Why cryptocurrencies are the answer

The craze for cryptocurrency can be explained by a host of factors: the allure of getting rich quick; the attraction of off-the-grid accountancy for malefactors like tax evaders and drug dealers (though Bitcoin is traceable); the glamour of the new. Despite blockchain currencies’ wild volatility thus far, I’d still posit that the more underlying attraction is to a reliable store of value. Bitcoin investors may not recognise their motivation as such, but the impulse behind computer-generated currency is revolutionary: to take the production and control of money away from government.

Now that we live in a world of 100 per cent fiat currencies — backed by nothing — governments can print their hearts out, and they do. The rounds of quantitative easing since 2008 — money-printing on Red Bull — may not seem to have produced the inflation many a conservative economist predicted. But they have. Asset bubbles like London and New York property markets, fine art, collectibles, equities — hitting historic highs — and Bitcoin itself are all evidences of inflation.