Demand for crypto debit cards soars despite warnings from senior economists

In the week that the US Treasury Secretary warned that bitcoin was extremely inefficient, the demand for crypto credit cards has soared 194 per cent in just one year, finds research.

Either the great and the good in the world of economics, the likes of Janet Yellen and Nouriel Roubini, are stuck in the past, throwing up Luddite philosophy or the millions of people have bought into a lie. Either way, the implications are unfortunate. And now research has revealed that the public are googling the phrase crypto credit card more than ever.

Janet Yellen, the US Treasury Secretary and former governor of the US Federal Reserve, is economics royalty. So when she says of bitcoin: "It is a highly speculative asset, and you know I think people should be aware it can be extremely volatile, and I do worry about potential losses that investors can suffer." Speaking to CNBC, she added: "It's an extremely inefficient way of conducting transactions, and the amount of energy that's consumed in processing those transactions is staggering."

Why bitcoin may pass a one million dollar valuation and why I don’t like it

Also sitting on the economics high table, perhaps a lesser royal or even a pretender to the throne, is Nouriel Roubini, the economics professor from New York University's Stern School of Business, who probably predicted the 2008 crisis more accurately than anyone else on the planet.  To say he is not overly keen on bitcoin is to say that Donald Trump doesn't like CNN much. The economics professor recently said that bitcoin is "produced out of nowhere with we don't know which kind of backing. Every other day there is another billion dollars of it that goes to buying bitcoin."

He added: "We know there are a whole bunch of legal investigations by the DOJ, CFTC, the attorney general's office in New York; they are looking into what's going on."

Unlike the US dollar, Bitcoin cannot be printed with the stroke of a keyboard. Instead, it converts the output from cheap stranded energy sources into something with monetary value

But this is a contrary view; this thread on Twitter explains this alternative way of looking at bitcoin perfectly.

Yassine Elmandjra, a crypto analyst, the author of the Twitter thread, tweeted: "We believe the impact of bitcoin mining is a net positive for the environment.

Stranded energy sources

"The costliness to produce bitcoin is fundamental to its value.  Unlike the US dollar, Bitcoin cannot be printed with the stroke of a keyboard. Instead, it converts the output from cheap stranded energy sources into something with monetary value."

A key point above is the reference to "stranded energy sources," that is to say, renewable sources of energy that could not easily be deployed into other applications.

The Tweets continued: "Even so, bitcoin's energy consumption is trivial compared to legacy financial systems. As measured by electricity costs alone, Bitcoin is much more efficient than traditional banking and gold mining on a global scale."
And that brings us to the crypto credit cards.

According to analysis carried out by CryptoParrot: "The keyword 'crypto debit card' has surged by 194.1 per cent over the last 12 months on the Google Search platform. The interest attained a peak popularity score of 100 in February 2021 while a year ago it was at 34."

CryptoParrot found that "Nigeria leads with a peak popularity score of 100 followed by Australia at 45. Netherlands ranks third with a score of 44, followed by Canada at 40, while the United States comes in fifth at 39.Interest from the United Kingdom ranks sixth with a score of 36 followed by India at 15 while Germany is eighth with a score of 12."

The company stated: "There has been an explosion of companies like Visa and Mastercard getting involved in crypto payment systems through debit cards. At the same time, more merchants are increasingly adding digital currencies to payment methods. It is, therefore, logical that people would be interested in acquiring crypto debit cards."

So, why might someone want a crypto credit card? This blog piece explains the rationale: "What is a crypto credit card. How to pick the best credit card?

It boils down to your belief in central banks and so-called fiat currencies

The blog asks? "Have you fully accepted the world of digital assets, and do you believe that fiat money is worthless? Then crypto credit cards are the perfect choice for you! No longer will you be bound to dollars, yens and euros, as you have the freedom to spend cryptocurrencies at all time."

And that comment takes us back to the beginning. "Do you believe fiat currencies are worthless?" Janet Yellen might be economics royalty, but when it comes to fiat currencies, she is the high priestess, and empress all rolled into one.

And this is what it boils down to, your belief in central banks and so-called fiat currencies, which is to say, currencies such as the dollar, euro or pound are not backed by actual assets.

Cryptocurrencies are backed by something physical — the energy employed to generate them. Contrary to that, if the energy is employed using stranded energy sources, then maybe the argument that they are backed by something physical is a little weak.