There were a few headlines created in the last couple weeks which caught the attention of the general crypto public.
The start of the circus was when Mr. Ethereum himself, Vitalik Buterin, stated that the days of 1000x moves in cryptocurrency were over. While this went viral, it actually was misunderstood. Vitalik claims that his words were actually taken out of context.
Here is how he clarified it:
“To be clear, I never said that there is ‘no room for growth’ in the crypto ecosystem. I said there is no room for 1000x price increases. A 1000x price increase from today means $200 trillion in crypto, or an entire 70 percent of today's global wealth being in crypto. What I actually said is that, because large portions of the population have already heard of crypto, further growth of crypto in any sense must come from depth (i.e., actual usage) and not bringing in more attention.”
So, basically, he falls into the possible but highly unlikely category. His view is we should focus upon DApps and leave it at that. The market will take care of itself. On this point, I can agree.
His view was countered by Changpeng Zhao, the CEO of Binance. His view is that 1000-fold increase is entirely possible even though this accounts for 70% of the global wealth.
Here is what he said:
“I still disagree with this. I will say ‘crypto will absolutely grow 1000x and more!’ Just reaching USD market cap will give it close to 1000x, (that's just one currency with severely restricted use case), and the derivatives market is so much bigger.
“You also can't use traditional market size to measure potential for new technologies or industries. If you used (and people have) taxi market size to estimate Uber's potential, you would be off by quite a bit.”
https://cointelegraph.com/news/can-crypto-record-a-1-000x-return-and-reach-200-trillion-market-cap
I actually agree with him on this point. When dealing with technology, there is no way to tell where it will lead. One thing we do know is that technology tends to increase wealth overall. With all that is taking place in the world of tech, it is hard to predict what the numbers will look like in a couple decades. Who knows, perhaps at that time, $300T global GDP might not be outrageous.
That said, I will state for the record that the cryptocurrency market will be well over $200T, instead coming in closer to $1 quadrillion. There is a caveat to this. I am not referring to the currencies as we know them now.
The number I am referring to includes security tokens which are backed by real assets. These currencies are going to be used to provide liquidity to real estate, partnerships, intellectual property, and art. These assets are very difficult (and costly) to move, hence making cryptocurrency an attractive alternative.
Another piece to this entire puzzle is the fact that cryptocurrency is going to increase the velocity of money. In addition to security tokens providing liquidity, thus speeding up the selling of these assets, we are also seeing the friction removed from the transaction model. Moving money, at the moment, can be slow (and costly). As we already saw with the cryptocurrencies in operation, this is either reduced or eliminated.
As most of you know, my view is markets will behave as they do; they are entities unto themselves. The key is to watch the development. When you get to the core of all of this, we are dealing with a technology. There is going to be a lot of innovation that comes down the road. To look at cryptocurrency as a financial product is a mistake. Yes it has financial qualities but it is a technology. We have not even begun to see what the evolution of it will look like.
The question on people's mind is what will appreciate and what will not? There is no way to answer that with any certainty. I think, at this time, amassing a wide array of currencies could be a sound move. I also believe that it is crucial to ignore the currency itself and, instead, look at the project to determine what is taking place. A lot of the "shitcoins" are that way because they lack a sound project. This is a guaranteed path to failure.
I personally believe that we are entering a new age when it comes to money, currency, and value. The numbers we knew in the past can be thrown out the window. The potential for societal change is enormous. Isn't that where a great deal of value comes from? Look at the mega-tech companies who either are pushing or have passed $1T in marketcap. All of them changed the way people do things in a large way.
This is what cryptocurrency is going to do.
STEEM is one of those blockchains that has applications on it that is starting to change how many of us do stuff. This will continue, in my opinion, with the creativity and innovation that we see from the many developers. There are a lot of ideas floating around which will end up coming to life. Do not be surprised to see a few of them explode over time.
Overall, I think the possibility for enormous growth exists from the point we are at now. Putting a number of anything is difficult so I will just say I do not believe there is a cap on how big things can get. Do you think someone in 1960 could see 40X growth in the US GDP in under 60 years? If we see that same thing again, in another 60 years, the US GDP will be about $800T.
My point is that we cannot tell the impact technology will have on the world and the financial aspect to it. What will the combination of blockchain, machine learning, and robotics do to our financial situation? How much growth will be experienced when these three things merge?
Or, to go one step further, what happens when we start mining some of the asteroids that are around us. One find could create a quadrillion dollars.
Viewed from this perspective, a couple hundred trillion dollars in cryptocurrency is nothing.
If you found this article informative, please give it an upvote and resteem.
Nothing in this article is to be considered financial advice. This is just for entertainment and informational purposes only. Do your own due diligence before buying or investing in anything.
Images from cointelegraph article linked in this post.