A article caught my eye referencing the Winklevoss twins calling Bitcoin "Gold 2.0" last year, but I am pretty sure that it has been referred to as that for many years already. Regardless, the article was quoting their predictions that Bitcoin has at least 10x in it and they aren't selling any substantial amount until it hits 500K, as they see that it has to be at least as valuable as gold is, which has a total value of around 10 trillion.
However, if Bitcoin truly take the mantle of Gold 2.0 and becomes some kind of store of value, it must be worth more than that of gold, as while it isn't physical, it has other properties that gold just can't compete with.
Gold is great because you can't make it or fake it and you can hold it and bury it, but it isn't exactly user friendly or mobile. But there is another thing that makes it a bit of a pain in the ass and that is proof of gold, meaning that in order to use it, one has to prove they have it and that creates all kinds of issues like, you have to put your gold in the bank. "Not your bank, Not your gold." Essentially, for it to have practical value, there has to be some level of trust created in what is a very untrustworthy industry.
Of course, Bitcoin doesn't have this problem because all bitcoin is verifiable if needed and it is very mobile, weighing nothing at all and being wherever it needs to be, without having to rely on any financial institution to make sure it is where it should be.
It is because of these kinds of attributes that makes crypto so dangerous for the current economic controllers, as their control relies on their ability to manage the flow of wealth. When there is a new game in town that undercuts and outperforms their offerings, they are in trouble and, they are unable to just pivot into a new methodology, because they are underpinned by a lot of wealth using the legacy systems. Even if they start making the shift, there is no way they are able to move quickly, as to do so would undermine their investment partners and if they do that, they will be abandoned. But, where would those investors go when they can no longer trust the banks to manage their wealth?
The Australian stock market has been hitting new highs consistently, because there is nowhere left for the money to go, as property prices are getting too high, so retail investors just keep pumping their wealth into stocks. The problem is that those companies aren't necessarily making enough money to warrant the investment in, meaning there is a bubble forming with no reality to back it and eventually, reality will win. But, the entire legacy economy doesn't care much for reality, as it is all about obscuring reality and making use of thin air to generate value.
After getting rug-pulled by institutions time and time again, at some point, the retail investors start to move away from investing into the traditional economy, which might not be such a big thing considering the size of the large institutions, but it is.
When ordinary people start investing into crypto, it is more than just taking that wealth out of the traditional investment economy. Technically, that wealth doesn't leave the traditional economy, as when someone buys crypto with fiat, that fiat is then exchanged into something in the traditional economy. The difference is though, that more of it starts to move into crypto and more of the fiat ends up in less fiat holding hands over time. While this is great for the fiat rich on paper, it means that the centralized currencies start to lose transactional mass, meaning that they are being utilized less and velocity decreases.
For the crypto investors though, they are looking for and creating new ways to increase the utilization of their investments, which will mean creating usecase through business. Once this happens, more investors are attracted to investing into what offers the greatest return, which is the model with an increasing transaction volume, not the decreasing one. The more this happens, the more that wealth that underpins the controlled financial gateways starts to abandon ship, as the majority of investor don't care about much else than yield. If the greatest yield as an investor is into a health economy where distribution is good and people are able to organize and manage themselves, so be it. '
What is going to be interesting with crypto is that currently, most people are focusing on Bitcoin and possibly Ethereum. Yes, Bitcoin might hit 500 thousand dollars or even more than that, but it is still only a facet of the crypto industry and most of that wealth is going to likely be used not as a transactional mass, but as one of the decentralized backings for all of the other cryptos out there.
People talk about scalability and speed of transaction, but what would be interesting to consider is how many blocks and transactions are processed by all of the blockchains out there every second This is pertinent because that information is available transparently and for free, and new chains and sidechains are cheap and easy to add as required.
A lot of non-blockchain people (and maybe some in crypto too) still seem to think that there is some kind of perfect blockchain and token that can satisfy all needs for the industry to become a global currency. I don't think this is the case and what is actually happening is that the blockchains are creating both their own economies (like Hive) as well as hosting their owned businesses (again like Hive) that become the working mass of value for the industry. They will talk to each other, they will interact with each other, they will complement each other and in so doing compound their value across the network in ways that is just not possible with the centralized currencies and businesses, as they argue for power over the network, not for giving power to the network.
There are a trillion-plus ways things can change to affect the outcomes of the crypto industry, but at the end of the day, it is going to come down to people asking themselves he question as to whether they want to keep suffering at the hands of the current economy, or build upon the blockchains for something better. While everyone in crypto is hoping for overnight mass adoption and global legitimacy, convincing the world there are better ways to do what they have always been doing, takes time.
I don't know how much time it will take, or how much time we have to accomplish it, but it is best to get going, as time is always running out for all of us.
Taraz
[ Gen1: Hive ]