Two Endgames For Blockchain and Cryptocurrencies

Posted December 7, 2021 ‐ 2 min read

tl;dr: HackerNews is boiling daily with debates over the merit (or lack-thereof) of cryptocurrencies, bitcoin, and NFTs. I think there are two opposite endgames - all or nothing.

The determining factor for widespread maturity of a technology is whether it is necessary for modern quality of life.

Electricity, running water, internet in general, internet-based delivery of transportation (Uber), internet-based delivery of goods (Amazon), cars. These are technologies that work very well for people. A medium to exchange good for the represented value of these products and technologies: state-issued currency, credit card, bank account. These also work very well.

So as for blockchain (the tech) and cryptocurrencies (the value exchange), I see two possible futures:

  1. Cryptocurrency and/or blockchain-based technologies (stake/work) wind up as a part of the daily life of almost every person in the first world's day-to-day life, just like the technologies I listed earlier. Whether I like it or not, I have to use it.

  2. Realizing that Scenario [1] would never come, the jig is up. At some point enthusiasts realize this and their online community shrink back to year 2015 or earlier levels ; cryptocurrencies value in state-issued fiat currencies also set back to the same levels.

Is Scenario [1] getting closer any moment? Depends on whom you ask. Except for enthusiasm among my peers, I don't see any actual evidence for this yet, and despite the consistent 10-year increase of value of cryptocurrencies, we may be heading into Scenario [2] still.

I don't invest in cryptocurrencies and have no use for them. I don't use any blockchain-based technology. It would remain that way indefinitely for me, if and only if scenario [2] is realized.

We can also measure the value of a technology using the shutdown test. If in 2021 we shut down electricity for everyone - the result is terrible. If we shut down all banks, we get societal turmoil. But if hypothetically we shut down Bitcoin and Ethereum, by average it would only be equivalent to a small stock market downturn to some people, and a loss of investment to various speculators.

One quality about the opinion I bring here is that it is regardless of whether I could have invested in cryptocurrencies and made millions. I think there is no prejudice, and it would not have affected it.

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