Karl's Blog - 2019-12-31
Karl's Blog

date: 2019-12-31

tags: crypto currency value fall stellar keybase lumens fp

I believe that there are several reasons that the various crypto currencies will ultimately fail or decline in "value" until they are worthless.

  1. Money or any type of currency should only be used as a tool for doing work instead of the collection of it being a goal itself. The reason for this is that current money including crypto has no value other than what current markets say. I am not including actual physical objects such as precious metals in this statement.
  2. The majority of people obtain currencies with the intention of selling it in order to make a gain which when sold decreases the value.
  3. People are too slow to incorporate it into useful trades. If more people accepted crypto currency in exchange for objects of value this would gradually increase the value of the crypto currency. When people are willing to accept crypto the goods they offer are usually over priced or are non-essential goods like crafts, etc.
  4. The ability to exchange crypto for national fiat brings the value down because it encourages the purchase of crypto so that it can be sold when the relative value rises. If these exchanges did not exist then the currency would be used for for buying and selling items and services of value which over time would increase its usefullness and value.

These are my ideas with regards to crypto. I am not a big invester or holder of crypto however I have watched it for a long time (since bitcoin was valued at $35). Currently, I really like the idea of Stellar that is integrated into Keybase. However, when Keybase and Stellar offered free "airdrops" (giving away stellar lumens to keybase users) this brought out the people that wanted to try and cheat the system by creating fake keybase accounts.