In around mid December 2017, Bitcoin began a decline from CoinDesk Bitcoin Price Index's all-time high of $19,783.21. Such sharp price declines are not uncommon in Bitcoin's long history, but they usually provide naysayers and FUDsters with fodder about how Bitcoin could become worthless. Let's get this out of the way: Bitcoin could as well become worthless, though I deem this an unlikely event. I will get to why eventually. But some of those opinions about Bitcoin (which people usually generalize to cryptocurency) are somewhat informed (though I will argue not fully), usually by economists, who assert that cryptocurrencies do not fit the criteria for money, or opinions along that line. First, I doubt anyone is trying to replace money, in the conventional sense of the term. Money is issued by a central body, which should regulate it and ensure its value does not fluctuate in an unreasonable manner. To understand why the central tenet of cryptocurrencies is decentralization, perhaps we should get into a little history.
The problem of transferring value and resources between humans has always been there, ever since we decided to socially organize ourselves in large numbers, and more specifically because we have needs. This began with barter trade. With time it became clear that a standard idea of value was necessary, such that if I performed a certain service for you in exchange for a Banana for instance, I could be fairly confident that I could perform the same service for you in exchange of a Banana (or something I deemed equally valuable) at a later date. This is why money was introduced in our history. It started with commodities with value (perceived or otherwise) like cowry shells and (precious) metals like Silver and Gold. If you store your wealth in Silver, a problem may arise if you need to move with it, because Silver is bulky. That's why promissory notes were invented. I will not get into the details of how currency was invented, that's a historical question that may not interest us, but I'm fairly positive it does not take a great leap of imagination.
I will not get into the role of government or banks in all this, it's a philosophical question, but some people felt the need to keep their transactions as secure and as private (or secret) as possible, and that's where cryptography came in. For interesting insights into this subject, I consider the Cyphernomicon by Tim May rather powerful.
The Cyphernomicon was written in the '90s, but the idea of digital cash has been around for a long time as has been stated by Vitalik Buterin in his whitepaper to Ethereum. The blockchain invented by Satoshi Nakamoto in his whitepaper to Bitcoin. But the blockchain has many other possible uses, besides being a currency which other people in the cryptocurrency industry are exploiting. For example, Ethereum is a Turing-complete platform where people can build token systems and apps and smart contracts. Other ambitious cryptocurrency platforms have been invented. Good examples that do not use the blockchain but a directed acrylic graph (DAG) like Iota and ByteBall are in development. Golem, a platform in which users can rent or rent out computational space (for activities that require high computational resources like rendering, for instance) is in development. Blocksquare, a concept pretty much like Ethereum (but for real estate) is also being developed, and the ICO is almost being offered to the public. One can also create decentralized autonomous organizations (DAO) like SwiftDemand which is an innovative approach to universal basic income (UBI).
Just like the value of money is in people's imagination (it's an inter-subjective reality), the value of cryptocurrencies lies in the cryptocurrency community. A unit of cryptocurrency will be worth what that community deems it to be. There is always an explanation to Bitcoin and cryptocurrencies dips, the most common cause being hacking of Exchanges, so a lot of work needs to be done to make cryptocurrencies secure, and this is why people are developing solutions and alternatives to cryptocurrency besides the existing ones which have certain problems. And as Karl Popper said, all life is problem solving.
There is a lot of potential in cryptocurrency, and this industry is in its infant stages. When it comes to cryptocurrency, do not listen to FUDsters (oh, google that, don't be lazy) but do actual research. Read the whitepapers. Or if you do not have the technical background, you can follow the content of people like me 😀.
The author is a Statistician by formal training ,researcher, philosopher of science (Epistemology), data scientist and online marketer besides other things. He defies categorization.
