Is Crypto Dead?

Bitcoin experienced its most powerful bullrun since its inception all the way back in 2013. It took cryptocurrencies just eight years to transform from an obscure digital plaything in the hands of some ‘geeks’ and crypto adepts into one of the most coveted asset classes ever to grace the stage of the global financial system. Cryptocurrencies are now brandishing a global capitalization of over $1.85 trillion, rising on an almost daily basis.

The surge Bitcoin experienced in the beginning of 2021, after a protracted lull in volatility and price hikes from a meager value of just under $6,000 to almost $65,000 in a matter of a quarter is incontestable evidence of the asset class’ power to grow on the wave of application and demand. All spurred by the growing integration and adoption of the given decentralized currency around the world.

The reasons for such adoption are varied, including the weakening of the global traditional financial system, the diminishing share of dominance of the US Dollar in international transactions, and the collapsing faith of people around the world in the ability of fiat funds to provide high enough value-storage possibilities.

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Bitcoin has outstripped gold in terms of value storage as an asset many times over, providing that its volatility is more of a boon than a risk. With its ability to gain hundreds of percent in value over a quarter plummet and then regain as much as 20% in value in under a couple of months, Bitcoin is the penultimate instrument of value storage and profit-generation. However, apart from being a highly coveted trading instrument, Bitcoin is much more – an instrument of payment and value projection, as well as aggregation.

The evidence of cryptocurrencies’ capabilities of acting as a means of value-aggregation is clear if one is to look at the capitalization of such companies as Tesla, Microsoft, PayPal, and many others that adopt Bitcoin and other cryptocurrencies as a means of payment. Once a new clientele that uses decentralized assets is attracted to a company’s target audience, the company appreciates in stocks and is instantly being propelled into a new environment of the digital market, where millions of crypto holders are ready and willing not only to leverage their cryptos, but also to elevate those who adopt decentralization.

When average users and netizens read the news and wonder why crypto is crashing, the answer is always tethered to the law of supply and demand, which dictates the prices of cryptocurrencies and all other commodities on any other market. It would be foolish to think that speculation does not play into the factors affecting the law of supply and demand, just as many others like news backgrounds, usability, geopolitical situations, and others. Speculation is the fuel that drives markets, as the desire to make profits on asset classes is what has originally stood at the birth of virtually all markets.

The same applies to cryptocurrencies, which are reliant on demand – in itself bred by the growing application of decentralization in various industries and the buckling of the traditional financial system under the pressure of disruption. The best crypto to buy is always the one that has the most application in a practical sense, and that is the underlying principle of demand, where Bitcoin leads by a longshot as a means of payment accepted at over 15,000 merchants worldwide.

The Critics

The abundance of criticism regarding cryptocurrencies largely spews from those who are fighting the introduction and adoption of cryptocurrencies worldwide. It is impossible to stem progress – much less stand in the way of making people resort to an inconvenient instrument in their daily transactions, when there is a more convenient alternative at hand.

Why would someone working abroad to fund their families at home pay over 10% in transaction fees to a company like Western Union and for a few days for the transaction to be approved and processed, when they have the alternative of setting up two end-to-end blockchain wallets and send the money they make in the form of cryptocurrencies commission-free and instantly? This is precisely what cryptocurrencies are designed to do – empower the 2 billion-strong army of the unbanked around the world and integrate them into the global economy by giving them financial instruments they have been deprived of by virtue of a myriad of reasons ranging from base social injustice and racism to geopolitical turmoil.

Cryptocurrencies are the alternative to a financial system that has retained all of its flaws and shortcomings for years without even bothering to evolve. By virtue of its monopoly and its constituency as a global leverage mechanism, the global financial system is highly ossified and is based on profiteering schemes that disregard the virtues the world powers propagating such infrastructures are actually standing by. There is no value for human rights and freedoms, when every transaction passed through Visa, MasterCard, or any other gateway is monitored, controlled, and the data of the parties involved can be shared between third parties for any number of reasons and purposes the owners of the data are not even made aware of. This, and the exuberant commissions on transactions coupled with long processing times make the traditional financial system inferior before decentralized systems.

The controllers of the traditional financial system are in need of total surveillance over all operations to be able to control the lifeblood of the global economy. In a war, the truth is always the first victim. But in the 21st century of information warfare, the truth is corrupted and information becomes a weapon that can be tailored to attack a target by hiding behind a veil of credibility. In much the same way, senators, bankers, officials and all sorts of representatives of the traditional centralized world of governance are using their positions of power to discredit a competitor – cryptocurrencies, which is threatening to deprive them of their mechanisms of leverage.

Full transparency of all operations, the immutability of records, low transaction fees and instant transfers on blockchain systems are not being viewed as boons by the puppeteers of the traditional financial system, but as threats that need to be brought in line and controlled just like fiat to eventually degenerate into an ossified system aimed at profit-generation for the elites. The criticism of decentralization that is often heard from diehard proponents of complete centralization are shallow and banal at best, including such poorly constructed arguments as energy-inefficiency and the risks of hacking.

The Facts

Most recent data from the Bitcoin Mining Council states that the blockchain network of the decentralized industry takes up less than 0.1% of all global energy consumption – a negligible price to pay for bypassing inefficient, costly, and considerably more energy-intensive traditional financial gateways. The fact is that cryptocurrencies are competing with traditional financial instruments for dominance, and many governments are starting to realize that the fight for the minds and sentiment of users is already lost.

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Users are being disillusioned by fiat and are transferring their savings into cryptocurrencies, as evidenced by the massive increase in crypto exchange user numbers over the course of the Covid-19 pandemic, which has shaved the global economy clean of its illusions of globalization. With over 63 million unique crypto wallet users on the market, it is merely a question of time before governments start leveraging the possibilities of issuing their own decentralized instruments.

Such tools would be the alternative surveillance and state control instruments, of course, but the inherent virtues of underlying blockchain technologies and the security of belief in the stability of the state would certainly attract vast audiences of both experienced and new crypto users.

The number of hacks of exchanges has also decreased drastically over the past year, showcasing that the decentralized infrastructure is growing more advanced and civilized, allowing investors to enter the market and pour their liquidity to fuel demand.

The Adoption

Many companies are already adopting cryptocurrencies as not only an accepted means of payment, but also as part of their internal structures, after having realized the efficiency blockchain can bring. Among the leaders of adoption, research and development are such giants as Amazon, Microsoft, IBM, PayPal and Google, all of which are testing and fielding decentralized solutions for businesses.

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Retail, however, is the biggest adopter of cryptocurrencies with such names as Burger King, McDonald’s, Overstock, WalMart, and Amazon, along with many others, leading the charge to accepting cryptocurrencies as a means of payment from a tech-savvy, progressive and highly intelligence clientele, which values its privacy and believes in many of the principles of decentralization. Those who adopt are being rewarded with both prominence in the decentralized arena, and cash inflows in the form of crypto assets, which they are free to add to their portfolios and grow or trade based on market volatility – a win-win situation for all involved.

The Outcome

Crypto is not dead, but experiencing a new revival, which is likely to lead to the formation of an alternative digital economy built by the people for the people.

Interesting related article: “What are Blocks?