“Experts” get everything wrong with Crypto

Bitcoin peaked about a month ago on December 17, reaching almost $ 20,000. As I write, cryptocurrency is less than $ 11,000 … about 45% loss. It’s more than that $ 150 billion lost market capital.

In crypto-commenting, show a lot of handshake կր gnashing of teeth. It’s a no-brainer, but I think the ‘I-you-yes’ crowd has an advantage over the ‘justifiers’.

Here is what it is. If you just did not lose your shirt with bitcoin, it does not matter at all. And it is likely that the “experts” you can see in the press do not say why.

In fact, the bitcoin crash is wonderful … because it means we can all stop thinking about cryptocurrencies altogether.

The death of Bitcoin …

In about a year, people will not talk about bitcoin in the grocery store or on the bus as they do now. This is why.

Bitcoin is the result of a justified disappointment. Its designer has openly said that cryptocurrency is a response to the government’s misuse of fiat currencies such as the dollar or the euro. It was supposed to provide an independent, equitable payment system based on virtual currency that could not be devalued as their numbers were limited.

That dream has long been in vain in favor of raw speculation. Ironically, most people care about bitcoin because it seems like an easy way to get more fiat currency. They do not own it because they want to buy pizza or gas with it.

Aside from the fact that the success of bitcoin as a speculative game for scoring electronically, which is torturously slow, it has made it useless as a currency. Why should anyone spend it if it is valued so quickly? Who will accept one when it is rapidly depreciating?

Bitcoin is also a major source of pollution. Only one transaction requires 351 kilowatt-hours of electricity, which emits 172 kg of carbon dioxide into the atmosphere. That’s enough to provide one US household per year. To date, the power consumed by all bitcoin mining can supply power to nearly 4 million US households a year.

Paradoxically, the success of bitcoin as an antique speculative game – not its intended liberal uses, has come under pressure from the government.

China, South Korea, Germany, Switzerland, and France have applied or are considering banning or restricting bitcoin trading. Several intergovernmental organizations have called for concerted action to curb the apparent bubble. The US Securities and Exchange Commission, which at one time thought it was likely to approve bitcoin-based financial derivatives, now seems to be fluctuating.

And according to Investing.com, “The European Union enforces stricter rules to prevent money laundering and terrorist financing on virtual currency platforms.” It also examines the limitations of trading cryptocurrencies. ”

One day we may see a functional, widely accepted cryptocurrency, but it will not be bitcoin.

… But an incentive for cryptocurrencies

Good. Leaving Bitcoin allows us to see where the true value of crypto assets is. Here is how.

You need tokens to use the New York subway system. You can not use them to buy anything else … though you could sell them to someone who wants to use the subway more than you do.

In fact, if the subway tokens had a limited supply, they could have a lively market. They can even trade at a much higher price than the original cost. It all depends on how many people there are wish to use the subway.

This is, in a word, the most promising “cryptocurrencies” scenario, apart from bitcoin. They are not money, they are money signs: – “crypto-tokens”, if you will. They are not used as a common currency. They are only good on the platform they are designed for.

If these platforms provide valuable services, people will want those crypto-tokens և it will determine their price. In other words, crypto-tokens will be valuable as long as people value the things you can get for them from their nearby platform.

It will make them real assets, with: intrinsic value – because they can be used to buy something valuable for people. This means that you can reliably expect revenue or service flows from owning such crypto-tokens. Critically, you can measure that future return on a crypto-token price, just as we do when calculating a stock price-to-earnings ratio (P / E).

Bitcoin, on the other hand, has no intrinsic value. It has only a price, the price set by the supply and demand. It can not generate future revenue streams, և you can not measure something like the P / E ratio for it.

One day it will be worthless because it gives you nothing real.

Air և Other crypto assets are the future

Crypto-token Ether definitely it seems like currency. It is traded on cryptocurrency exchanges under the code ETH. Its symbol is the Greek capital letter Xi. It is mined in a bitcoin-like (but less energy-intensive) process.

But ether is not a currency. Its designers describe it as “fuel for running the Ethereum distributed application platform.” It’s a form of payment made to machines that perform the actions required by the platform’s customers. ”

Air signals allow you to access one of the most complex distributed computer networks in the world. It’s so promising that large companies are failing at each other to develop its practical, real-world use.

Because most people who trade it do not really understand or care about its true purpose, the price of ether has skyrocketed in recent weeks.

But eventually the air will return to a stable price based on the demand for computing services that people can “buy”. That price will represent True value which can be evaluated in the future. There will be futures market-exchange funds (ETFs) for that, as everyone will be able to estimate the underlying value over time. Just like we do with stocks.

What will be the value? I have no idea. But I know it’s going to be a lot more than bitcoin.

My advice is to get rid of your bitcoin and buy airtime next fall.