Back in the crypto space, it is easy to believe that I only want to believe Bitcoin will continue up the charts past $14,000. Yet I look at the charts I think that is where things are headed short term. Fiat is losing value, it takes more to eat the same as one did when bitcoin was created. Two-parent working households stretching meals. Currency collapsing and people looking for a way to transfer funds worldwide without the hassles of a newly installed regime. Then I look at longterm investment and think that is a only a temporary pump. The ceiling will soon come crashing down. The reasons? The same reasons as I remember hearing years ago: ease of use and government interference. Now I'm back to where I started, with the racks of high society.
The problem with cryptocurrencies is they are difficult to use in everyday settings. Many of the issues concern speed of the transaction, waiting for the blockchain. People can pay for items with the touch of a phone to a pad. Crypto can be tied to ATM cards, but why not just keep my cash in a bank with a card? The only practical use requires chaos in the world, as it can be useful in shielding wealth from economic turmoil. The countries that could use the technology to create a fairer society are exactly the regimes that would reject such transparency in things such as land deals.
Jesse Frederick recently wrote, "I’ve been hearing a lot about blockchain in the last few years. I mean, who hasn’t? It’s everywhere. I’m sure I wasn’t the only one who thought: but what is it then, for God’s sake, this whole blockchain thing? And what’s so terribly revolutionary about it? What problem does it solve? That’s why I wrote this article. I can tell you upfront, it’s a bizarre journey to nowhere. I’ve never seen so much incomprehensible jargon to describe so little. I’ve never seen so much bloated bombast fall so flat on closer inspection. And I’ve never seen so many people searching so hard for a problem to go with their solution."
Perhaps there is more to crypto than Bitcoin though. There are coins and tokens that can serve a purpose for point of sale machines, using mobile applications and QR codes. DASH is the best for the point-of-sale experience because of the very fast confirmations (not needing a block to confirm). Litecoin still has 2.5 minute block time so it is not practical for much beyond online purchases or person to person transactions. there could be value there, I'm just not sure it would be as much over the long term compared to the opportunity costs of tying the cash into crypto.
In trying to get other people not familiar with Bitcoin, I find it had to explain why they need it past earning a few hundred bucks on Coinbase Earn. Businesses can use the technology but I'm skeptical someone who was not engaged in the technology industry would ever venture into any deep crypto space. Just keeping up with the wallets is a hassle. All of the software updates for my NEO wallet alone are a headache. I just want to claim the GAS for the week. Logging into Binance required more than dealing with the Cash App or my bank app to buy stocks in companies I know. People just aren't going to put up with too much engagement to use a small amount of money/value. Cashapp has bitcoin, but why except to see if the price rises?
On one hand, if Twitter or Instagram can find a way to incorporate unleash micropayments/tipping, the connected cryptocurrency would skyrocket in value. The Lighting Network on twitter would be an industry earthquake with cash falling into pockets. The other platforms will follow. Cryptocurrency is looking for a way to change the world. Warren Buffett said to "make money while you sleep or work every day in your life." Finding a way to monetize social media might be the best proof of use case for the general public with Instagram attention spans. Crypto Collectables is a minuscule niche market compared to the use-cases that could be proven using social media platforms. When it takes silly gimmicks like breedable digital animals to keep even the most ardent crypto user interested, some of the core principles get lost in the plot. Which is why I have to hedge my bets and only invest half of what I originally planned into the crypto space. To do otherwise would be foolish, even if I had already budgeted for the investments.
Tether (USDT) is a big reason why. The government is continuing investigations. It seems billions of dollars of tethers have been minted over the last few months. The ringleaders say these are bought by institutional investors and backed with actual dollars. Why would someone with access to hundreds of millions or even billions of dollars wire those funds over to a foreign company that can't keep a bank for more than a few months and is actively under criminal investigation in multiple countries? Is it not a more likely the tethers are being minted with no real backing and the institutional investor thing is a lie? It is suspected USDT is a fraud and there is no actual backing to the tethers, as claimed. The vast majority (~80%) of crypto trades are denominated in USDT, so if they really are printing the USDT's out of thin air, then the price of all cryptos is massively inflated. The New York Attorney General is currently looking into Tether and associated companies like Bitfinex. If the Southern District of New York brings charges, it only 95% assured someone is getting convicted of something. Just that trial would bring the markets to take a big downturn well before any verdict or please deal was announced to the public.
