Cryptocurrencies are a merge between finance, technology and the philosophy of individual liberty. For this reason it’s an industry that tends to attract users from each of these categories. Many crypto enthusiasts have varied interests yet sometimes perspectives clash and create a divide amongst different groups.
Personally, I see value in a balanced approach because it helps one understand the bigger picture. Here’s a closer look at each of these three elements:
Bitcoin was born out of the cypherpunk scene, a movement that uses cryptography to enhance individual freedom and privacy. Bitcoin and blockchain technology has evolved since those early days but we should always remember the core philosophy that makes this technology special.
There are many financial institutions that are interesting in the technology but would have you believe that it’s all about permissioned blockchains. The term “Bitcoin” can be a blasphemous word amongst the banking cartels and for good reason…
A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution…
Understandably, some banks may be a little threatened by an open-source, decentralized and transparent financial system operating in a free market. These values are the antithesis of traditional banking and have the ability to disrupt one of the oldest monopolies on the planet.
There’s nothing wrong with wanting to use blockchains as a private settlement layer between financial institutions, as long as they do it without trash talking Bitcoin. In a free society individuals should have choice and make their own decisions regarding centralized vs decentralized services.
Technology is neutral, it is fire which has the ability to sustain or destroy. If we use technology wisely it can improve the quality of our lives and provide us with greater liberty. Technology in the wrong hands can destroy the world.
Personal computers, the internet and blockchains are redefining old power structures by placing more control in the hands of the individual. These technologies are transforming our society through:
- Social media
- Autodidactic education
- Sharing economy (like Uber and AirBnb)
- Online entrepreneurship
Blockchains are taking everything one step further by decentralizing the underlying platforms. As the technology evolves, we may be able to restructure our current governance model of representatives into a direct participatory experience.
Since cryptocurrencies are a form of money, naturally many participants are looking to make a profit. The crypto industry needs investment capital in order to grow and thrive. It’s rare that investors will pour money into something without looking to make a return.
The industry is also rife with sharks who care little about the philosophy or technology and seek to scam people out of their money. They use the free market as an opportunity to hunt for new victims.
These markets are also prone to pump and dump schemes which tends to give traders a bad name. Trading is a zero sum game that can often be perceived as predatory by nature, yet it can still serve a valuable function.
Without traders the markets would be illiquid and the entire ecosystem could potentially collapse because miners, merchants, users and developers need to exchange value in order to participate. Many innovative crypto projects died as a result of having illiquid order books.