Open Letter #1 to the Crypto Community
One of the main problems for the future of the crypto-currency movement is (paradoxically) it's success measured in rising values.
Over the eight years that Bitcoin has been around the value of the "coin" has skyrocketed. I have heard countless stories where someone related how a few years ago they sent someone 10 Bitcoin to cover the cost of a lunch they shared. Now when that individual looks back, they see that those 10 Bitcoin are now worth over $30,000 USD. That's one expensive lunch! So any student of recent history would learn from this story and understand that it is in their best interest to NOT use their Bitcoin, but instead, hold on to it. This holding (hoarding) is counterproductive to the growth of the movement.
The word "currency" means "movement". For a currency to function there has to be movement from party to party otherwise it stops being a viable currency and the asset reverts to a store of wealth. This is exactly what we now see happening to Bitcoin. All fiat used in the world today has a built in mechanism called inflation that forces everyone to use their fiat as soon as possible or suffer a loss in purchasing power.
So Bitcoin is (as of today) more of a store of wealth than it is a viable currency and that's ok but what of projects like Litecoin or Dash or Monero or Zcash that are in fact trying to be come the crypto alternative to fiat cash?
Dash's (Charlie Shreem) recent announcement that he has struck a deal with Mastercard to release a debit type card that will allow users to effortlessly pay for purchases with Dash seems like a fantastic advancement for the crypto movement as it will definitely enhance currency flow.
But lets think this through.
The Powers that Be at Mastercard are not stupid, they are well aware of the huge increase in the price of Dash in the last few quarters and can extrapolate that success into the future. So what I see is that Mastercard will complete the payment process using it's own funds but hold on to the Dash used in the transaction.
Thus the more Dash used in conjunction with this card the more Dash falls into the hands of Mastercard (who will hoard it for potential profit) and therefore less and less Dash will be available for use by the community. I sincerely hope that safeguards have been put in place to stop this from occurring.
The better way for this currency flow enhancement that Charlie envisioned would have been to promote B2B and B2C transactions through something like the Bitgo project.
Looking forward, for the overall Crypto movement to succeed there needs to be an incentive to enhance the flow of the crypto-currencies. NEM has integrated POI (Proof-of-Importance) into their consensus algorithm which promotes usage of the currency. I believe this to be a good start and something for the many projects leads to recognize.
Do you remember when in 2015, people still thought that bitcoins were worthless?
Even with the current developments, I think we're only seeing the beginning. What an exciting time to be alive and have front seats at the show!
Thanks for your good posts, I followed you!
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