What is the ACTUAL use of crypto?

The Underlying Challenges of use of Crypto

Cryptocurrency faces tribulations beyond superficially evident factors; indeed, its decline in value is merely the tip of the iceberg. The crux of the issue transcends mere programming intricacies. The foundational technology functions as anticipated, yet the crux lies in the application of this technology. Presently, the cryptocurrency discourse pivots around practical applications—essentially, the tangible problems cryptocurrency can solve to generate genuine value.

The Bitcoin Dilemma: Beyond the White Paper

Let’s dissect this into three segments, commencing with Bitcoin. The seminal 2008 Bitcoin white paper centred on peer-to-peer monetary transactions. However, a decade and a half later, Bitcoin’s widespread adoption as a payment medium remains elusive. The masses continue to favor platforms like Venmo or Cash App for remittances among acquaintances, and online shopping predominantly involves credit or debit cards.

Bitcoin’s Volatility and Merchant Challenges

Furthermore, even if transaction costs diminish, Bitcoin’s volatility presents another formidable obstacle. Recounting a personal anecdote from 2014, when I operated an e-commerce website and accepted Bitcoin, illustrates this point. We benefited as the Bitcoin’s value surged—what initially equated to a hundred dollars in Bitcoin eventually appreciated to a thousand.

Bitcoin as an Inflation Hedge: A Faltering Theory

Despite Bitcoin’s meteoric value increase over the past decade, its utilization as a currency hasn’t seen proportional growth. What then fuels its value? For an extended period, Bitcoin was perceived as an inflation hedge and a digital gold equivalent. Yet, this hypothesis falters in the face of current inflation rates at 40-year highs.

Bitcoin: A Refuge from Authoritarianism

If Bitcoin proves ineffectual for seamless transactions and inflation protection, what utility does it hold? One viable application remains: safeguarding assets from authoritarian seizure. In nations where governmental asset confiscation is a looming threat, converting wealth into Bitcoin offers a viable escape strategy.

The Enigma of NFTs: Beyond Digital Art

Beyond Bitcoin, the broader crypto ecosystem encompasses NFTs (Non-Fungible Tokens), another heated topic. Dismissing NFTs as mere digital frivolities, like primate-themed images, overlooks their foundational technology. At their core, NFTs represent blockchain-based ownership records for digital assets.

NFTs in the Art World: A New Frontier

Despite the NFT market’s apparent overvaluation, this doesn’t render NFTs entirely worthless. Let’s consider digital art, a domain I personally appreciate. NFTs can effectively authenticate and signify ownership of unique digital creations. For instance, Libs Elliott’s quilt, generated through code and crafted into a tangible artwork, would gain additional value with an accompanying NFT certifying its uniqueness and provenance.

NFTs: Authenticity and Historical Value in Digital Art

Similarly, Anders Hoff’s generative artworks, which I’ve collected, could benefit from NFTs to authenticate the intricate code behind each piece. Nonetheless, the scarcity of exceptional digital artists limits the potential of NFTs in the art world. Historical significance plays a pivotal role in art valuation, and this necessitates time. The rarity of digital masterpieces that combine historical relevance and artistic innovation means that only a few NFTs may eventually emerge as truly valuable artifacts in the digital realm.

Cryptocurrency’s Speculative Surge and its Consequences

One cannot overlook the speculative frenzy that has engulfed the cryptocurrency and NFT markets. This speculation has led to inflated values, but it also masks the true potential and utility of these digital assets. The challenge lies in separating genuine innovation and utility from mere speculative interest, a task that becomes increasingly complex in the volatile world of cryptocurrency.

The Future of Cryptocurrency: Beyond Speculation

Despite these challenges, the future of cryptocurrency holds promise. The technology underpinning these digital assets, particularly blockchain, has the potential to revolutionize not just finance but various sectors by offering decentralized, secure, and transparent solutions. The key lies in developing and identifying use cases that extend beyond speculation and provide real-world value, be it in finance, art, or other fields.

Conclusion: A Balanced Perspective on Cryptocurrency

In conclusion, while the cryptocurrency market currently navigates through a period of volatility and speculation, its underlying technology harbors potential for significant impact across diverse domains. The journey of cryptocurrency, from a novel concept to a mainstream phenomenon, is fraught with challenges but also filled with opportunities for innovation and transformation. As the market matures, we may witness the emergence of cryptocurrency and blockchain applications that profoundly change how we interact with digital and financial ecosystems.

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