But the real question to consider is whether society is better off with crypto. Using cost-benefit analysis, we can draw up a simple balance sheet showing the positive benefits and the negative externalities:
POSITIVE SOCIAL BENEFITS
1. Money can be transferred from one person to another without intermediaries such as banks.
2. It provides an alternative to hyper-inflating currencies in places like Venezuela.
NEGATIVE SOCIAL COSTS
1. Data centers waste enormous amounts of energy mining crypto.
2. Crypto facilitates useless financial speculation and criminal activity, e.g., ransomware payments, illicit commerce, etc.
In the final analysis, the benefits are rather small, whereas the costs are significant and will continue to grow as the crypto industry expands.