Blockchains, what are they good for?

A YEAR ago, Bitcoin and other cryptocurrencies were selling at record prices, with a combined market value of around US$3 trillion; glossy ads featuring celebrities — most infamously Matt Damon’s “Fortune Favours the Brave” — filled the airwaves. Politicians, including, alas, the mayor of New York, raced to align themselves with what seemed to be the coming thing. Sceptics like yours truly were told that we just didn’t get it.

Since then, the prices of crypto assets have plunged, while a growing number of crypto institutions have collapsed amid allegations of scandal. The implosion of FTX, which appears to have used depositors’ money in an attempt to prop up a related trading firm, has made the most headlines, but it’s only one entry on a growing list.

We are, many people say, going through a “crypto winter”. But that may understate the case. This is looking more and more like Fimbulwinter, the endless winter that, in Norse mythology, precedes the end of the world – in this case the crypto world, not just cryptocurrencies but the whole idea of organising economic life around the famous “blockchain”.