Cryptocurrency is a scam.

All of it, full stop — not just the latest pump-and-dump "shitcoin" schemes, in which fraudsters hype a little-known cryptocurrency before dumping it in unison, or "rug pulls," in which a new cryptocurrency's developers abandon the project and run off with investor funds. All cryptocurrency and the industry as a whole are built atop market manipulation without which they could not exist at scale.

This should surprise no one who understands how cryptocurrency works. Blockchains are, at their core, simply append-only spreadsheets maintained across decentralized "peer-to-peer" networks, not unlike those used for torrenting pirated files. Just as torrents allow users to share files directly, cryptocurrency blockchains allow users to maintain a shared ledger of financial transactions without the need of a central server or managing authority. Users are thus able to make direct online transactions with one another as if they were trading cash.

This, we are told, is revolutionary. But making unmediated online transactions securely in a trustless environment in this way is not without costs. Cryptocurrency blockchains generally don't allow previously verified transactions to be deleted or altered. The data is immutable. Updates are added by chaining a new "block" of transaction data to the chain of existing blocks.

But to ensure the integrity of the blockchain, the network needs a way to trust that new blocks are accurate. Popular cryptocurrencies like Bitcoin, Ethereum, and Dogecoin all employ a "proof of work" consensus method for verifying updates to the blockchain. Without getting overly technical, this mechanism allows blockchain users — known as "miners" in this context — to compete for the right to verify and add the next block by being the first to solve an incredibly complex math puzzle.