During a time in which knowledge and recognition of cryptocurrencies such as Bitcoin is at an all-time high, the past several months have exposed numerous ICO frauds and pump-and-dump schemes which, along with the already volatile market, have shown that many cryptocurrencies are essentially as dead as disco. In an interview published in early July, Evgeny Chereshnev (founder of the tech firm Biolink Tech) stated “at least 90% of all cryptocurrencies that exist right now are doomed to fail, die, or will basically be rejected, because the people who are who are primarily interested in them are money makers.” Chereshnev is right, just as much as he is wrong by not elucidating the full picture of the current crypto market.
Cryptocurrencies were predicted most notably by Chicago School economist Milton Friedman, who predicted back in the 1990s that what “will soon be developed, is a reliable e-cash, a method whereby on the internet you can transfer funds from A to B, without A knowing B or B knowing A.” The first part of Friedman’s predictions were accomplished with the commercial release of PayPal in the early 2000s, yet PayPal still relied on mediating institutions such as banks and the PayPal servers, along with the fact that it only transferred legally recognized fiat currency and was devoid of any anonymity features because of all the entangling regulations.
Because of Bitcoin, the concept of an untraceable currency based solely upon the decentralized use of blockchain technology turned this peer-to-peer concept from idea into reality. Since Bitcoin’s launch in 2009, hundreds of soft and hard forks have spun off and offered different variations ranging from minor tinkering to massive changes to crypto consumers. Because of this, the free market that exists online has allowed some coins such as Dash, Ethereum, Dogecoin,and Bitcoin Cash to succeed, and others to die on arrival.
Because of this unfettered market, these coins live and die, fall and thrive, entirely based on whether consumers believe in their value. Back to Chereshnev’s initial statement, the liquidity behind most cryptocurrencies is provided by large investors in North America and Europe, but what cannot be ignored are the thousands of individuals in developing nations who need cryptocurrencies to survive day to day.
The future of cryptocurrencies, despite some setbacks and plunges, remains universally optimistic however. A piece by Nick Hubble published last March made that point perfectly, stating “cryptocurrencies represent the first reversal of this government theft [taxation and inflation] in hundreds of years. Suddenly, anyone can issue a currency. And the value of that currency will be determined by its merits, not fiat,” continuing further that “money is valued on its merits, that completely changes the currency game.”
Whether your coin of choice lives or dies, the one truth is that free market principles are improving the long term application and viability of cryptocurrencies right before our eyes.
