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There’s a quote I often use from John Oliver that cryptocurrency is “everything you don't understand about money combined with everything you don't understand about computers”.
That was 2018.
It’s now 2024, and things are a lot worse. I’ve blogged about the confusion of money recently, and it is not only the fragmentation of money wallets, but the challenge of remembering all the different passwords, keys, access questions and answers and more.
My friend Pål Krogdahl wrote about this the other day on LinkedIn. He was talking about our podcast on smart money, and noted that there’s a darker side to this brave new world of finance [that] revolves around a growing crisis of digital literacy mixed with financial literacy.
“Everything you don't understand about money combined with everything you don't understand about computers”.
This is very true. We have lots who talk about a digital divide, which Investopedia defines as “the gap between people who have access to affordable, reliable internet service (and the skills and gadgets necessary to take advantage of that access) and those who lack it”.
More than this is that, even if you have a strong internet service, do you know how to use it? Are you an expert in HTML, Java, C++ and Python? Do you know the difference between AI and an API? I suspect most people are not. Then let’s move on to money. Does the average person on the street know what cash, cheques and credit cards are, and do they really understand cryptocurrency, stablecoins and CBDCs? I suspect not. Most studies show that the average person only understands they have money or they have not; they can get a loan, or they cannot; they have a mortgage and lose their home if they do not pay it.
But who needs studies? Just look at what happened the other day on TikTok with Chase. Did you hear about it? If not, here is a quick summary. TikTok users thought they’d found an easy way to wealth due to a glitch around a check deposit in Chase's app. It turned out there was no glitch and now many customers owe thousands for being stupid.
So now let’s add AI, APIs, CBDCs and BTCs together and see what happens. Well, here is a good example.
Someone asked me to try their cryptocard this week. I won’t say which company, but it was embarrassing.
It started easily enough, but then moved into verifying my account with a passport or other form of ID. That was OK, but took a bit of messing around with taking a pic of my passport that was clear enough to do the verification.
And I thought that was that but no! The next thing is that it asked me to add an updated Google authentication with the new account and enter the OTP (one time password) from the app.
Well, I’m used to that, so I did it and that was that … but no!
It then told me I had to open a crypto account with weird authentication and recovery words. Card authentication: JUSTVERIFYYOURSELFEVERYTTIMEWITH THISKEYWORDBLOB
followed by twelve words that I needed to remember to recover my account if that failed.
Wow. Now this is getting too complicated for me (even?).
But it didn’t finish there.
The next thing is that I has to add a specific cryptocurrency extension to my account on my browser, which I did, and then connect my account to the extension. Finally, I then had to send crypto from that extension to my new account by bridging tokens across networks and more.
You get the idea.
TBH, I would have given up after the passport verification, but was interested in the process and found it fascinating, frustrating and futile. Even going through the onboarding process was complex enough. Using the cryptocard even worse.
So, after all that, I’m not using a cryptocard and am not interested. There’s enough confusion of money out there. Who needs more?
“Everything you don't understand about money combined with everything you don't understand about computers”.
Related: Will Big Tech Destroy Big Banks?