Recently a friend threw this question my way. Belted this answer out pretty quickly and thought others could benefit from it. Feel free to share it or exercise your right to hate the fuck out of it.
QUESTION:
I’ve been hearing a lot of debate about the legitimacy of cryptocurrency. To me it seems like it has no intrinsic value, completely speculative and eventually going to be a bubble that bursts. Please explain to me the staying power of cryptocurrency.
ANSWER:
There may be a better way to break these groups up, but these 4 seem to simplify it. What group are you a part of?
Crypto / Blockchain as a religion. They see the potential it has to change the direction of humanity and bring more transparency/accountability to many different industries. These people care less about the price and more about the tech.
The speculative investor. Sees a booming / growing industry and sees it as an opportunity to make life changing money by doing minimal work. They usually know very little but have made some money.
The open minded skeptic. Does not understand it. Questions its validity. Looks into it and makes an informed decision about which side he/she will be on. This is the healthiest way to approach new things. Don’t accept them. Question them. Look at the code! Ask a programmer what it means? All of these companies are open source.
The closed minded skeptic. These are usually people who have not pulled the trigger on investing and are afraid to go for it. They tear it down and fight it (and anything outside of their comfort zone). They argue it's a bubble. They argue is a ponzi scheme. They say all these things. Understandably for some of them. But their arguments are no better or worse than evangelizing the tech. Their arguments are protected or shielded by inaction, therefore they can justify just about anything and stand their ground. I feel for these people. Change can be scary. It does not mean its bad, though.
At the end of the day, very few skeptics have dug deep into what this technology is and these "coins" are. Or what this technology has to offer the world. How many of them know the simple fact that the code is open source. They are just protocols over the internet. A new internet that is protected by encryption where everyone in the network agrees on what is legit and what isn't. Transparency. Immutable digital fingerprints. Not to mention smart contracts on top of this.
In order to understand cryptocurrency and Bitcoin, you have to start by educating yourself. Read Satoshi Nakamoto’s White Paper https://bitcoin.org/bitcoin.pdf . Read the ENTIRE Bitcoin Wiki page https://en.wikipedia.org/wiki/Bitcoin . Visit Andreas Antonopolous's YouTube https://www.youtube.com/channel/UCJWCJCWOxBYSi5DhCieLOLQ and watch 10+ hours of him explaining things until you begin to piece it together. Learn what Github is and how to utilize it. Educate yourself (anyone reading this). Listen and learn from people who know more than anyone else. I am not one of them. I just know more than the average person, which does not mean much.
Understand where this all started. Learn the fundamentals of the technology. Bring something to the table if you're going to take a stand.
Buzz words you'll hear are Blockchain, Public Ledger, Smart Contracts, Nodes, Mining, etc. Upon investigating what these mean, you'll find out that the technology encourages the world to hold everyone accountable for all transactions and contracts. The aim is make money and information public, cheap and fast. This mean eliminating unnecessary 3rd parties. Other industries and intermediaries are simply antiquated and technology pushes them aside. We see it over and over and we will continue to see it...The world's monetary system is no different. Banks are no different. And guess what? Governments are no different. Technology will simply improve upon what man created previously. We have an inherent drive to move towards the singularity, for better or worse (I think better). Nothing short of a natural disaster bringing us back to the 1800s will hinder the progress in this direction.
This is a movement that unites the people and gives them financial opportunities through technology that were not previously given to them. This literally is a revolution of mind and spirit. One that takes control back of our lives through the tool that is money. The tool that has been used to enslave and en-debt people. I'm not necessarily saying saying its a conspiracy, but there is simply a better a way. This is simply a better way.
Is it a bubble? Probably. A temporary one. And keep in mind that we have not seen a world market this accessible before. 24/7/365. I don't want to hear it, if there's a big dip in prices, when year over year we are seeing 100+% returns. The bubble argument holds no water. Only time will tell, though.
Intrinsic Value? The day the dollar stopped being backed by gold, this argument lost all its fucking power. Its worth what people will pay for it and the more people who use it, the more it worth. Simple.
Staying power? Transparency. Redistribution of wealth. Accountability. Anonymity. Cheaper. Faster. Easier. Better.
~Join the Revolution~
All thoughts welcome.
~Much Love~
See, I wasn't so sure I had guessed correctly until you mentioned the "Singularity" which confirmed my suspicion was correct.
