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📆 17 Aug 2022 | ⏱️ 3 minute read
In my last journal entry titled "[Documentary] Line Goes Up - The Problem With NFTs"[1], I talked about my history with cryptocurrency (henceforth referred to as digital tulips[2]), how I regret ever getting involved, and I promoted a documentary explaining how it's essentially a planet-destroying ponzi scheme. In this entry, I want to build on that and talk about why merchants shouldn't accept digital tulips as a form of payment.
As I stated in my entry "Avoid Using Cryptocurrency", the consensus mechanism used by the most popular digital tulip schemes consumes an unreasonable amount of energy. By comparison, the per-transaction energy consumption of fiat is basically zero. By accepting digital tulips, you demonstrate that you don't care about the harm your business does to the environment.
Digital tulips, like all ponzis, will eventually crash. How viable will your business be after that happens? If your business depends partially or entirely on digital tulip payments, what happens when they're worth nothing? Can your business promptly transition to other forms of payment? Will your existing customers accept the new payment methods?
If the degree of your business' digital tulip market exposure is unclear, you will ward off savvy investors. Warren Buffett, one of the most successful investors in the world and CEO of Berkshire Hathaway, has called cryptocurrency "rat poison squared". The "investors" and celebrities who claim to back digital tulips are either grifters, being paid off by grifters, or they're just fools.
By accepting digital tulips as payment and advertising it, you're warding off savvy investors while attracting grifters and fools.
If it's customer privacy you're worried about, you should know almost all digital tulip schemes have a fully transparent blockchain. Despite the false advertising, this effectively makes the transactions less private than if your customers simply used a regular credit card. With a transparent blockchain, anyone with an internet connection can view every transaction. There are firms whose business model is to deanonymize public blockchains. Even Monero, a supposedly private blockchain, suffers from statistical deanonymization vulnerabilities.[3]
Consumer privacy is important. Customers can purchase an anonymous prepaid card in store or you can accept cash by mail, but both options are pretty inconvenient for consumers. Hopefully in the future something like GNU Taler[4] will fill the need for a convenient privacy-friendly digital payment system. Clearly, environmentally catastrophic digital ponzi schemes cannot be the final answer.
After digital tulips finally crash and burn and thousands of people lose their life savings, you'll be able to say you steered clear of the whole mess. In the future, that might even be something to brag about, that one's business didn't get involved in digital tulips.
By accepting digital tulips as a merchant, you legitimize them as a form of payment in the minds of consumers, further perpetuating the ponzi. This is why I made the decision not to accept digital tulips as a donation method even though there's no risk on my side of the transaction.
For a time, I considered accepting Ethereum only after its proof of stake upgrade[5] since it would no longer be harming the environment so much. Then I decided even that was too much involvement with digital tulips. Consumers may first buy Bitcoin, then convert it to Ethereum for the purposes of making transactions. This would nullify the environmental benefits of Ethereum's upgrade. Better to stay out of the ponzi entirely.
I hope business owners will make the same decision I have and reject digital tulips as a form of payment.
Links:
🔗 1: [Documentary] Line Goes Up - The Problem With NFTs
🔗 3: OSPEAD - Fortifying Monero Against Statistical Attack
Copyright 2019-2023 Nicholas Johnson. CC BY-SA 4.0.