Vitalik’s Wrong, Cryptocurrency’s Real Problem, by Allan Stevo

Before there is mass public acceptance of cryptocurrencies, somebody is going to have to figure out something that will make cryptocurrencies useful to the masses. From Allan Stevo at lewrockwell.com:

Vitalik Buterin, a powerhouse in crypto, the mastermind behind the Ethereum network, effectively denounced those obsessed with the price of crypto and its possibility for breeding derivative financial instruments, tweeting recently “I think there’s too much emphasis on BTC/ETH/whatever ETFs, and not enough emphasis on making it easier for people to buy $5 to $100 in cryptocurrency via cards at corner stores. The former is better for pumping price, but the latter is much better for actual adoption.”

But this too misses the point.

Crypto provides no value to the average Westerner. Making crypto more accessible is not enough.

There’s no reason for the average Westerner – my aunt and uncle for example – to care, because crypto brings no additional functionality to their lives. They ask me about it practically every time we talk. When they ask me what to do with it, despite my five years of involvement in the industry, I have no answer.

All crypto, Bitcoin included, is a speculative play at this stage. Like any early stage technology, we have yet to figure out many uses in which Bitcoin beats the legacy competition in functionality.

As an example, for payments, credit cards are better than crypto. So is PayPal. Cash is better too, if only for the network effects, but in reality for far more. That’s why more people use those methods for payments than Bitcoin.

Cheering on or otherwise attempting to rush the price movements of Bitcoin is futile. Praying for its movements is futile. Pitching its potential with slick marketing is more than futile, such marketing is in fact most likely counterproductive as it will leave early adopters disillusioned.

A curse of Bitcoin is that it is a currency and it is unable to be far removed in people’s minds from its very volatile price. Of course, the beauty of Bitcoin as well is that it is a currency. Through it and similar technologies, we will come to know the folly of applying natural monopoly theory to currency.

To continue reading: Vitalik’s Wrong, Cryptocurrency’s Real Problem

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.