Your list is fundamentally narrow in scope because your view of cryptocurrency is just through the window of the "tech." I would say point one is correct, so is point two, but the part about how little they know is a bit chauvinistic. Point three is expected, I'm sure you question a great many things and count yourself in this third group, but point four?
No, people who are pessimistic about cryptocurrency have every right and incentive to hold these views. I'm sure there were people touting the effectiveness of lighter than air transportation until the Hindenburg went up in flames, completely unable to fight against the hard reality that the merits of a technology are completely irrelevant to its adoption. Hydrogen is a perfectly fine lifting gas, amazing actually, and there's plenty of ways to not only use it safely (even with aircraft technology before the 1930's!) yet getting anyone to set foot in a modern zeppelin is going to be tough. Perfectly viable, quite reliable, perhaps even economically prudent, but people see one and they think "Hindenburg."
Please, stop focusing on the technical aspects of cryptocurrency. You're not going to brute force the world into accepting it because it'll bring us into an advanced golden age, quite frankly only people who care about those things will listen to that sort of stuff. My tech-illiterate father would read this and tune out, especially if CNN told him this was all a scam, and he is by no means a minority. Most people do not care about bettering the world, most people are just trying to make it in the now. Talk about transparency, redistribution of wealth, accountability, and so on and so on is just going to make the average joe's eyes glaze over and opt for a mainstream media prepackaged opinion that rings closest to what they like. This is the world you live in, it's the same as yesterday's world and the world of tomorrow; nobody cares enough to waste precious time and effort to think about this. Your revolution is a pipe dream if you do not accept this cold truth.
How long will cryptocurrency last? Until the first terrorist group uses crypto to fund a bombing. Media folks will ask, "How could they afford to do this?!" A produced expert will bleat, "Bitcoin!" Crypto's days in the sun are numbered after that, you do not have a right to cryptocurrency in the eyes of the law so it is legal for them to take it from you.
As a long-time member of the American gun culture I can say, without a doubt, that you are not prepared or equipped for that fight. We're so used to the buzzword game, the media dance, the endless bitching at us, the calls for the the cops to round us up and kill us, including our kids, (they might grow up to be gun owners) that all it does now is make us sigh and lazily dance. You haven't built a culture around the adversarial relationship with the government and mainstream society yet, you'll get walked all over chattering on about the technology and the future. Nobody cares about the future, John Q. Public doesn't want his 2.5 kids getting cut down by a suicide vest. Firearms are ingrained in our society, they are our heritage, Mr. Public can have sympathy for me while crypto has offered nothing for him. He doesn't care.
Your revolution will die in the cradle.
Do you want cryptocurrency to last? Make the public care about it. Offer them something other than hollow virtues about the far off future they don't care about and give them something now. What's it good for? Can they get it? Can they use it? Does it cost money? How much? Is it safe? Will they be in trouble for using it? Is it easy to use? This is all they care about. Don't hand me any of that Darwinian nonsense either about, "If they can't figure it out then too bad!" Yes they're too stupid to use it, but you need them anyway. Frankly the world runs on naive idiots, if it's safe to spoon feed them then surely you will succeed.
So answer those questions for them! They need something fast, simple, and easy to use that can truly replace the dollar and euro. So far the services offered out there are a bit limited and, honestly, getting into crypto is a hair-pulling nightmare. Right now the market is way, way, way too volatile and it needs to be more stable. When I go to the store and I pay with "real money" I don't need to check an exchange first to see if USD is good right that minute, I see "$1.98" and then I see "2 / $3.50" and that's all my brain cares about. I'm in a hurry, I got a lot to do, and so does everyone else. Sorry to be the rain on your parade, but make that daily ritual cheaper, faster, easier, better first before you talk about staying power.
Until then, it's a race against the clock. They will want to shut this down eventually and soon.
Let me start by saying I agree with a lot of what you are saying. This was definitely a fired up post that went our pretty quickly. I am aware its not a well rounded argument with cited sources. I didn't take the time to go into detail on every branch of the tree. This question is from someone who does not know much about Crypocurrencies to someone who is deep in it. So this is coming from a place of frustration and venting, to a large degree.
