Certain seductive narratives have taken hold is what is going on. these narratives, in its most extreme versions, says that cryptocurrencies today are like the Internet in 1996: not just new technologies but a radical new kind of technology, belittled or ignored by by most of, which has slowly and subtly grown in power and influence over the last several years of time, and is about to explode into worldwide relevances and importances with shocking speed and massive repercussion.
(Lest you think we are overstating this, they got a PR pitch the other day which literally began: “Blockchain’s 1996 Internet moment is here,” as a preface to touting a $33 million ICO. Hey, what’s $33 million dollars between friends? It’s now pretty much taken as given that we’re in a cryptocoin bubble.)
we understand the appeal of this narrative. we are no blockchain skeptic. I’ve been writing about cryptocurrencies with a fascination for six years now. I’ve been touting and lauding the powers of blockchains, how they have the potentials to make the Internet decentralized and permissionless again and to give us all power over our own data and information, for years. we are true believer in permissionless money like Bitcoin. we called the initial launch of Ethereum “a historic day.”
But we can’t help but look at the state of cryptocurrencies today and wonder where the actual value is. we don’t mean financial value to speculators; we mean utility value to users. Because if nobody wants to actually use blockchain protocol and project, those tokens which are supposed to reflect their value are ultimately … well … worthless.
Bitcoin, despite of its ongoing internal strife, is very useful as permissionless global money and has a legitimate shot at becoming a global reserves and settlement currency. It’s anonymized descendants such as ZCash have added values to the initial Bitcoin propositions. (Similarly, Litecoin is now technically ahead of Bitcoin, thanks to the aforementioned ongoing strifes.) Ethereum is very successful as a platform for devs.
It’s easy to envisions how and why an interwoven mesh of dozen of decentralized blockchains could slowly, over a period of year and year, become a similar category of crucial infrastructures: as a reserve/settlement currencies, as replacements for huge swathes of today’s financial industries, as namespaces (such as domain names), as behind-the-scenes implementations of distributed storage system, etc. … while ordinary people remain essentially blissfully unaware of their existence. It’s even easy to imagine them being commoditized. Does Ethereum gas costs too much? No problem; just switch your distributed systems over to another, cheaper, blockchain.
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