Well, I need to take a break from calling bitcoin from high altitudes to say $13,000. I need to write a strategy piece, no one will read it, but it will answer the question: is cryptography a “hula hoop” or not, because people ask.
In the event of a surge or breakdown, there is only one call to make. Is the asset real, or is it a junk pile going through a boom and bust cycle of promoting a public market that the public loves to gamble on but isn’t really a long-term asset?
This call is as fundamental to cryptocurrencies as it was to dotcom boomsters, Nifty Fiftyers, or old Tulip-Bulbers.
Many people, especially now that Bitcoin has crashed, believe that the cryptocurrency has no “intrinsic” value. You can solve the intrinsic meaning, but this question boils down to: Is cryptography a heap of worthless crap?
Like any good test exercise, the answer is in the question. Even compost has intrinsic value.
Encryption has value because it has a use case.
Crypto has much more use cases than horse manure and many of them are more important than growing roses.
Basically, any cockroach you can get back in the race is valuable because anything a human can bet on has a lot of benefits and the difference between a one-year-old KFC in a $100 billion-a-year racing industry and a cheap supply of excellent meat burgers is simply because To a speculative use case, we know that there is a huge amount of gambling on the price of the cryptocurrency. In 1x sales, the horses are worth $100 billion, with Bitcoin, a revolutionary technology, worth 3 times the 100-year-old outdated transfer technology.
Meanwhile, the “black economy” is somewhere between 10% of global GDP in developed countries and 40% is those crazy developing economies where financial chaos reigns. What is the intrinsic value of cryptocurrencies? BTW, there are about $1.5 trillion in banknotes in circulation in the black economy, so crypto is a sideshow when it comes to nefarious transactions. Heaven knows how many trillions of untold “elusive” cash are happily swimming around within the banking system, so don’t underestimate the intrinsic value of cryptocurrencies from that.
But speculation and criminal activity are just a small part of the intrinsic value of cryptocurrencies.
The greater value is rooted in the challenge for rent seekers. Like, for example, banks.
Have you noticed how banks have started their game since bitcoin entered the public consciousness? Gone are the three days transfers, hello instant payments. You can feel that the best banks are adapting to the new reality of digital currencies and financial technology. Old finance is now ‘TradFi’ and will likely be as popular in time as ‘Trad Jazz’. It would be attractive but no longer on top of the pops.
The banking example is just the tip of the iceberg, this iceberg will sink a lot of abusive oligopolists into the market, and when you look for it you find it all over the place. Crypto is the death of gatekeepers, which is why gatekeepers do not like cryptocurrencies, and gatekeepers have a lot of power to fight back. Unfortunately for them and fortunately for us, you can’t put the new technology back in its box. The invention of cryptocurrencies cannot be abolished, and at every level if cryptography is not adopted, laggards, such as the horse as a means of transportation, will become obsolete.
What won’t it be “crypto” in 20 years?
Bitcoin will likely remain at the top of this crypto world
Even if not, there will be some other cryptocurrency, which will start out as nuppence and go to the moon.
CBDCs (Central Bank Digital Currencies) will not catch up because they cannot be programmable money. It may take a century before a country risks its entire economy on the possibility of no errors or hacks in its sovereign currency, so future development will be dominated by private crypto.
In a world where many people still believe that fiat money is trash and gold is the only currency, more than 1,000 years since a bright spark with the idea appeared, it is not surprising that many people think cryptocurrency is rubbish, especially during has crashed. However, in a world where cow dung, or BS for most of us, is worth $20 a ton, tokens that unlock apps like DeFi, NFTs, Metaverse, punt on the next moon, and some high-quality vape, while starting to transform the world of commerce and governance Upside down, it could, and deserves to, control a percentage point or two of the $200 trillion market capitalization of capital markets.