Il The Crypto Financial system

But for now, I want to set this objection to the side. If you’re a certain sort of financial person—a financial engineer, an arbitrageur, a market-structure enthusiast, a builder of high-frequency trading systems—this abstract set of facts is incredibly, incredibly beautiful.

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Let’s step back a bit and abstract from what we’ve discussed so far. Crypto is:

1. A set of tokens, which are worth fluctuating amounts of money. We can say that these tokens are financial assets, like stocks and bonds.42

2. A novel set of ways to create new tokens and distribute them and try to make them worth money.

3. A novel way of holding financial assets: Instead of the databases that people use to hold stocks and bonds, you can own your crypto on the blockchain.

4. A novel way to write contracts and computer programs (computer programs that are contracts, and contracts that are computer programs).

If you read only that description, you might object: “Yes, fine, but what is crypto for? What do these tokens do? Why are they worth money?” Nothing in that description answers those objections. I suppose the last one does, in a sense—“Crypto tokens are for building smart contracts for trading crypto tokens”— but it’s not a very good answer, because it’s entirely self-referential. “Yes, fine, but why are you trading the tokens in the first place?”

You wake up one day, and there’s just a whole other financial system. It’s full of smart people building interesting things, and it’s full of idiots making terrible mistakes. People have built brilliant new ways to make financial bets that you can use, and they’ve built insane new ways to make financial bets that you can exploit. How can you not want to join in? It’s so interesting, so intellectually appealing, such a blank canvas for all of your aesthetic views about how markets should work. Also, so many idiots are getting rich; why shouldn’t you?