Cryptocurrencies: a fast track to a gaffe
I am no economist, so I start with this disclaimer to makes my opinion about cryptocurrency less influential in sphere of economy and finance and stronger as a computer researcher and philosopher. I will not assign turds to cryptocurrencies as investment guru Charlie Munger did, while I do agree that cryptos failed to demonstrate an intrinsic value collectively held by humans in real markets. This current disaster of plummeting valuation of epitome Bitcoin from highs of 69k$ to lows 20k$ signifies the principle function the cryptocurrencies had and that is utterly a speculative one.
To be honest, all markets are design on gambling mechanism: human attitudes determine value — desire, emotions, feelings, greed, outlook and rat race are intrinsic to market functioning. The value is determined by these less intelligent factors particularly after basic needs are or basic valuation is established. Market forces of supply and demand in principle, exploit these emotions and after needs are satiated, everything lies in psychological realms.
Now, slews of these virtual coins emerged out of thin air and they illustrated no special intrinsic value in real world. Fascination in perceptions is born from novelty of ideas — like blockchain: a good proof of concept of distributive virtual ledger and an incipient notion to independent contractual binding, and then the notion of proof of work is also a well thought out metric for production control in virtual spaces, while outrages cons lie in solving complex mathematical problem being energy expensive with little valuable contribution to human civilization. These technological prowess of cryptocurrencies are amazing and the gambit to achieve a stable value for crypto through pegging to dollars or real assets seems reasonable, whereas empirically, these measures fell flat and swiftly scaled by speculative instincts of species gambling them.
To correct the wrong, cryptocurrencies must live and evolve in virtual worlds. For the start, they must connect virtual objects in virtual spaces like games and meta-verses. These are the testbeds to help tune the short comings of cryptocurrencies, and overtime, people buy, share and exchange virtual objects and services on virtual platforms — meanwhile many virtual vicissitudes in virtual worlds may occur with obviously less harms in contrast to physical domains. In short, it would have been less prone to being speculative instruments especially the type Satoshi Nakamoto might have never imagined. A propitious time for cryptocurrencies to leak to real worlds and objects would likely have been after decades of use in virtual spaces. A transformative leaks to real world with strong intrinsic fundamental established in virtual world. This route would have evolve virtual worlds, objects and currencies to attain an intrinsic structure in conscious of humanity. Subsequently, this transition would have been less volatile and surely would have caused fewer bankruptcy with stronger virtual fundamentals. Such cryptocurrency might have stability beyond real world, and even vicissitudes of real world might have less consequences on stronger crypto world and valuations.
The gaffe was premature virtual currencies inundated to markets, when all they crutched upon were feeble fundamentals to support them. All hikes and bullish talks were emotional malarkey based on unsubstantiated hope of things to turn gold. Indeed, cryptocurrencies need fundamental and strong entangled intrinsic associations and such association in my opinion first comes out of its own virtual space.
