What Will Be Crypto's "Tipping Point"
I am always a skeptic. Some people take for granted that crypto just "is". It's here to stay and we have to live with it. But every asset, every company, has to live and die by its merits TOMORROW.
The other day the head of the Bank of England said Bitcoin has no intrinsic value. Buffett has said the same. Others, like Ray Dalio, head of the world's largest hedge fund, has turned around on crypto and thinks it's an important asset class.
I believe also that crypto is here to stay. But there are a lot of ways a guest can wear out their stay.
I heard so many people say, "The Internet is a fad!" all through the 90s and the early '00s and even though I was a true believer (much more than I am about crypto) it still made me have doubts, hearing this from so many people I respected.
Here's what I think we need for crypto to get past a tipping point. To the point where nobody is calling it a fad.
1. Crypto hits a billion users (like Internet in 2005)
I think it took a billion users before the Internet was fully accepted. It took the Internet 34 years and the Web 14 years. With Crypto I think it will come this year or next (13-14 years after it was developed).
2. Real world use cases for massively parallel decentralized computing ($RNDR is an example - uses spare computer space to render 3D graphics. Partnerships with Disney and Sony)
Reminds me of what SETI has been doing for years (The Search for Extraterrestrial intelligence). Basically, people lend their spare CPU time (like at night when they are sleeping) to SETI to help process the constant signals we get from all over space.
Well, crypto makes this trivial and there are real applications for it.
3. Tokenization and trading of everything creates more asset classes
For instance, if I want to create JamesHouseCoin and trade it on an exchange I should be able to. Maybe I can issue 1,000,000 coins and it represents 10% of the value of my house. People buy and sell the coin based on how they think my house would go up and down in value.
Everything will potentially be an investable asset once this happens.
4. Real world use cases for NFTs (ticketing, paywalls, etc)
Jpegs of digital apes is not enough. There are real world use cases for NFTs and I want to see them
5. Acknowledgement that "trustless" currencies are the next evolution of stores of value and currencies
By "trustless" it means, there's no one we need to trust. If I send you money, you'll get it.
In the current global payment system you have to trust the banks, the wiring system, even the Federal Reserve to not print too much money and devalue our currency.
6. 100,000 transactions per section on the ETH platform
Right now Ether can only handle...15 transactions per second. But supposedly with the development of Ethereum 2.0, which Vitalik Buterin thinks will be fully launched in August, it will be able to handle 100,000 transactions per second.
7. Massively greater ease of use (think web development in 1995 vs web development in 2005.
To be honest, it's hard to buy a portfolio of crypto. Different DeFi exchanges, safety issues, compliance issues, how many wallets do I need? etc.
8. Simple legal financial transactions (like trade finance or escrows) become blockchain-based
Everyone always says this is a great use for blockchain. Well, enough talk. Let's see it.
9. Major institutions are invested.
Speculators go in and out of the latest hot investments. This is what creates volatility. But when Fidelity and the sovereign wealth funds of wealthy countries are allowed to invest in crypto (and they will be), this is when Bitcoin could hit many multiples from here and the price will be much more stable (big investors don't sell in and out so easily).