I’m still on vacation, hiking and biking in various parts of Europe. I’m keeping up with the news, more or less, but am only occasionally and unpredictably in a place and condition where I can actually write something and post it.

But this is one of those times, and I thought I’d post some thoughts in advance of stuff I’ll be doing after I get back. Specifically, in a couple of weeks I’m going to play Emmanuel Goldstein — the designated enemy — at a conference on blockchain and all that. Hey, if you only speak to friendly audiences, you’re not challenging yourself enough. So I thought it might be worth explaining why I’m a cryptocurrency skeptic.

It comes down to two things: transaction costs and the absence of tethering. Let me explain.

If you look at the broad sweep of monetary history, there has been a clear direction of change over time: namely, one of reducing the frictions of doing business and the amount of real resources required to deal with those frictions.

First there were gold and silver coins, which were heavy, required lots of security, and consumed a lot of resources to produce.