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Why Cyptocurrencies Won’t Be Irrelevant For Long

It’s easy to see the potential of blockchain, but don’t be too quick to discredit cryptocurrencies

Cryptocurrencies aren’t necessary today.

Cryptocurrencies are one of many potential areas of implementation for DLTs, and they may be one of the most important. To understand why digital currencies may one day be the standard value of exchange across the world, we must first examine why today, digital currencies are facing so much blowback. This question is usually met with quotes about the lack of liquidity, regulatory crackdown, capital gains taxes, high costs, inefficient technology, barriers to use, and a host of other problems. But these aren’t really the true reasons that cryptocurrencies aren’t seeing true adoption — they’re more the symptoms of an early attempt at introducing a new form of value exchange.

“I believe in blockchain, not cryptocurrencies,” is the easy response.

Most of the complications plaguing early exchanges of value would have been solved by later, widely accepted uses for the same reason that mass adoption of a cryptocurrency would solve most of its associated problems. A wide user base, massive volume, and reasonable velocity would likely remedy much of the volatility and problems associated with a lack of liquidity. A global demand for a digital currency would be reflected by governmental regulation and besides, the question of how to tax cryptocurrencies would be much less relevant if it fluctuated like the dollar, not like its current 30% swings. Solutions overcoming the barriers to adoption would certainly emerge as demand grew.

The reason that cryptocurrencies today haven’t been adopted is because the world doesn’t need them yet.

But people bought the first cars because they were novel — they were the work of visionaries. Yes some of the mechanics survived throughout the century, but the cars coasting on today’s asphalt trails have little resemblance to their earlier counterparts. Bitcoin appears to share many similarities with the early models of the car. It’s inefficient, expensive, complicated, there’s a pretty serious barrier to entry. It’s likely that the successful cryptocurrencies of the future will share little with the original Bitcoin protocol. Regardless, this isn’t to predict Bitcoin’s collapse or eventual worthlessness.

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