A Shining Ray Of Hope For Cryptocurrency
Utility Will Be The Decisive Factor
The price action, trading, and speculation brought millions into crypto during 2020–2021. After the hype ended, a long process of research began.
During the previous crypto bull run in 2017, about 10% of crypto-beginners didn’t abandon the market after the prices collapsed.
They found elements in this financial technology difficult to ignore.
The next wave of crypto adoption will be billions, although it won’t be mere speculators or investors. The next wave will be the actual users.
New blockchain users will select the best-performing blockchains, not as an investment, but as a tool, a currency that will contain low fees, instant transactions, and decentralization.
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Understand Crypto Beyond The Investment Factor
The economic response to the Covid phenomenon was inefficient and resulted in a loss of purchasing power. Savings in banks rapidly depreciate as the prices of goods and services are rising dramatically. Inflation is not a joke in these conditions of financial instability (lockdowns, rise of authoritarianism, wars).
We may have some money in the bank just for an emergency, and a year later, we realize this money is not enough to cover even the basics.
We have to invest for fiat money to work for us, and we can select between multiple “asset classes”. The most popular are:
- Real Estate
- Stocks
- Commodities, and for the last decade
- Cryptocurrencies
Investing in cryptocurrency demands understanding the technology and its disruptive potential.
Equally important is the liquidity of a market. The liquid crypto market makes it competitive with various investment assets.
With real estate, we may need months, if not years, to sell a house or land.
Cryptocurrencies are easy to liquidate, however, crypto also comes with extreme volatility in fiat valuation.
In a sense, every investment is a gamble, since we calculate the odds and the potential and explore our options.
We have to invest, though, as our money in the bank is not working with the current inflation levels.
The Metaverse Is Only A Few Years Away
The trading of NFT images is the representation of what this technology has in store.
The use case of NFTs is in the Metaverse, the virtual world we will soon be using at least for hours daily.
In time, we will be allocating more of our time to the Metaverse. The internet is used by billions today, and millions spend most of their day browsing, working, and using the internet.
Reports suggest the Metaverse will produce a value worth of $1 trillion yearly, just in its starting phase, in this decade.
Blockchains will find applications in the Metaverse, but which ones can we assume will be acceptable and adopted?
Transactions that take days to validate and cost $50 or instant transactions with fees as low as a fraction of a penny?
The illusion today is BTC acts as money while it has no chance of mass adoption with a few developers in control.
The future was never about slow, stagnated, and expensive to-use products or networks.
Same for Ethereum, which already abandoned scaling the main chain with sharding. The market will react slowly, but it also seems that large investors do not realize how sidechains are not a scalability solution but a second problem.
Decentralization Is Not Negotiable
Whole industries focus today on reproducing blockchains, but most will eventually fail as they lack decentralization.
A (private) blockchain is not always a solution. It is a macro-scale solution but not one for small businesses.
Perhaps blockchains can work for those corporations that apply vertical integration in their business model but will still be censorable databases under the control of a team (board of directors). It could succeed but doesn’t eliminate trust. Those with access can alter the data.
A centralized blockchain does not propose reliability.
Decentralization presents tamper-proof permanently recorded data, censorship resistance, and cryptographic proof of ownership.
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Originally published at https://read.cash.
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