What Expensive Watches and Cryptocurrencies Have in Common? They’ll Never Go Extinct!
Occasionally one can stumble upon experts on the Internet who call cryptocurrencies a bubble and predict their rapid and undignified death. Matvey Danilov, our columnist at United Traders, decided to finally dot the i’s and cross the t’s and write about something that everyone understands but chooses to avoid mentioning.
Editor’s note: author’s opinion may differ from that of the editorial team.
The answer to the following question has been one of the biggest secrets of the world for me through my entire life: what is the reason behind premium watch industry’s existence? Well, I was aware that an expensive watch is part of a person’s style and image, that a truly great wrist watch is in fact a work of art — they simply look good, let alone when you wear it on your wrist.
Hack, I can somehow accept a watch with a price tag of $10k, $50k, or $100k. Wealthy people can spend their money as they like. But paying $600k for a watch? A million dollars, or even two? No, seriously, why may one need that?
As it often happens, the answer turned out to be simple but not obvious.
Due to some circumstances, I have some common business with people of diverse racial, national, and social backgrounds, and particularly many of them happen to be proud residents of Taiwan, China, Indonesia, and a number of other Asian countries.
A short while ago one of my partners who is originally from that region but has been residing in Russia for the last 12 years, started surprisingly often asking me for help in buying expensive second-hand wrist watches from both watch pawnshops and individuals. Well, I’m always eager to help but after a dozen of units I was getting perplexed.
Pardon my curiosity but what lifestyle should a seemingly average person have to need to spend a couple thousand euros a week to buy a pretty much optional accessory?
Everything turned out to be very simple. These watches happen to represent a means of cross-border money transfers. One buys a watch in one country, wears it, travels to another country, sells it to a pawnbroker at a discount of approximately 10%, and here you go! You have cash in your hand, and the costs are lower than for legal cross-border transfers. In addition, no one except the parties involved notices the very fact.
The situation became completely clear to me now: although technically no one needs a wrist watch these days as they are literally everywhere around us including microwaves, dish washers and phones, the premium watch market will always be fine because it’s not a watch market at all — it is a money transfer market elegantly wrapped into trading in bells and whistles.
And why I am telling you this is that projections grudgingly made by official experts as to the fate and fortunes of cryptocurrencies incredibly amuse me. To some extent I understand them: while definitely being no fools, due to the official nature of what they say and do, they are simply forced to openly miss an important point — the one attributable to a substantial share of reasons proving why cryptocurrencies are, and will be, just fine.
People, let’s finally say it out loud! For many years now, Bitcoin and the rest of the pack have been a standard for international settlements involving goods and services that officially do not exist, and whose use is legally prohibited in almost every country in the world. To stay compliant with the domestic legislation requirements (that, by the way, I sincerely respect and do my best to strictly follow), I won’t point fingers at specific items that you can pay for with bitcoin and ether; something tells me, however, the readers know what I’m getting here at.
Currently, bitcoin and ether are international leaders in the black and grey markets for everything. This is why tales told by “experts” that crypto days will be over as soon as Indonesia or Malaysia bans payments in ether for coffee and hamburgers are entertaining at best. People engaged in officially non-existent industries who sell something illegal are, en masse, very conservative by nature; and if they managed to force themselves into crypto some time ago, no regulator will be able to do anything about it offhandedly.
Look at China with its total crypto ban — do you really think it works?
All people from China I personally know, who happen to need to use crypto for some or the other reason, successfully continue doing so — literally nothing has changed in this regard.
Previously my thinking was the same as everybody else’s — that value of a cryptocurrency is determined by the amount of electric power required to mine another piece of bitcoin or ether. But now it seems that I’ve been wrong. Bitcoin has become non-fiat equivalent of the US Dollar, that is to say it is not linked to any known and calculable resource. US Dollar is the same beast: its value is determined mainly by the number of operating US military bases throughout the world as well as by fighting capacity of its aircraft carrier groups, which are capable of getting one simple message to any optimist out there and namely that dollar settlements are of binding nature and no return to the gold standard is possible any time soon. (Editor’s note: we do not fully agree with this opinion regarding dollar’s supremacy; it has, however, no effect on the conclusion).
Bitcoin already has no formal value. And it is unlikely to have any going forward. But I assure you, as long as its total supply keeps decreasing, which happens daily; as long as it is accepted as a means of payment in that part of the Internet where you won’t meet anyone from Classmates.com; as long as you can send any amount of bitcoin across any border; and as long as crypto-fiat exchange mechanisms are available, bitcoin will be absolutely fine. And even its exchange rate fluctuations mean little.
Cryptocurrencies have assumed the role of lube in the gear that moves the black and grey parts of the global financial system. And let’s be honest here: the pure white financial system is fundamentally unsustainable. Which means cryptocurrencies are in no danger, and they, or their descendants, are here to stay forever. And no one will be able to ignore that.
About the Publisher
United Traders is a community of professional traders and investors. We develop stock market trading applications and share unconventional investment ideas. We are now launching a cryptocurrency exchange.
Our mission is to make ultimate trading and investment technology available to everyone. Our authors are passionate about trading, all things crypto as well as investing and are willing to give to our audience a detailed and unambiguous account of everything we’ve learned.
For more stories like this, join us on
Telegram
Instagram
Twitter
If you enjoyed this post, please give us some claps 👏 and share it to help spread the ideas. Feel free to leave a comment below.
📌 To stay in touch don’t forget to hit the Follow button!
