[2023 Prediction #2] Crypto will be relegated to novelty.
-- reposting blog article from earlier this year in its new home --
I see a great lot of parallels between the craze and hype around Crypto to 3D Printing. Just almost exactly a decade ago in 2013, the buzz around 3D printing was similarly mesmerizing. The cost of printing 3D objects had come down by leaps & bounds. Barrier to entry was very low. The prediction was the every household is going to have a 3D printer just like dishwashers or inkjet printers. 3D printing was going to be the cornerstone of Industry 4.0 revolution. There were articles on Harvard Business Review (HBR), BCG, and all the major "think tanks". The market forecast were sky high, from less than $1 billion industry pre 2010 to north of $100 billion industry by 2017.. yada..yada..yada.. and right now in 2022, 3D printing surely has its niche, but the total market size is around $10B.
The think-tanks missed the predictions by 10X!!!
Crypto seems only like a bigger & shinier fiasco than 3D printing!
I actually jumped into trading Crypto, as many did during pandemic's "open season", and tried out NFT on OpenSea, games on Decenterland and few other major activities that you can do with Crypto. Even while being mildly active in this domain, I just couldn't connect the dots on many basic things, such as:
1) Is there any real use case of Crypto other than being a sophisticated "Loyalty Framework or Wallet Points"?
Foursquare and Yelp had this framework a long time ago and stackoverflow even to this day, has a pretty sophisticated "points system" to reward active users in their respectives ecosystems. This is similar to playing games in decenterland and winning crypto currencies as rewards. These crypto points can only be used in that ecosystem. Clearly I cannot go buy a burger with the crypto points in decenterland!! All the hundreds of *.coins - Litecoins, solana, papercoins and etc. can only be used, transacted in their individual ecosystems. Clearly, this is very very similar to cashback points on a credit card. How else is it different? at least with credit cards points, you can go buy a sandwich!!
2) Why make it geeky for the sake making it geeky??!!
Blockchain is excellent technology framework. Sure yes agreed. But do we really need it? Do we really need blockchain to do simple "loyalty wallets"?? is there no other alternative?? really?? Do we need to take an F16 to kill a mouse??!! do we need to the energy heavy, mathematically complex (superior!!) blockchain technology to solve for Loyalty Wallets??!!
3) What is up with "mining bitcoins" ?
What is the actual, need to mine for acquring a Bitcoin? why all the hassle when technology is essentially supposed to simplify? why spend gazillion CPU energy to solve complex blockchain problem to mine a bitcoin. Fundamentally, if bitcoin was so important, shouldn't there be a better, simple way for common man to acquire it?
4) What is up with - "only limited bitcoins" ?
What would happen all of a sudden a presumed founder of Bitcoin , Satoshi Nakamoto, wakes from dead and says - hey guys , look I have' got more bitcoin. Don't dig up just there.. but dig up (mine) here as well, there are more bitcoins here? where would the valuations be then?
5) Why is the alternative currency trading real world stock markets?
If bitcoin, crypto currency were truly an "alternative currency framework" , why the hell are they trading on stock markets backed by $$ ?? it is just bizzare!
In My Humble Opinion (IMHO), I think the entire hype around cryptocurrency was sort of "crony capitalism" where-in a bunch rich dudes , a.k.a Elon Musk and bunch of his buddies in Silicon Valley & Wall Street , had put in some money in roulette of Cryto and wanted to make the most bank for the buck and decided to hype it like crazy. The pandemic lockdowns helped a lot in creating this buzz as most were confined to our homes only left to visualize the grandeur of tech & money in our imagination as marketed by these tech honchos sitting in their Bahama villas.... "well played... well played" all the ponzis! Crypto just exponentially in the last 5 yrs without even a much of legitimate, tangible use case.
Clearly the ponzi scheme is withering out with the fall of array of Cryto currency startups, big and small.
As Bill Gates said, "crypto and NFTs are ’100% based on greater fool theory’ "
As Jamie Diamond Says, "Crypto is a decentralized Ponzi Scheme"
The pitch for Cryptocurreny has always been about creating a alternative currency for the internet which is technology powered. When some of the biggest tech brains of the century and best financial experts, come out swinging that its is a "Ponzi Scheme" - it probably is!!
I initially thought this was too harsh and perhaps there is some "soul" to the cryptocurrency industry. But after soo many dots not connecting, I agree that it is just a misplaced fallacy of "wanting" to build palaces on the air, with no real footing and no real, tangible need!!
I strongly believe that the entire cryptocurrency industry will be relegated to Novelty and will still be used in Video Games, but nothing more. Crypto industry as such will continue to languish & diminish in the next 3ys and beyond, but perhaps not entirely vanish.