodger and completely untrustworthy person. I didn’t bother trying to convince him otherwise, but it brought home to me the libertarian versus statist view of the world once more.

The fact that I could transfer $100’s of thousands of dollars almost instantaneously across borders, without issue and almost in real-time, is compelling. The idea of doing that through the traditional financial system, where I cash out to send money via a grinding old network that takes days to process, costs a fortune, and punishes me for moving the funds across borders, does just seem archaic.

But then, on the other hand, there are many who don’t trust crypto, such as my property vendor. They see the crash of Terra’s UDT and the hacks on bitcoin exchanges, and worry that they will lose out. Intriguingly this can apply equally to a cold store on a regulated exchange.

Will Coinbase go bankrupt? US company warns 98m customers they could lose all their crypto as shares plunge

[Coinbase] has more than 98 million verified users in more than 100 countries, who trade around $310 billion of cryptocurrency every quarter … [However, in the event of a bankruptcy] its users might lose all the cryptocurrency stored in their accounts as they would become “general unsecured creditors”. This means they would find themselves down the pecking order of people owed money by the firm should it find itself in administration. Their funds would also become inaccessible.

Oh dear. What do you believe in? What do you accept? What is money? What creates trust in value exchange? Does it require an intermediary? Who is that intermediary?

The questions are long, and the answers are short. The answer is that money and value is purely what you believe in … until you stop believing in it.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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