Last week’s overall drop in cryptocurrency prices was a deep blow in the gut of many digital asset holders, as Bitcoin teetered near the edge of $6,000, while Ethereum fell below $200. Crypto bulls remain unabated, with ShapeShift CEO Erik Voorhees saying last month that he’s not expecting the bear market to end soon, even though he’s thinking that the rate of the collapse has “slowed considerably”.
Ethereum Co-Founder Joseph Lubin also observed that we have had experienced six crypto bubbles so far, and each has been pricked by corrections. If we were to listen to the popular opinion of many bulls, we may assume that this is just another price correction. However, some experts are popularizing an opinion saying that we are now going well past the “honeymoon phase” with crypto, possibly for good, and that our relationship with the technology is becoming more “in-depth.”
In an interview with Bloomberg on September 8, Ethereum Co-Founder Vitalik Buterin said that we will not be seeing another 1,000-times growth in anything in the crypto space anymore, especially that many of the world’s average educated people have already heard of blockchain at least once, so the blockchain ecosystem is nearing the point where “there’s a ceiling in sight.”
He pointed out that the growth in Bitcoin and other cryptocurrencies through its first six to seven years was highly dependent on word-of-mouth and aims for wider adoption. Now, Buterin says, “that strategy is getting close to hitting a dead end.”
Consequently, Dogecoin creator Jackson Palmer said that developers in the crypto sphere will have to come up with a new way to entice users of centralized systems to migrate to their decentralized contemporaries. He even went further as to say that the “build it and they will come” attitude won’t be applicable because it assumes that most of the users are already disillusioned with the centralized version that they would be willing enough to pay for large switching costs.
Well Past Honeymoon Stage
Buterin suggests that blockchain developers and crypto personalities should focus instead in the involvement of crypto enthusiasts in a more in-depth manner. Instead of trying to relive the honeymoon stage, he advises to “go from just people being interested in real applications of real economic activity.”
In other words, he is suggesting that we should think less of cryptocurrencies as a mere “investment option” and more as “real and fluid money”. Palmer echoed the same sentiment, saying that major cryptocurrencies like Bitcoin and Ethereum are being perceived as “just another stock” to a lot of people, and this is not entirely their fault.
However, he admits that there “will” be some great startups that will create better platforms for underserved users, even though they may not be in need of a “token”. In fact, we are now seeing many inventions and events in the crypto sphere that urge people to erase the idea of cryptocurrencies being “just another stock”.
One example is the recent stress test conducted by the Bitcoin Cash community earlier this month, wherein the network was able to facilitate 2.1 Million transactions in just 24 hours. They made use of different BCH-dedicated applications and BCH transfer platforms just to see how far the crypto can fare. At that time, the community treated the crypto as what they believe it should be—a currency—and not as a means to make them earn more fiat money. Oddly enough, the cryptocurrency saw a $100 increase in price the day after the stress test’s conclusion.
Utility Tokens 2.0
Other projects are also taking a different approach in attracting people to use their platform. For example, Brave, a blockchain-powered browser which blocks third-party trackers and ads by default, incentivizes its users with its own crypto named Basic Attention Token (BAT). Users can also reward content providers with the said token for their contribution.
The same scheme is also being adopted by various projects that are poised at disrupting different sectors in our community like professional sports and creatives. It could even be safe to say that these are what we can call Utility Tokens 2.0.
Various governments are also being expected to come up with their crypto regulations soon, including the EU, in which its finance ministers met just this weekend to talk about the most pressing matters. Reports revealed that the Belgian think tank Bruegel submitted a report expressing the urgency to regulate the EU’s regulation on crypto exchanges and initial coin offerings (ICOs).
Also, South Korea’s Financial Supervisory Service (FSS) Governor Yoon Suk-heun made a statement last week saying that there is a great need for international coordination for crypto regulation to address age-old issues like money laundering and to improve transparency in transactions.
Eyes On The Prize
Ultimately, the goal of any crypto startup or project should be for digital currencies to be treated as real money, therefore being widely used for all sorts of legal transactions. Coinbase CEO Brian Armstrong even predicted that approximately 1 Billion people would be using cryptocurrencies in the next five years.
Amidst the sheer volatility in the price of many cryptocurrencies, many are wondering whether we have hit the rock bottom of the bearish trend, or if the market will still have lower to go. And even though the market has seen a notable recovery, many are now expressing uncertainty over the cryptos’ near-future fate.
However, Buterin is not equally concerned, as he admitted that there’s a part of him that “would be happier” if institutional trading of cryptocurrencies did not occur for at least another five years or so.
“Ultimately if all that cryptocurrency is, is this thing that millionaires keep buying and selling to each other, then what have we really accomplished?”
Maybe the crypto bubble has now been pricked for one last time. Maybe there will not be any more 1000-percent surges in cryptocurrency price. And maybe we are entering into a new stage of blockchain technology wherein we will see a more mature adoption of digital assets and the innovation as a whole.
But for it to be accomplished, maybe we are the ones who should attain the required level of maturity, one in which we will not see cryptocurrencies as investment options anymore, but as real money—unadulterated, secure, and real.
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