It has been nearly a year since I was a crypto noob. I have learned a lot about exchanges, wallets, types of crypto, and the possible future. The world is on the threshold of change and regardless of how the market looks, the market is here to stay. Kind of.
In this year long bear market, there appears to only be 2 types of news coming from those that care to make their voices heard. Either, “crypto is dying, get out while you can.” Or, “hold steady the market is going to go back up.” So either, super negative, or super hopeful. Where is the realistic perspective?
There are so many unanswered questions about how crypto will be regulated and controlled by the governments and central banks of the world. If you don’t at least think it is possible that the major capitalistic powers of the world had their hand in the creation of or at least help guide it, then you need to read some history books.
Some people believe that the name Satoshi Nakamoto means central intelligence. A reference to the CIA, because what organization would benefit the most from an untraceable currency that could fund wars around the world at the behest of central banks. While that resonates with my anti-government, conspiracy theory way of thinking, the blockchain would allow anyone with enough computing power to track all transactions. Not very secretive. Not like handing someone cash for weapons. So I tend to think that it was not created by the CIA to fund wars, but maybe they had a hand in developing it. If nothing else, the name Satoshi Nakamoto meaning central intelligence just feels like way at poking fun at the actual reality of blockchain technology, that it is decentralized.
Prediction 1: Reduction
When the United States was brand new, there were many, many currencies. Thomas Edison even had one. They were used by different organizations and for different localities. It was very inefficient. Eventually the US government decided to standardize fiat and only allow 1 currency. The US dollar. However, it was backed by gold and silver, which could also be used as currency. At least until the US government said it was illegal and required all bullion to be relinquished. I can see the exact same thing happening with crypto.
There are more coins and tokens than can possibly be useful right now. Most of them must die for the crypto space to really flourish and be useful. I have heard some say that it could be reduced to 50 or maybe the top 10. But the top ten changes every year.
For the sake of simplicity, let us say that the coins that survive will be, Bitcoin, XRP, Litecoin, and Ethereum. I chose these for my example simply because they are well known and they all have a different utility.
Bitcoin is thought of as king since it was the first. It could be a store of value. Where the world’s wealthiest hold their riches. A “gold” standard if you will.
XRP has already solidified itself as the coin that will be used by the world’s banks as well as other major financial players to move money around quickly and cheaply. This could be the replacement for the US dollar as the monetary standard.
Litecoin is essentially a carbon copy of Bitcoin with some modifications that make it more efficient. This could make it the coin used by regular people on a day to day basis. Is Litecoin’s logo silver on purpose?
Ethereum allows other projects to be created on its blockchain. Smart contracts on a distributed ledger is a great idea. One that is being copied by multiple other companies.
There cannot be over 2,000 coins and tokens that all share a half a dozen different functions. While everything could be tokenized, that is not the same thing as having 1,000 different cryptocurrencies used for buying coffee at Starbucks.
Prediction 2: Restriction
They all have a different utility. And while it would be awesome if all of this remained open to everyone, the way the financial instruments are currently regulated, I predict that cryptocurrencies will become very controlled and restricted. “No! How?” you say. Simple. If the governments of the world make it illegal to use crypto in a certain way, the majority of the world will just be ok with it. The 1% that cares about what crypto was meant to be will not be heard.
Most people are so reliant on governments that the idea of going against what a government says is unthinkable. That in itself is on purpose. If you rely on the government to help you live, then the government controls. For example, I am a US Army Veteran (don’t thank me for my service). I get a significant amount of money from the US government on a monthly basis. There are certain hoops I have to jump through to maintain that income, however, I know some of the loopholes since I was also employed by the VA for a time. Currently, if the VA or US government said I had to do something that is reprehensible in order to maintain my benefits, what else could I do other than try and exist without that money. Not a realistic option for most Veterans.
Prediction 3: Taxes
Cryptocurrencies are the greatest financial instrument created, and not for the reason you think. It is the only currency in history that can be complete controlled by the ruling class. The ledger contains all transactions. And while some would have you believe that there is too much data and too many addresses to track, that is just ignorant. A powerful enough computer system could easily turn all that data into information and allow it to be used. This is why no government is really talking about taxing crypto. All transactions are there to be read at anytime in the future. They are not going anywhere. When crypto gets settled, I predict that governments will retroactively tax crypto transactions. I wouldn’t be surprised if governments of the world did the “Swiss bank tactic” played by the US government. Give people the chance to pay taxes on their own first, and then attack those that decided to hold out.
Prediction 4: Wealth Gap
Crypto was meant to be a currency for the people. Or at least that is what those that were a part of it for the first 10 years say. But now it is a rich man’s tool. When crypto becomes mainstream, those that got in now or earlier that were millionaires, will become billionaires. And those that where billionaires, will become trillionaires. All while the regular people stay at the same income level they were always at. If you think the top 1% has too much money now, just wait. The wealth gap will be atrocious.
Prediction 5: Crypto Restructuring
Bitcoin is a brand. The name of the first digital coin. The most well known of all the cryptocurrencies. Many uninformed people I know think that Bitcoin is the name of digital currency in general and not a specific coin. Because Bitcoin is so recognizable, it will be easy to sell to regular Joe’s and Jane’s. But how will the Joe’s and Jane’s of the world get their hands on Bitcoin when the circulating supply gets smaller and smaller every day because of institutional and millionaire Over the Counter purchases as well as all those Bitcoins that have been lost? Simple. The top holders of Bitcoins will hold their coins until the price of a single Bitcoin is something staggering like $1,000,000, or $10,000,000. Then they will start releasing it back to the Joe’s and Jane’s of the world until it is all held by the lower classes. Then Bitcoin will be forced into a death spiral. It will fail like the 2008 housing market crash and Black Tuesday combined. The only people that will lose anything, and they will lose everything, will be the Joe’s and Jane’s of the world. The top players in the financial markets don’t lose money. History proves that.
If you don’t hold it, you don’t own it. Everyone should have an exit strategy for when crypto becomes the last and final shackle of financial slavery that the central banks of the world have been working toward for hundreds, if not thousands of years. I will always have crypto, but I will also own, gold, silver, platinum, palladium, land, watercraft, aircraft, solar power, wind power, weapons, and everything else required to live a self-sustaining life.