On The Cryptocurrency Craze
As much people suspect by now, cryptocurrencies are in a bubble. At the time I am writing this, 1 Bitcoin equals 2809.54 dollars. Now I’m not sure if 1 Bitcoin should be valued this high, but what I do now is that it’s current valuation is built on gamblers trying to make money.
While I was eating sushi a couple of days ago I heard two tall “bros” talking about their recent investments. I could instantaneously tell that these two guys weren’t the brightest of the bunch so I thought I’d eavesdrop and have some fun. No more than 120 seconds into their conversation one of them tells the other about one of the best investments they had made in the recent months; he says “It’s this thing called Ethereum” the other dude looks weirdly at him as if he just made that word up, to which his friend responds “I don’t really get what it is but I’ve made 50% on my investment in the last 10 days”. I seriously meditated going to him and telling him that hid investment wasn’t going to be worth a lot in a few months, but then I though it would be better to let them find out by himself (that, and that he would have probably beat me up).
When I say that Ethereum or Bitcoin are not going to be worth much in a couple of months I mean it. And the perfect example of this is that a Mark Cuban tweet slamming bitcoin made the price drop (Really? Who the fuck follows Mark Cuban- “The guy who brought radio to the internet”- for financial advise?) and also the two dudes in the sushi bar. People have not yet realized what cryptocurrencies are nor what they can do, they are just buying them because it’s the hot new thing. I am almost certain that this bubble is going to pop and people are going to freak out and become cryptocurrency skeptics. Nevertheless, I also think that the fact that the bubble is about to pop means that we are closer than ever to the actual mass-adoption of cryptocurrencies. And the bubble popping might be the best thing that can happen to cryptocurrencies. This is because, as it has been seen with almost every major innovation in the past century, these “crashes” allow for a certain sober-thought to kick in and for the innovation to reach a point to stability. This period of re-balancing may take some time, though not long, and when it’s over is when we are going to see what these cryptocurrencies can, and will, do to our society. These changes will certainly involve rethinking societies as we know them.
Whenever I think about the current tech and where it might take us, I can’t seem to avoid thinking that all these new innovations are taking the world to a place where power becomes decentralized and we achieve a level-playing field for everyone. For starters, I think the one institution that is going to take the greatest hit is the nation-state. It really does not surprise me, still to this day I can’t comprehend why we humans gift our liberty and power to these so-called “leaders” that are mostly white old men. But I’m not going to get political. I think the two innovations that will KO the nation-state are nuclear fusion and cryptocurrencies. As for cryptocurrencies it seems quite obvious why they would have a huge impact no nation-states. I mean, no central banks? (And I’m not even going to go into how blockchain will make the financial system obsolete and basically wipeout Wall St.) As Rothschild once said “Give me control of a nation’s money and I care not who makes it’s laws”.