Blockchain Semantics Insights
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Contradictions about Bitcoin no one talks about, but shouldJan. 20, 2018, 8:06 a.m. GMT
Any discussion on Bitcoin and cryptocurrency is sure to attract multiple voices both online and IRL (“in real life”). It is a different matter altogether that Bitcoin exists a lot more online than IRL today. Yes, there are countries like Korea and Japan where you could probably conduct most of your daily life purchase in Bitcoin, but stories around people being able to buy ice-cream and bedsheets by paying in Bitcoin are for now exceptions, not the norm. What happens to Bitcoin price when the real-world application becomes a reality? This post, unfortunately, does not want to speculate on that. But we do want to have some fun discussing a few covert but inherent contradictions in how popular media discusses Bitcoin.
Role of the government
Most libertarian circles celebrate Bitcoin as the messiah that will free us from the clutches of governments and central authorities all around the world. People go back to that famous quote of Bill Gates where he said the world needs banking but not banks. Gottit. Agree Bitcoin in specific and Blockchain, in general, will be instrumental in spreading access to financial services and control all confines of the human population. And yet in the same breath, the role of the government and regulators is touted as the most important mover and shaker in cryptocurrency circles. If an important regulator decided to clamp down on Bitcoin, prices could come crashing down driving away investors and adopters in hordes. All in all, an instrument still so heavily reliant on governments to spread and penetrate is the one that will eventually emancipate us from governments?
Bitcoin will replace fiat currency
Remember why this asset class is called cryptocurrency?- probably because it is expected to become currency some day. Also, remember how the most mouth-watering predictions of Bitcoin price declare it will hit $1 million per Bitcoin. Unless the rise of these neck-craning orbitals is driven purely by speculative moves (which is unlikely), the world will have seen some real applications too. And if despite these applications, the construct to think about a Bitcoin’s ‘price’ or worth remains US Dollars, is it even currency in itself?
Launch of Bitcoin futures will bring price stability
The CME Group announced last month that it will be launching Bitcoin futures. The expected launch date is December 10th, 2017.
News of the launch has secured significant attention and has contributed to lots of opinions around how futures market, by essentially helping guarantee a future price, will bring some price stability to the wild ride that Bitcoin is. Now, several big-money investors like hedge funds that have so far been reticent about entering the Bitcoin market are expected to be somewhat happier investing in Bitcoin futures. So far so good. The problem with big money entering markets is that when it leaves a market, it remains the same- big money. And when on the base of negative sentiments big money departs, it is invariably followed by retail investors too- the price swings may then become all the more gut-wrenching than they currently are.
Bitcoin being claimed responsible for crimes
When Bitcoin-bashers claim that Bitcoin can be and is used to fund and sponsor crimes, they are not wrong. It probably is true at this point in time. Here is another question? What currency is an overwhelming majority of laundering or drugs trade conducted in the world today? Fiat currency. Both are true. And yet, this argument is never leveled against fiat currency to force a shut-down, is it?
Let us know if you can think of more such contradictions that Blockchain and cryptocurrency enthusiasts probably want to think about before rushing to a judgment.