Cryptocurrencies are a terrible thing. they are the essence of a Ponzi scheme whose value is based entirely on a greater fool prepared to buy it. the promise of alchemy-turning lead into gold has bewitched humanity throughout the ages and cryptocurrencies are just the latest alchemy. do not get me wrong, if rich people want to lose their money, in this or any other way, they should be allowed to do so. the rich should be the vanguards of new things in case something unforeseen and good falls out of them. but we need to protect those vulnerable consumers whose lives are such that almost any get-rich-quick schemes will be seductive, and seven out of 10 times, they will lose their life savings. Cryptocurrencies are Voda[ŏUSoWVhSeaBWbbleŌoneofVheearlieUVrecordedſnancialbWbbleUVhaVVookplace in the 1720s’ britain. meme-based currencies like dogecoin, dogelon mars and doge dash remind me of the infamous plan of one company during the South Sea bubble to raise money “for carrying on an undertaking of great advantage; but nobody to know what it is.”
the cryptocurrency bubble is worse than tulip mania. through the veil of technology, cryptocurrency enthusiasts are leaning on policy-makers to permit them to be exempt from regulation, privatize money, and make money so disconnected from the economy that it YoWldreapſnancialdiUaUVer.Thereareman[reaUonUVoaXoidſnancialdiUaUVerU,bWVone of them is that they ratchet up poverty and inequality. the current money–credit system is not perfect, but like democracy, it is the worst system barring all the others. it has evolved from the ashes of the system cryptocurrency enthusiasts are trying to resurrect.
the current system is vulnerable to attack because money is little understood. Cryptocurrency enVhWUiaUVUhaXeaVVracVedafolloYingbaUedonVheſcVionVhaVVhecenVralbankorgoXernmenV creates money and are busy debasing it in their self-interest. this is not the case, but then again, there is some overlap between cryptocurrency advocates, conspiracy theorists, and anti-vaxxers.TheVimehaUcomeforUomeoneVoUVandWpforVhecWrrenVſaVmone[ system and explain that while it could be better still, it has been associated with far more growth, much more distributed, and has responded better to economic crisis than what came before.
in today’s money–credit system, banks create money when they issue a loan and place the loan’s proceeds into the account of their customers, creating a deposit. money is, in fact, a tradable debt. the bank’s deposit can be used as cash because the bank is a regulated issuer of loans and deposit-taker, which gives the deposit credibility and convertibility. the cenVralbankonl[inƀWenceUVhecreaVionofmone[indirecVl[b[iVUregWlaVor[reqWiremenV VhaVaproporVionofVheloanUneedVobefWndedb[UhareholderŏUproſVU.The[needVo have skin in the game. money creation then is based on thousands of separate decisions b[loanofſcerUandiUmorediUVribWVedVhanacenVrali\edalgoriVhmlikeBiVcoin.AndiVU supply is determined by the private demand for loans, which means it is closely aligned to the economy.
Which of the following is true in the context of the passage?
Correct Answer :
All the above
Solution :
The correct answer is All the above.
Let us analyze each statement based on the information provided in the passage:
1. Statement A: "the author defends the current money–credit system."
In paragraph 3, the author states: "The time has come for someone to stand up for the current fiat money system and explain that while it could be better still, it has been associated with far more growth..." This clearly shows that the author is defending the current money-credit / fiat money system. Hence, Statement A is true.
2. Statement B: "the author rejects the idea that the central bank or government creates money and are busy debasing it in their self-interest."
In paragraph 3, the author mentions: "Cryptocurrency enthusiasts have attracted a following based on the fiction that the central bank or government creates money and are busy debasing it in their self-interest. this is not the case..." By referring to this notion as a "fiction" and asserting that "this is not the case", the author rejects this idea. Hence, Statement B is true.
3. Statement C: "the author backs the protection of poor from menace of cryptocurrencies."
In paragraph 1, the author writes: "but we need to protect those vulnerable consumers whose lives are such that almost any get-rich-quick schemes will be seductive..." and later highlights that financial disasters ratchet up poverty and inequality. This demonstrates the author's support for protecting vulnerable/poor consumers from the risks associated with cryptocurrencies. Hence, Statement C is true.
Since all individual statements (A, B, and C) are correct and supported by the passage, the overall correct choice is All the above.
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