As Bitcoin's scaling coffee debate escalates toward August 1 I think it's worth stepping back to consider the role of digital assets in our decentralized economy of the future.
Based on the currencies I'm currently aware of I would genuinely argue that the USD Tether coin to a lesser degree and Steem Dollars in particular have a better chance of actually being used to buy coffee ten years down the road than king Bitcoin or any of the other major digital currencies in circulation. USD Tether entered the playing field and whatever it may lack in investment appeal it has more than made up for in utility as the stand-in for USD on what is currently the world's most popular digital asset exchange.
Then we had Steem enter the field with it's weird, triple-currency system incorporating Steem, Steem Dollars, and Steem Power. I have to admit, learning the nuances of Steemit's currencies frustrated me at first as I'm sure it frustrates many users, but once I came to understand the system I realized that separating the currencies by function allows investors to finance the platform through speculation on Steem while encouraging the day-to-day, relatively transactional use of Steem Dollars. Steem Power acts as a reputation system, and on one platform you've covered the three most important forms of value we recognize!
From this standpoint I believe Steem Dollars actually have the greatest potential for use as a daily currency out of any digital asset we've seen thus far.
What does this mean in context of the coffee debate?
I can't speak globally but U.S. citizens typically keep their spending money separate from their investments and right now it's hard for many of them to think about most cryptocurrencies in terms of anything other than an investment. As it's been pointed out since the pizza incident, why buy coffee with Bitcoin worth $2,400 when the same Bitcoin might be worth $5,000-$15,000 in a few months? No matter how hard the developers work to facilitate payment-processing and merchant adoption with user-friendly interfaces and simplified integration platforms, most users still only see the potential for their currency to be worth more of another currency in the future.
I'm sure some will choose to buy coffee with Bitcoin as I'm sure some retailers will choose to accept altcoins. In the long-term, however, I imagine that certain currencies may come to dominate certain markets but when that happens I believe the prevailing blockchains will incorporate the use of multiple tokens serving specific value functions, be they reputation, transactions, speculation, or otherwise.
What will be interesting will be to see the degree to which prevailing blockchains choose to serve wider value-based markets (ex. Reputation, transactions, speculation, etc.) and which ones are able to focus on relatively narrow asset-backed markets (ex. Gold, cloud or fog-based services, fiat-tethered, etc.). Logically I would assume those serving value-based markets will eventually win out but regulatory or other situations could create niches for assets serving specific markets; the legal cannabis market in the U.S., for example.
Will Steem win out? Will fiat collapse? Nobody knows what the future holds but I'm hoping prosperity across-the-board. I would love to know your thoughts on the future of crypto! Please leave comments, questions, love, and suggestions below.
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