Crypto is Not a Fad: 3 To The Moon, 3 Rekt
ICYMI: Latest Sunset Crypto pod is here.
You can tell we’re really back in the groove when the gimmicky posts are flowing. Today, I am Mad Online about people with credentials refusing to acknowledge the beauty of what crypto has built. You’re not gonna believe this, but theoretical economists and other targets of disruption (looking at you, central bankers) are more likely than not to say mean things about cryptocurrencies.
To The Moon
Bitcoin’s CMO, Kevin Pham, pointed out on Twitter today that Ethereum’s value prop is seriously impacted by a smart-contract-having, Lightning-Network-scaling Bitcoin. I don’t think it would go away entirely, but I do believe that cryptocurrency projects that boil down to “like Bitcoin, but with [insert feature]” need to have a long, long, metaphorical look in the mirror and think about what the real need is. Bitcoin Cash is the most obvious example of a coin that has bet it all on one small feature (block size/transaction speed) being its means of differentiation from Bitcoin in a marketing sense. That’s a very bad strategy, in part because average transaction times change for Bitcoin (less than half an hour, as of this writing) and because scaling solutions like Lightning Network will be here eventually, and likely before the masses will adopt crypto enough to even be in a position to anoint Bitcoin Cash. The point is that these strategies are really shortsighted, and Ethereum could very well be the next ecosystem tested. In any event, this is major long run stuff, so let’s all get back to crypto tribalism and arguing!
A step in the right direction is better than no step at all. India has long been a Jekyll and Hyde country as it relates to crypto — its people love crypto but the government hates it and prefers fear-mongering. I don’t really like how the tax is essentially passed to the buyer of crypto, since this is again a deterrent against adoption, but it’s better than the stigma of making it entirely illegal. The article correctly points out that even an outright ban wouldn’t stop people from trading crypto, because flipping the bird to governments and lawmakers is sort of the point, but we’re never going to hit true widespread adoption for as long as the law tries to stamp crypto out.
This is actually a widely recognized corporate information security tactic. Companies clandestinely create mock email phishing schemes and attempt to trick their employees in an effort to promote vigilance and pull everyone into the shared responsibility of protecting the broader organization. In my personal experience, it’s extremely effective. People are more likely to think before clicking on a malicious link, are less likely to take something suspicious at face value, and are more informed on the risks they face.
Applying this to the wild west of ICOs is a great way to inform investors, particularly those who are entering into these risky ventures. Modern, common sense stuff like this is completely lacking from regulators in countries where central bankers are strong on a global scale. I actually can’t believe I’m writing this sentence, but that’s a hell of a job by the SEC.
Rekt
“Faddish” human behavior? Is that what you call a ten year movement with its eye on disrupting finance as we know it? These aren’t freaking Beanie Babies we’re talking about. I have had just about enough of old men who benefit from The Way Things Used to Be serving as the litmus test for whether crypto is here to stay. Warren Buffett, Bill Gates, Jamie Dimon, Robert Shiller, and the rest of that crowd can crow all they want, but that’s not changing my level of conviction one bit, and it shouldn’t impact yours either. If some real information comes to light that makes it clear that crypto is or will be a complete failure, we’ll take that in stride and re-evaluate at that time. That information hasn’t been presented yet, and this definitely isn’t it.
Did I say that I’ve had enough of this crap? Because I was completely lying.
A central banker in a developed country adopting a “blockchain, not Bitcoin” stance is so cliche it hurts. I’m a little surprised Spain, what with its economic struggles over the past decade, isn’t trying some crypto-forward approach like the many trailblazing islands of the world (Malta, Puerto Rico, Taiwan, Marshall Islands, etc). What’s it going to take for a major nation to go all in on crypto? A complete currency collapse? I don’t want to overstate the economic situation in Spain because I’m not suggesting that half the population is out of work or anything, because it isn’t. All that said, it feels like some of these major European economies that have been down for years have the opportunity to try something different, and none of them have.
Oh really? You mean to tell me that Bitcoin prices aren’t mostly driven by the flimsiest of regulation headlines or financial dinosaurs claiming that crypto is a crime haven? The biggest thing crypto needs is hodlers with conviction. As long as we keep treating crypto like a burning building filled with treasure where we’ve got to keep a path to the exit clear while we grab as much as our arms can hold, emotions are going to rule crypto in spades.
