Can the Cryptoverse Survive?
If one wants to trade in certain items that are not necessarily legal or endorsed by various governments around the world, one could easily argue that cryptocurrencies are the sure way to pay for such items, the currency's complete anonymity and lack of traceability ensuring that there are no ‘digital fingerprints’ between the buyer and seller.
The supporters of freedom of expression/choice uphold that the largely opioid-driven deals that took place in the darkness of the infamous Silk Road are just that: one’s freedom to choose what they smoke, inhale or inject.
Logically, cryptocurrencies can be – and are used – for illegal purposes; but so are dollar bills, Euros, offshore banks and similar. To blame a medium, or a means, for the illegality or inappropriateness of something that has a buyer/user at one end and a seller/provider at the other is not necessarily fair.
Evident in this regard is the prosecution of several federal agents who attempted to steal over $800,000 worth of Bitcoin from the Silk Road proceeds. The moment the agents tried to ‘unload’ them, they were caught because every transaction, just like every bitcoin, is unique and recorded in the blockchain for eternity.
There is no limit, for instance, to the number of copies one could make of e-books, songs, videos and, put simply, there is an infinite number of digital copies one could make of anything but bitcoin. For the first time ever in the world of investment, banking, financial transactions and not only, a web of thousands of computers across the world allows for a virtual coin to have an unique fungible aspect whose main feature is the paradox of its current existence, too: its scarcity.
According to Investopedia, there are over 18,000 cryptocurrencies in existence as of March 2022 and, although many of these cryptocoins have little to no following or trading volume, some enjoy immense popularity among dedicated communities of backers and investors.
Cryptocurrencies see a fall in their mining block reward in four-year cycles, and their popularity – which translates in their mining – is directly driven by a simple principle of supply and demand. Bitcoin’s protocol will stop when 21 million bitcoins are reached, unlike the hard cash which continues to be minted as banknotes and coins come out of circulation or new hard currency injections are directed by national banks.
Supporters of the cryptoverse revolution are very vocal in terms of the benefits that digital currencies can offer to those individuals whose national currency means, more often than not, nothing. Devaluation of a nation state’s currency – such as, most recently, the Russian ruble – means that the trading of that currency on the foreign markets is less attractive thus less powerful in relation to the US dollar or the UK pound.
Democracies have clear, open, and transparent rules when it comes to cryptocurrencies: their use, their trading, and their translation into conventional currency. But the democracies of today’s world make up for less 15% of the world’s population. For instance, the poverty-stricken population of Venezuela (a country whose oil reserves are the largest in the world, surpassing those of Saudi Arabia), cryptocurrencies are slowly becoming an accepted way of life and living.
JP Morgan Chase is one of the largest banks in the world, its transactions amounting to USD 16 trillion daily. Its CEO, Jamie Dimond, recently argued that bitcoin is worthless and that cryptocurrencies will end up being regulated by governments. One may understand that the advent of the cryptoverse poses a significant challenge to the traditional banking models and to the way business transaction proceeds have been – and for the greatest part still are – being carried out today. But, to ‘close’ or even regulate bitcoin or the multitude of cryptocurrencies out there would simply be impossible. As long as there is a World Wide Web, free for many and accessible to many, digital currencies will continue to exist, be traded and be used, even though some politicians naively believe that they can stop open source software.
Innovation and technological revolution are here not only to stay but to evolve. Only a catastrophe of global proportion such as a nuclear winter or an outright global conflagration could, potentially, permanently, or temporarily disrupt the cryptoverse revolution. As with almost any and all digital technologies, it is the user of that technology that renders its use for good or for bad purposes.