What ethical considerations, if any, should Catholic have about cryptocurrencies?
An article published on 19 July 2017 suggested that the Vatican may launch a “blessed” cryptocurrency, taxed in favour of the world’s poor. One fear is that nefarious traders would continue their schemes, now under the blessing palms of the Pope. Part of the article said:
It is the “taxation void” of crypto currencies that attracts this initiative. This void is especially attractive given the fact that all crypto transactions are exposed on a general ledger, making transaction taxes so readily enforceable. And what’s more: traders can be taxed without having their identities exposed. The Vatican angle will replace the ugly word of taxation with the uplifting word of charitable contribution.
Some analysts expressed concern that this idea might be preemptively taken up by nimble Muslim clerics, cajoling more than a billion Muslims to trade with a “caliphate cryptocurrency” and pour money to terrorists. It is the very fact that Bitcoin ‘backed-by-nothing’ currency is steadily gaining in value that sends more and more people towards creative imitations, with some hard to foresee consequences.
Source: A Catholic Bitcoin? Vatican may launch a “blessed” cryptocurrency, taxed in favor of world poor
Another article, published 6 June 2018, reprinted from the Institute of Economic Affairs, said this:
The most famous cryptocurrency, Bitcoin, tries to mimic a gold mine. People beaver away using computing algorithms to solve puzzles that earn them a Bitcoin. The supply of Bitcoin is limited and, just like gold, it becomes harder to mine as time goes on. It is because it is limited in supply that its proponents hope it will keep its value and not be subject to inflation.
Unlike gold, however, Bitcoins have no intrinsic value... Because of this, the value of Bitcoin fluctuates wildly as people speculate on it. There is a long history of Catholic teaching on speculation – much of it sceptical. Most economists, though, would argue strongly against any prohibition of speculation, because without speculation prices can deviate from their fair value for long periods, causing significant disruption. Nevertheless, if cryptocurrencies were simply vehicles for speculation, we would have to question their social value.
However, the decentralised systems and encrypted record-keeping used by cryptocurrencies have made them attractive to money launderers, drug dealers, and fraudsters. Certainly, the Church should condemn this activity and any involvement with it, but this is no reason to oppose cryptocurrencies themselves.
The article concluded that because different systems have their own ethical and economic challenges, Catholic social teaching should address these rather than condemning new forms of money out of hand.
Source: A Catholic take on cryptocurrencies
Apart from ethical issues surrounding speculation and possible financial crashes, there is also the question of criminal activity, using Cryptocurrencies to launder money. However, one of the more shocking issues concerns the amount of electricity consumed by such activities and the resulting C02 emissions into our environment. "Mining" for the cryptocurrency is power-hungry, involving heavy computer calculations to verify transactions. Here is an extract from a BBC News article:
Bitcoin uses more energy than Argentina. If Bitcoin was a country, it would be in the top 30 country energy users worldwide. In order to "mine" Bitcoin, computers - often specialised ones - are connected to the cryptocurrency network. They have the job of verifying transactions made by people who send or receive Bitcoin. This process involves solving puzzles, which, while not integral to verifying movements of the currency, provide a hurdle to ensure no-one fraudulently edits the global record of all transactions. As a reward, miners occasionally receive small amounts of Bitcoin in what is often likened to a lottery. To increase profits, people often connect large numbers of miners to the network - even entire warehouses full of them. That uses lots of electricity because the computers are more or less constantly working to complete the puzzles.
Source: Bitcoin consumes 'more electricity than Argentina
Read the article and weep.
P.S. I have no idea if the Vatican has entered into any scheme involving cryptocurrencies, but I believe that the ethical issues surrounding cryptocurrencies should be carefully considered by ALL Christians.
P.P.S. Revelation 13:16-17 came to mind, that "no-one could buy or sell unless he had the mark, which is the name of the beast or the number of his name".
