Cryptocurrencies in the day and age of renewed inflation fears

The age of cryptocurrencies dawned in 2008. In October that year, Satoshi Nakamoto wrote his famous proposal for a new form of peer-to-peer payments that would bypass the traditional financial system: Bitcoin. The use of blockchain technology for a payment system is without doubt one of the most exciting new developments in finance. I had argued here in December 2017 that Bitcoin is likely to function poorly as a currency. Also, it is not clear that a financial system based on private money will have the ability to generate liquidity in case there is a payments crisis. “The idea of a private, frictionless payment system with 2.6 billion active users may sound attractive.