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Op-Ed

Mysterious money

January 24, 2022

I know very little about cryptocurrency — and I think I'm glad about that. It seems that imaginary money can increase in price without being inflationary. You just have to believe.

Milt Policzer

By Milt Policzer

Courthouse News columnist; racehorse owner and breeder; one of those guys who always got picked last.

Before we begin this week’s regularly scheduled column, I have to point you to a new piece of legal literature you’re going to want to read. It’s a concurring opinion by Ninth Circuit Court of Appeals Judge Lawrence VanDyke published last week in a case called McDougall v. County of Ventura. It starts at page 46.

It turns out that conservative, Trump-appointed judges can have a sense of humor. You may not like what this guy has to say, but you have to admire the comedy chops.

Respect.

I might have more to say about this next week.

And now on to this week’s column….

Read the following and see if you can spot the problem:

“Our vision is to build a robust and scalable ecosystem that fully maximizes the power of DeFi, creating a wide range of products for our community that encompasses everything from a deflationary token and a core stablecoin for processing payments to cutting edge NFTs and exclusive events for our community….

“We’re passionate about helping to bring cryptocurrency to the mainstream while removing barriers and confusion for the everyday user….”

Yep. Doesn’t sound the least bit confusing.

Why would anyone be tempted by this description?

The quote comes from the beginning of a “whitepaper” issued by a company called EthereumMax — not to be confused with but probably confused anyway with plain old Ethereum. As you may have guessed, the company’s executives and three celebrity promoters have been sued in federal court in Los Angeles for, allegedly, promoting “EMAX tokens” and taking a profit before the market for whatever this is crashed.

I will now ask a series of stupid questions.

Why would you buy something you clearly don’t need just because a boxer, a reality star and a basketball player told you to?

Why would you need cryptocurrency to pay for stuff when you can use regular money?

Why would you invest in something that’s based on I don’t know what but definitely not a company that does things or property that exists in the real world?

I know, I know. Dumb questions. Clearly, I know nothing of the crypto world.

On the other hand, let’s go back to the whitepaper: “EthereumMax aims to create a reserve currency that is backed by crypto assets within its ecosystem which will derive value from growth in the system rather than price appreciation.”

Who needs price appreciation when you’re investing in something?

And, yet, isn’t price appreciation what cryptocurrency is all about? If you’re not familiar with this topic — and I count myself among you — the concept requires some Matrix-style mind-bending.

What you’re told, over and over again, is that crypto is not inflationary because the amount of it is limited — although the amount of different kinds of cryptos is not limited. But the value of the currency can go way up. Hence, there’s inflation in the price of the money but not inflation in the use of the money?

Let us turn back to the federal lawsuit: “The misleading promotions and celebrity endorsements were able to artificially increase the interest in and price of the EMAX Tokens during the relevant period, causing investors to purchase losing investments at inflated prices.”

Inflation of the non-inflationary.

I’m keeping my pennies under a mattress (in an undisclosed location).

Another warning. This is also from the lawsuit: “The EMAX Token is a speculative digital token created by a mysterious group of cryptocurrency developers….”

And yet the plaintiffs invested. I guess there’s something to be said about an air of mystery.

Stuff I wonder about. Has it occurred to anyone else that the brilliant minds devoted to market manipulation and incomprehensible crypto schemes ought to be devoted to more useful pursuits? You know, like planet-saving or disease-curing?

Has it occurred to anyone else that Thanos might be Q? Whipping up violence and encouraging people to get Covid could wipe out half the population.

Ra’s al Ghul is another likely suspect.

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