Bitcoin peaked at about $ 20,000 on December 17, about a month ago. As I wrote, cryptocurrency is below $ 11,000 … 45% loss. It’s more than that $ 150 billion at market value lost.
In crypto-descriptions, give a lot of handshakes and gnashing of teeth. It’s a neck-and-neck, but I think the “I told you” crowd has an advantage over the “excusers.”
Here’s the thing: If you haven’t lost your shirt on Bitcoin, it doesn’t matter. And chances are, the “experts” you see in the press won’t tell you why.
In fact, the collapse of bitcoin is great … because it means we 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. That’s why.
Bitcoin is justifiably a product of frustration. Its designer openly said that cryptocurrency was a reaction to the government’s abuse of fiat currencies such as the dollar or the euro. It had to introduce an independent, peer-to-peer payment system based on virtual currency, as they were limited in number.
This dream has long been cast in favor of raw speculation. Surprisingly, most people are interested in bitcoin because it seems like an easy way to get more fiat currency! They don’t have it because they want to buy pizza or gas with it.
In addition to being a terrible way to conduct e-transactions – bitterly slow – the success of bitcoin as a speculative game has made it useless as a currency. If it evaluates so fast, why would anyone spend it? Who will accept one when it is rapidly falling in price?
Bitcoin is also a major source of pollution. It takes 351 kilowatt-hours of electricity to process just one operation – which releases 172 kilograms of carbon dioxide into the atmosphere. That’s enough to strengthen a US family for a year. The energy consumed by all bitcoin mines to date can provide energy to nearly 4 million US families a year.
Paradoxically, bitcoin is an old-fashioned success speculative game – not the intended libertarian use – has led to government pressure.
China, South Korea, Germany, Switzerland and France have applied or taken into account the bans or restrictions on bitcoin trading. Several intergovernmental organizations have called for concerted action to manage the bubble. The US Securities and Exchange Commission, which once seemed to approve bitcoin-based financial derivatives, now seems hesitant.
According to Investing.com: “The European Union is imposing stricter rules to prevent money laundering and terrorist financing on virtual money platforms. It is also looking at restrictions on cryptocurrency trading.”
We may see a functional, widely accepted cryptocurrency someday, but bitcoin will not.
… But A Boost for Crypto Assets
Good. Going through Bitcoin allows us to see where the true value of crypto assets is. Here’s how.
You need tokens to use the New York subway system. You can’t use it to get anything else … though could sell the subway to someone who wants to use you more.
In fact, if subway tokens were in limited supply, there could be a lively market for them. They can trade at a higher price than they initially spent. It all depends on how many people there are we want to use the subway.
In short, this is the scenario of the most promising “cryptocurrencies” outside of bitcoin. They are not money, they are verses – “Crypto-verses” if you like. 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 these cryptocurrencies, and that will set their prices. In other words, cryptocurrencies will gain as much value as what you can get for them from people’s connected platforms.
This will make them real assets, with internal value – because it can be used to get something that people value. This means that having such crypto-tokens, you can expect a reliable income or service flow. Critically, just as we calculate the price / earnings ratio (P / E) of a stock, you can also measure future earnings with a crypto-token price.
Unlike Bitcoin, it has no intrinsic value. There is only one price – the price set by supply and demand. You can’t create future income streams, and you can’t measure anything like a P / E ratio for that.
One day it will be worthless, because it does not bring you anything real.
Ether and other Crypto Assets are the Future
I am sure that the crypto-token will air appears as a currency. Sold on cryptocurrency exchanges under the code ETH. Its symbol is the great Greek symbol Xi. Similar to Bitcoin (but requires less energy) is mined over a period of time.
But airtime is not money. The designers call it “the distributed application platform is a fuel for the development of Ethereum. It is a form of payment for machines that perform the operations required by the platform’s customers.”
Ether tokens provide access to one of the world’s most advanced distributed computing networks. It is so encouraging that large companies are falling on top of each other to develop practical, realistic ways to use it.
Because most traders don’t understand or care about their true purpose, the price of ether has skyrocketed in recent weeks like bitcoin.
But as a result, ether will return to a fixed price based on the demand for computing services that people can “buy”. This will represent the price real value can be evaluated for the future. There will be a futures market and exchange-traded funds (ETFs) for this, as it will be a way for everyone to estimate their underlying value over time. As we do with stocks.
What will this value be? I have no idea. But I know it will be more than bitcoin.
My advice: get rid of your Bitcoin and get ether on the next dive.