As always I have been thinking more and more about the cryptocurrency market and its potential future, in doing so there are a number of questions I have been asking myself which I will share with you all. Make no mistake I am still positive about the future of cryptocurrency, I am however constantly asking questions and analyzing potential problems/solutions. I would love to get some of your thoughts on the below questions:
1. Do we need institutional money?
Recently we have seen a lot of news about 'institutional' money entering the space and how it will be of significant benefit to the cryptocurrency market. While I don't doubt that institutional money will likely bring more investment in the market and subsequently higher prices, I am inclined to question what was the original purpose of Bitcoin? From what I understand Bitcoin was created as a means for regular people to escape from traditional markets that are preconditioned to operate in favour of large institutions, wealthy individuals and governments. By introducing traditional market products such as ETFs and derivatives in to the crypto-space, as well as institutional investment, are we not making the same mistakes we have seen before us in traditional markets leading to central dominance?
2. Is there a maximum upside for contract platforms?
Ethereum, EOS, NEO etc are all predicated on providing a platform to host decentralized applications. While at present the relative success of Dapps and the platforms they run on has been limited, no doubt in the future there will be a breakthrough whereby dapps drive the price of the platforms significantly higher. When the price of the native cryptocurrency on the platform reaches significant highs, is there not a point at which the cost of implementing a dapp on the platform outweighs the potential use-case/return, thus making intrinsic value of the native coin/token capped?
3. Can't important crypto-websites be censored?
One of, if not the main benefit of cryptocurrency is the ability for networks to be censor-resistant from governments. While this is true, almost all of cryptocurrency interaction (exchanges, price tracking etc) is undertaken through traditional websites. What is to stop governments banning websites like we see already today? Sure there can be new ones that pop up, but for the most part we have seen how that goes with file sharing websites.
4. Is it realistic to expect people to hold and use multiple cryptocurrencies?
As everyone knows, currently there are thousands of cryptocurrency projects all with their own native coin/token. While we can rest assure that a large number of these projects will fail, what happens to the 'successful' projects that people want to use? Do we expect everyone to hold a wallet wilt multiple cryptocurrencies that they use to interact with different projects/networks? Convenience is of the utmost importance for consumers, does the nature of cryptocurrencies pose a problem in that sense?
5. Will enough people care for cryptocurrencies to gain traction?
Some of the noted cryptocurrency benefits include decentralization, privacy and individual-control. While to most of us already involved in adopting cryptocurrency these benefits are of importance to us, however do they combine to make a compelling enough argument for other people to adopt? We are living through a time when an individual's privacy is continually being reduced by governments and corporations. We have had a large number of bombshell reports (snowden/wikileaks/Cambridge Analytica) exposing the scale of privacy breaches taking place and for the most part the general public don't seem to care.
Not only privacy seemingly a non- issue for most people, but also the rise of corporations centralized power. Recently both Apple and Amazon passed trillion dollar market caps (Bigger than a lot of countries GDP). Both companies along with Google Facebook and Twitter have acquired massive amounts of power that seems to grow by the day as they collect more data. Of most concern is the continued divergence of the state and these corporations. Amazon has a massive contract with the CIA, while the other aforementioned companies seem to be pushing agendas based on their political views.
What are your thoughts on the above?
Please note this does not constitute any financial advice. My thoughts and opinions are mine only and do not represent any qualified analysis or advice. As always please do your own research when investing.
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