Hello Steemit, lately I've been wondering how we could keep the cryptocurrencies market so viable as an alternative job for dedicated people but the current cryptocurrencies market state have some problems and I bring some possible solutions to those problems but why is such a revolutionary idea still so unknown, or even feared, by most people? Cryptocurrencies are still in their infancy, and we do not know where the road will lead when they are adults. A stable currency, first needs a stable ecosystem. Why do so few people use these kinds of coins? The speculators and the supporters of the monetary alternatives pointed to the Bitcoin, wanted to be the first and make it big, but the real users, those who buy and sell in daily life, have been left behind.
There are many reasons why this situation has occurred, however, one of the main barriers to the massive adoption of cryptocurrencies is their volatility. Why do prices change so much? It is usually due to supply and demand. Most cryptocurrencies have a fixed total offer and, however, the demand is uncertain and is constantly fluctuating due to speculation. Although, of course, it is easier to pose the problem than to find solutions.
Monetary stability is not a unique need for cryptocurrencies. Any currency needs stability to be used as a means of exchange. If prices go up and / or go down a lot, the general population will avoid using these currencies for their daily transactions. The fact that people are not used to considering cryptocurrencies as real money is evident when they accumulate them in the hope that prices will rise sharply or avoid using them for fear of losing value.
The unpredictability of prices has even worse consequences if we observe the ravages that this causes in regular monetary services such as remittances, currency conversion or the use of ATMs. Bitcoin ATMs can charge up to 15% simply by switching to a fiat currency.
This fact goes against the original purpose of cryptocurrencies, which in the beginning was to offer cheaper and more flexible alternatives to other forms of payment. If cryptocurrencies have no advantage over state money, why are ordinary people going to use it?
The volatility of Bitcoin has been a fact from the beginning. What have we learned in these ten years? Why cryptocurrencies have not solved the problem of price fluctuation?
Human nature is always the cause of all evils. It is difficult to stabilize prices in a world where people prefer immediate gratifications by reselling their money for the highest possible price. Without a detailed plan from the beginning, it is difficult to recover from the effects of speculation.
When we start a cryptocurrency from scratch, what is needed are solid pillars. With this, a coin can grow and self-correct as it grows.
The first piece of the puzzle is to be able to predict demand in a reliable way. Uncertainty about demand is the main cause of fluctuations in prices, since the behavior of users is unknown for the rest. Having thought of a way to incentivize demand is one of the best ways to solve this problem.
However, the challenge in predicting demand is the speculators who create "false demand". Because most transactions with cryptocurrencies are online, it is extremely easy to invest in them and, therefore, most of the money supply will fall into the hands of speculators. This is the main problem: with so much speculation, the price of cryptocurrencies does not reflect their real supply and demand.
It just becomes a bubble about to explode and nobody wants to risk their hard earned money.
Traditionally, the solution to the problem of stability was the creation of a Central Bank. The government could alter the money supply at will, and in this way, generate inflation. Cryptocurrencies are decentralized by definition, however - and this is part of their advantages - without a central bank they need a totally new approach when trying to reduce volatility. They need to be able to do this without compromising the freedom of the users and without causing inflation.
What if there is a currency that encourages people to cooperate? What if people felt a greater inclination for growth, instead of greed? An ideal model would be for a business network and cooperative services to coordinate among themselves as if they were a single unit. The currency would be modeled democratically by this cooperative. All the users would have incentives to help the network to grow as a whole, and the use of blockchaina would help to turn this process into "Fair".
Instead of rampant online speculation, final users would visit the local exchange offices to buy and sell the currency. The community as a whole would vote when to increase the price of the currency, which would revert to a democratic community and avoid price escalation.
Looking into each other's eyes can make an important difference. Face-to-face exchange in trusted locations means that the sale of currency can be limited in a simpler way, and that simple act can function as an accelerator of demand. People in the front line, seeing in person the real demand for the currency, can vote to increase prices. The existence of stable locations to exchange currency gives consistency and eliminates the guessing game about where to buy and sell currency.
The advantages are not merely economic. Cryptocurrencies do not have a good reputation for their tendency to attract bad people. Illegal or unethical businesses will tend to be voted out of cooperative networks with face-to-face exchanges, which could be a good way to achieve legitimacy. Obviously it can not be avoided that this type of business exists, but they would never be part of the cooperative.
This type of model can only work if there are many more local exchanges than online. This would mean that local exchanges would determine the price of the currency.
Starting marketing too early can be a disaster. Initial marketing can be very powerful, however, it must be handled with care. On the one hand, it is logical that the founders want to attract investments from the beginning. This would increase the price of the currency from the beginning and would help pay for the necessary infrastructure, as well as increase growth. On the other hand, historically, the investors in cryptocurrencies have been of very low quality, they are speculators that suppose a misfortune for the coins since they scare the consumers of the day to day.
Capital contributions are necessary to keep the currency stable in case of speculation, and getting those contributions can be a daunting task. Let's take Bitcoin as an example: with a market capitalization of 153 billion, it will take a huge amount of capital to get a stable floor.
Stable prices do not happen by accident. They are not a miracle of the market, but require carefully planned pillars. A stable currency, first needs a stable ecosystem.
The Bitcoin has been abandoned to speculators
Although it is very tempting for the market to inject capital to raise prices in the critical and initial periods, it is generally better to wait. Advertising is like opening the Pandora's Box and inviting the world to look. Some of those users will be interested in the currency, but others will be undesirable speculators like leeches. For a currency to be stable, it needs to be used by 99%, not by a handful of investors.
A coin needs to grow with people, not go over it. It is only necessary to take a look at Bitcoin and its inflated prices. Ordinary people can no longer undermine the currency or wait to use it in their daily transactions without high rates or without taking risks. The Bitcoin has been abandoned to speculators.
With a truly stable currency, you can get an exchange rate, remittances, withdrawals of cash in ATMs and other financial services with lower rates than in fiat systems. In other words, it can be used as money. This is what will really attract the general audience and what will encourage them to take the step and use a cryptocurrency.
