One of the things that I have always found interesting is the attention on Bitcoin, where unless it is hitting an all time high, there is very little mainstream news - unless it is in a hard dip. Being up 80% since the start of the year and no one bats an eyelid. However, another thing I find interesting is the government attention that crypto gets in general, where there is constant pressure looking to somehow punish it in order to bring it into line with centralized practices. And, while I am a crypto currency enthusiast for sure, I think it is good to think about how much energy is being put into the campaign, relative to its actual size.
For instance, the entire crypto market is sitting at a total cap of under 1.2 trillion dollars and after all the challenges through 2022, at the start of the year it had dipped to below 800 billion. Yes, that is a fair amount of money by any measure, but it needs to be put into relation in order to understand what it means. Apple for example, is valued at 2.5 trillion - that is a single company. But perhaps more importantly, the global national debt is around 100 trillion and the total global debt is around 300 trillion.
Looking at just the US debt for a moment,
Even if the US could get their hands on all of the crypto cap, it would still fall 400 billion short of getting the national debt below 30 trillion. Isn't that incredible? But then, they can't actually get their hands on all of that delicious digital value, because not only is it decentralized, but it is also spread globally.
What I mean by this is that there are millions of crypto owners spread around the world and spread across multiple tokens, and still the value is only 1.2 trillion. Yet, globally, the attention and pressure it is getting from the governments is immense, which is a good indicator that they are indeed threatened by the potential of crypto, even if not by the current state of the crypto industry.
But, why be threatened when it is a tiny, tiny drop in value in comparison to all that they have going on elsewhere? Well, in some way it is like the Coke-a-Cola company, where they will fill the marketplace with every conceivable product variation in order to not let anyone have a chance to get a foothold and perhaps threaten market share - Caffeine-free, diet Coke. That is just brown water. Yet, they didn't see Redbull coming and it left them scrambling for a little while, giving Redbull a chance to find a niche.
Crypto threatens market share of fiats currencies, which are ultimately owned by the state and with the US being a large part of the global reserve as well as the international trade currency, they have a lot to lose if they get usurped. And, not only this, it also threatens fiat culturally, where people have been conditioned to back a centralized currency, even if it is not in their best interest to do so. A decentralized currency is a direct threat to the way of life for many people, especially the wealthy.
The reason is that a lot of the markets that the wealthy use, are legislated so that only the wealthy have access to them and anyone else that tries, is going to be penalized more heavily through tax systems, so in order to make gains the same volume, they have to make more than the licensed traders, which also means that the licensed traders can get out with a profit ahead of the retail traders. And if the retail get out early, the volume isn't significant enough to make much of a dent.
However, this is changing too, as retail trading apps have opened up a more convenient gateway for average people to get involved, and once they get a taste of responsibility, consequence and gains, they will be more literate in finance in general and will start looking for alternatives that offer a better return. Crypto is a solid alternative. And, as crypto is developing the technology and mechanisms of trade available, as well as offering a very wide range of ROI potential, there is the risk that it will gain enough momentum to start widening the cracks in the already shattered fiat economy.
And, maybe this ROI range is something to touch upon too, because I don't think I have seen it mentioned before in comparison to traditional investments, but is part of the threat. When for example someone invests into barrels of oil, they get an ROI in dollars, not more barrels of oil. This provides liquidity usecase for fiat currencies, but also shows that the ROI is disconnected from the product itself. However, crypto offers a return potential in more crypto, which could be a direct product of a blockchain. - for instance, earning HIVE, through curation based on staked HIVE. Splinterlands also encourages investments through a return of more product, not necessarily the currency. This gives a potential for different kinds of trading configurations, which can create unforseen values based on future demand. While a lot of the emissions of this kind are shit tokens and useless, it doesn't mean they always will be and with more innovation and greater uptake, the demand could shift based on the changing perception of value.
And, this is a big threat, because the only thing that gives money any value, is the perception it has value. If the faith in a currency is lost, the currency is devalued to zero, because it is no longer tradeable, because no one wants it. For those who have got into crypto deeply enough, they will likely have already started shifting their own perceptions and beliefs about what is valuable and if this continues, there is a critical mass point that will mean there is no going back, and the centralized currencies fail, because people start trading their value elsewhere.
So, while the crypto industry might be small, it is a very large threat in terms of potential to centralized currencies and therefore the organizations that control them, because it puts control back in the hands of the people, encourages fiscal responsibility, decentralizes the value to make it harder to capture and most importantly perhaps, reminds people that they have power as a consumer and the conditioned usage of fiat currencies is a consumer behavior.
Centralization is all about gaining the power to control others and crypto undermines the power structures of the economy, which is the tool of choice. It is also the Achilles heel, as if it gets severed, the entire system collapses. Eventually, all of these cuts from every direction, will slice the correct point and bring it to its knees, and replace it entirely, without skipping a beat.
Taraz
[ Gen1: Hive ]