Everyone has every right to have their opinion. I am simply advocating, educating yourself a bit before you jump in the ring and throw empty terms around. The core principles of blockchain are a threat to the banks and governments, so of course, they are going to try to stop it. Who, exactly is this "they" that you speak of, anyway? This is a worldwide thing. Not a US thing. Governments in many other countries are adopting blockchain technology, including the banks in the US! This is a decentralized movement. It does not need to US. It does not need China. Its arrogant to think we are the beginning and the end. This simple fact is the beauty in this movement.
The revolution I refer to is not one with guns. Its a revolution of mind and spirit and it will take lazy motherfuckers a long time to make positive changes for themselves and others, but I believe it will happen on a long enough timeline. Do I need to quote Ghandi or something? The most effective way to make things better is to educate yourself. Strengthen your mind.
You, sir, seem to have a very pessimistic view of humanity.
"Do you want cryptocurrency to last? Make the public care about it. Offer them something other than hollow virtues about the far off future they don't care about and give them something now. What's it good for? Can they get it? Can they use it? Does it cost money? How much? Is it safe? Will they be in trouble for using it? Is it easy to use? This is all they care about."
--I completely agree and I will implement this type of thinking in future work. These are all good questions and...yes...If I wrote a book about Cryptocurrencies they would be in there. A lot of companies are working on solving these issues, so the UI's are simple and easy to use. I'm all for it.
At the end of the day, if we dont implement some serious groundbreaking use cases from some of these crypto/blockchain projects the movement may die. I think the chances of this movement dying is extremely unlikely, though. The gamble on which sub $1 coin will go up next alone is enough to keep this thing going for a while. Let alone all the positive ways our lives can change from widespread implementation of this technology. The more people who are drawn in from some marketing tactic, the more people who are aware of Crypto, the more people (small percentage) will end up deep down the rabbit hole, the closer we are to serious change. This takes time. We are still aways off, but you cant put pandora back in the box.
I appreciate your thoughtful reply. In the end, this discourse is healthy and will hopefully result in growth for both sides.
Cheers!
I wouldn't call my view pessimistic, I am ruled by an apathetic practicality in all matters regarding humanity.
Regardless, I do understand that you made the post fired up and hammered it out quick which I believe I addressed right away in not so many words. There's plenty to be said regarding advocacy and I, too, am advocating in my own way. This emerging crypto world is full of people who seem to forget both the purpose and process of a currency, I'm sorry to be the one to say it, but an aimless revolution is quite useless. Do you know how long I rode the "bring down the banks" train? A year. By 2010 I had realized that the progress was not keeping up with the promises, it's a timeline that has saw Bitcoin transition from something you could buy illicit drugs with into a bloated make-believe commodity where transactions are both expensive and slow. This is not going to change anything and, honestly, the altcoins out there are just baby bitcoins with the same fundamental flaws and fundamental problems.
Gambling on coins is not going to make a lick of difference, in that case it will always be this silly game that people can play until regulation happens and the game is up. That's what I referred to when I said, Until then, it's a race against the clock." Yes, actually, this can go back in Pandora's box. "They" are the power structure you're railing against, they have no interest in your whimsical dreams because it is inherently disadvantageous for them to indulge them. This is a threat to the status quo, and honestly the elephant in the room that nobody wants to acknowledge is that bad people can, have, and will continue to do bad things with cryptocurrency. Do you know how difficult it is to fund a clandestine terrorist group? There are counterterrorism units dedicated to chasing terrorist groups through their money, I would not be surprised if bitcoin has been used to shift funds from sponsor to network to cell. You're not prepared for that hitting the public's consciousness, and as I've said already if some talking head asks the magic question you can be sure the game will be up. There will not be an unregulated crypto game for normal people after that, the USA will be first to cook up draconian legislation and then it will be the EU. Prices will fall through the floor and so many people will be left holding the bag if there isn't a cryptocurrency used as an everyday currency by this time.
So about those questions. All those questions I posed aren't solvable by UI, it takes a fundamentally stable market for this to work as a currency and for this to truly change anything. Currently no coin is displaying the market behavior necessary for stability, the issue of, "I need to see if my internet monies are worth what I thought they were worth," is a glaring fault that will exclude any and all widespread adoption by the regular person. People don't want digital nothings that go up and down while they sleep, potentially leaving them without a means to feed their children, they want things to work. They want the stuff they have to remain there, forever, until they need to use it. People do not have the time, energy, or patience for the market game under ideal circumstances and absolutely none if their children's welfare are on the line.
This isn't pessimism, this is as pragmatic as I can possibly be and the clock is ticking.