The case for national digital currencies, not Bitcoin

This article is littered with quite important inaccuracies, most of which I'll try and address in this comment.

> The push for decentralization in cryptocurrencies is the root of most of its problems.

The push for decentralization is actually one of the properties that give cryptocurrency most of it's value. It is based on the notion having sovereign wealth and reduction in centralization creates a system that is censorship and manipulation resistant, giving the ability to lift billions of people from poverty.

> So everyone who joins early, bets that the value will not be stable, but grow exponentially over time

This is actually not true, due to Bitcoin's mathematically provably finite supply, this is a feature of the economic stock-to-flow model. With Bitcoin's halving every ~4 years, it's supply production is systematically cut in half causing supply shock. Understanding that a free market will always gravitate to the soundest money (evident over thousands of years through history), it actually makes perfect sense that adoption will grow.

> Instead we should skip the decentralization part, and have a central bank guarantee the value. This makes it stable, and stable is something we definitely need for a currency.

The key underlying problem with central banking is that the ability to inflate the money supply is too great for a government who wants to spend money it does not posses to achieve it's goals. This is evident in the economy today— just two days ago was reported the highest CPI increase in almost 3 decades. A direct result of central banking policy.

> Proof of work for Bitcoin is a colossal waste of electricity.

A vast majority of Bitcoin mining utilises "waste" energy that is over-produced by power stations for the grid. Bitcoin miners are incentivised to seek this waste energy, because it is the cheapest source of energy and maximises their profit margins. For example: Miners using by-product natural gas from oil drilling to produce mining energy which would usually be burned off in a flame stack. Miners are also seen to be geo-locating themselves close to power sources, this minimises energy lost when transporting over physical space.

In summary, the expenditure of energy on Bitcoin and PoW in general is an extremely efficient use of energy for the security and financial liberty it promises for the billions of people who are either outside of suppressed by the current financial system and monetary policies.

> There are other ways to limit supply in other cryptocurrencies, like proof of stake

Proof of stake is a great algorithm, but there is one key reason that you do not want to use it for a currency. It is a plutocratic system, meaning he/she with the largest wealth controls the entire integrity of the network. Block production, network updates, dispute resolution, monetary policy is all controlled by whoever has the largest stake in the network. You COULD say similar for Bitcoin, but the advantage of Proof of work is that your access to control is through CapEX in deploying infrastructure and competing with Bitcoin's increasing difficulty rate. Even if you manage to overcome this, the network of Bitcoin nodes can also reject your malicious blocks.

> Transactions are anonymous

This is false. Transactions on Bitcoin are completely transparent. Bitcoin is a pseudonymous system, anyone with an internet connection can see every wallet and transaction that is taking place on the network, and a mathematical proof of all transactions that have ever taken place on the network. So if tracing stolen funds is your objective— Bitcoin transactions are so visible, that any of us can prove with 100% confidence the destination of a specific transaction. Thanks to our good friend Proof-of-Work, this history is completely immutable.

> Each country should have their own digital currency, backed by that country's central bank.

CBDCs are no change from the current financial system. The one benefit we may see from a CBDC is lower transaction fees (if you are in USA) but large parts of the world don't face any transaction fees for bank transfers at the moment. Again, the issue with central bank backed currency is that savers and investors money is constantly inflated away, meaning that holding any of the currency long term is a guaranteed loss of purchasing power.

> A simple database with a transaction ledger would be fine.

This notion is extremely dangerous. You effectively introduce a single point of failure to the worlds monetary system. The feeble attempt at scaling this approach at the moment uses 4 times MORE energy than the Bitcoin network, and unlike Bitcoin it's energy expenditure scales linearly with transaction throughput.

There are many other flaws I would like to point out in this article, but I feel like my comment has gone on long enough.