What is crypto worth?

While I like the idea of crypto from many aspects, I still think it is fake money.  Why?  Because no human labor was required in order to create it.  It really just comes down to that.  It does not help that it's also not physical.  And the reason that matters is being felt in China where Bloomberg reports that "China’s central bank said all cryptocurrency-related transactions are illegal and must be banned, sending the strongest signal yet on its determination to crack down on the industry".

While the Chinese have worked very hard to create what China is today, it was all done on debt. And thus their currency is at risk.  At the same time, China is now dealing with the fact that the rich are too rich and the poor ain't too happy about it.  Thus, they have an official policy of wealth redistribution in progress right now.  Friends of government will be left alone and those who are less friendly will be targeted.  The Austrian economists called this "picking winners and losers".  In other words, playing economic god. 

Concurrently, getting wealth out of China has never been more difficult.  Bitcoin represents a way to dematerialize your wealth in one location and rematerialize it in another location while you cross the border apparently an empty handed pauper.

At a time when government backed money is under question, the last thing the Chinese need is for Chinese wealth to be escaping the country.  This is why cryptos were never real money.  As soon as China or any other nation decides that the utility of allowing cryptos is over, they will shut them down.  As Ron Paul has famously said for years, "Don't steal" because "The government hates competition".

If something is on the Internet, or in the cloud, the government is absolutely in control of it.  The NSA monitors every single transaction that occurs and stores it with AI looking at everything in real time, flagging those things which do not comply with government policy.

Government can also declare gold and silver to be illegal if they want to. But since these things are physical there is no way for government to track their movement within the economy and there is no way for government to stop such movements either.  This why black markets have always existed in countries where the fake money dies.  And no, it won't be different this time.