Where should we focus for 2019? No matter how you look at it, 2018 was a horrible year for the entire cryptocurrency scene. Bitcoin was at the forefront of all of this. Frankly, it doesn't matter what top 100 market cap coin you're invested in. The price movements between the coins correlate massively. You can see this by observing the entire market cap. There is no such thing as pure diversification in cryptocurrency.
The events of 2018 have destroyed the trust of many. There is apparent manipulation. There is a lack of spending within the cryptocurrency economy. There is a lack of production within the cryptocurrency economy. The price movements have been entirely driven up due to manipulation from a select few. This speculation is foolish and it has done no good for the cryptocurrency community.
In what ways are we actually better off from the substantial rise in price? We've seen companies refuse cryptocurrency as a payment option. People have stupidly bought into the hype. There has been losses attributed to cryptocurrency. The news coverage has never been more bleak.
It's easy to blame external forces. Blame the government. Blame the federal reserve. Blame what you want. It does nothing to solve the fundamental problems that cryptocurrency has. I believe the problem isn't with the government. The issue has everything to do with ourselves and cryptocurrency itself.
In its current form, to call cryptocurrency a 'currency' is a stretch. There was a $600 billion speculation on the entirety of cryptocurrency. The actual exchange of goods and services using cryptocurrency wouldn't even be 10% of that. Who is actually using cryptocurrency as a 'currency'? Let's be honest, nobody but a dedicated few. Most people are in cryptocurrency to make a short-term profit. So much for Bitcoin taking over the world. The people who use cryptocurrency want to sell out for USD, the allegedly doomed currency.
The increase in market cap was entirely down to speculation. We're supposed to be against stupid bubbles. Bitcoin was itself a response to the 2008 Financial Crisis caused by the pumping of the real estate bubble. The boom and bust cycle does nothing for real growth. Indexed, we're only marginally better off than we were in 2008. In regards to the cryptocurrency economy, the same applies.
The responsible way to develop the cryptocurrency economy is to look at the fundamentals. People are too focused on unrealistic and frivolous projects to grow the cryptocurrency economy. I embrace the knowledge economy wholeheartedly, but not at the expense of the production, resource or service economy. These basics have been overlooked by the cryptocurrency sphere. Why do we need 50 coins (forks) which do the same thing? There are plenty of coins pegged to a USD in the CoinMarketCap 100. There are plenty of coins which do the same task as Bitcoin. In what way do these so-called projects increase the practical reach of cryptocurrency into the lives of people?
We have to be realistic and practical about the issues cryptocurrency faces. The ideology of sitting on your thumbs, doing nothing, has failed us. Passiveness is a failure. By no means am I advocating for central-planning or economically authoritarian measures. I'm advocating for fundamental capitalist principles. Supply and demand. The needs of consumers. The development of an economy. The richest economies on earth are capitalist, yet they have rules. By no means are these countries a failure.
If we want a reasonable increase in market cap, cryptocurrency needs to accommodate for goods and services. It needs to function like an economy. Fortunately we have solutions that already address the issue of goods. A good example being OpenBazaar. The issue of services is more mucky. I believe we need to prioritise services over goods. Most goods sold aren't done on a business-to-consumer basis. It's largely business-to-business. Where cryptocurrency can gain its own value is by service creation.
Service creation is a no-brainer for cryptocurrency. We can improve the value of cryptocurrency by simply expending time and energy to create utility. People will request services, they will be rendered, this will increase the value. As the quality and category of work improves, the value will too. As jobs will require more knowledge and effort, we will see this reflected in the overall price and size of the cryptocurrency economy. This doesn't require the flooding of dollars to pump up the market. It requires ingenuity and the hard-work of others. The resource that the cryptocurrency will be fundamentally based on is people. This will make it independent and stronger than currencies like USD which is heavily dependent on debt than resources or manufacturing.
Not only does rendering services create value, it will inspire people to better themselves to create quality products. They will utilise skills the have and offer them. If you can do the job, you're part of the solution.
The type of work needs to be based in the real world. The digital gig economy is severely limited in categories and scope. Where can you find a person to walk your dog? Where can you find someone to mow your lawns? Where can you find a mechanic? It's most certainly not on a website like Fiverr or Freelancer. It's not even an option online, aside from some classified boards.
When applied on a global scale, services and cryptocurrency has the fundamental power to change the economy of the world. People will have a chance to offer what they're good at, at competitive prices, to a wide range of customers. Not only will workers earn, they will also be consumers for other products. As spending increases, and more services are rendered, the overall economy will increase and this will be reflected in the market cap. Again, you don't need to speculate to grow. This is fundamental basic economics.
What do you guys think?
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