What's going to fail? Crypto fanatics? Cryptographically-secured trustless distributed systems? All of cryptography?
The computer and internet I think it was easier to see the practical value there (though not necessarily the final form both would take) but that may be 20/20 hindsight.
> In 1971, Ray Tomlinson, of BBN sent the first network e-mail (RFC 524, RFC 561).[59] By 1973, e-mail constituted 75 percent of ARPANET traffic.
> By 1973, the File Transfer Protocol (FTP) specification had been defined (RFC 354) and implemented, enabling file transfers over the ARPANET.
This is what ARPANET looked like in 1974, or 5 years after its establishment: https://upload.wikimedia.org/wikipedia/commons/0/00/Arpanet_...
Meanwhile Bitcoin is almost 10 years old and all we have is speculation, scams, a near-useless currency and many promises. What we don't have is a useful application that showcases what only cryptocurrencies can do.
We do, and it's been running basically since shortly after bitcoin's creation: buying drugs. If mainstream cryptocurrency interest goes back to zero (which seems totally possible), people will still be using bitcoin/monero to buy drugs online.
The "its still early days!" argument holds no water.
NCSA Mosaic was released in 1993[1], so I think "mid-90's" is convenient for people who can't easily grasp what the internet was prior to the web. The TCP spec was published in 1974 and became a standard in 1983[2].
Consider these milestones in the crypto space[3]...
> 2008 bitcoin whitepaper published
> 2009 first bitcoin transaction sent
> 2010 Mt Gox bitcoin exchange established
> 2011 BTC market cap exceeds $1 billion (indicates activity and liquidity)
> 2015 ethereum launched
> 2017 crypto market cap exceeds $100 billion
We're still seeing early protocols contending to become standards. The analogy isn't perfect, but Bitcoin and Ethereum seem more likely to be analogous to ARPANET than to TCP/IP. It will be a couple more years before blockchain interoperability platforms (like Cosmos[4]) are fully operational, and another year or two after that before we get a killer app that's as widely accepted as the first web browser.
Returning to your final point, the amount of utility already derived from Bitcoin and Ethereum is fairly impressive considering their young age.
[1] https://en.wikipedia.org/wiki/Mosaic_(web_browser) [2] https://en.wikipedia.org/wiki/Internet_protocol_suite [3] https://cryptotimeline.com/ [4] https://cosmos.network/
This is invalid reasoning. People said lots of things about lots of failed technologies too.
Digital scarcity is finally invented, but people feel like it will have no use-cases?
Automated finance bots (smart contracts) that work without keeping a server up has no use-cases?
All fiat currencies are deflated continuously, but you believe 100% of people will prefer this?
The ability to embed money into a digital good has no value?
How can it ever go to zero if there's someone out there who thinks it might be worth accumulating just for the remote chance that one of these ideas works out?
The idea of it going to "zero" seems irrational to me.
Totally untrue. Cryptocurrencies are artificially scarce, not actually scarce; this is most obvious when two chains hard-fork and the sum of their combined value exceeds the total value of the parent chain. You can't "fork" a scarce resource.
Even without a fork, the scarcity is still an illusion because the consensus protocol can be modified to create an infinite number of tokens if that is the prerogative of the developers or community.
> Automated finance bots (smart contracts) that work without keeping a server up has no use-cases
Of course an automated finance bot needs a server, it's just a distributed and computationally expensive one instead of a centralized one that costs pennies to operate (and I say this as someone who has written profitable trading bots)
> All fiat currencies are deflated continuously, but you believe 100% of people will prefer this
The reason people prefer fiat money is because fiat money can be used buy goods and services and cryptocurrencies generally cannot without jumping through a bunch of hoops that offer no clear benefits in return. The OpSec that goes into "being your own bank" is not worth the cost to the overwhelming majority of people.
> How can it ever go to zero
I do agree that it is unlikely to ever go to zero simply because the limited utility cryptocurrencies do provide (irreversible pseudonymous online payments) will always have a niche use case that will keep the price above zero.
A fork gets you nothing on the original chain, just like inventing "new dollars" gets you nothing except what the market decides "new dollars" are worth. Digital scarcity is still there. If I have an item on that blockchain, you can't take it from me by forking. The only way to "move" that asset would be to get my private key. Forks are an anomaly the market is still figuring out.
> Of course an automated finance bot needs a server, it's just a distributed and computationally expensive one instead of a centralized one that costs pennies to operate
This misses the point. If I want to make a trading bot, I have to find a host, initiate a business relationship with them, and keep it running and highly available. If I make an ethereum smart contract, I set and forget. If I want people to interact with my bot and know it's source code, I can do that on ethereum. Is there another way you can think of to do this and have the bot be transparent--in other words a guarantee that the source code you looked at is actually the source code you're interacting with?
> The OpSec that goes into "being your own bank" is not worth the cost to the overwhelming majority of people.
This is only true until people notice the deflation. The ability to convert electricity to money that doesn't automatically shrink (even if it is not ready-cash) is very valuable in places where it is shrinking quickly.
Confiscation of assets is obviously possible via forks as well, but the fact that someone can't take your money without your private key doesn't relate to scarcity.
As long as crypto is pegged to a fiat currency like USD then the scarcity effect is going to be destroyed by speculative valuations.
USD isn't going to stop being fiat because it's too useful for it to be fiat when doing market regulation.
USD might stop being standard currency, but I expect other countries are going to maintain fiat standards because being able to vary the nominal amount of money supply is a better policy tool than merely controlling gold, because it opens up another theater of war beyond maintaining hard power.
I have no idea if 100% of people will prefer it, certainly, some who hold immense amounts of a currency will not, but it was one of the smartest ideas mankind ever had, because it introduced the ability to control the money supply and made currency a very important tool in ensuring stability and made it an effective means of exchange.
Cryptocurrencies are not a means of exchange. They're basically a pile of gold that people imagine themselves sitting on and that increases in value without them doing anything. Which is good if you're one of the few people who have much of it, but it is absolutely detrimental to society at large, which is uninteresting to the libertarianism on steroids that underpins the crypto-craze.
This may or may not be the case, but regardless, individual decisions are usually made based on an individual's self-interest rather than the warm fuzzy feelings about helping society.
> Cryptocurrencies are not a means of exchange.
It is not necessarily true that that will remain the case. Either way, that doesn't matter if society coalesces around one of them as the "WorldWide Ledger" because individuals are incentivized to avoid inflation.
It is in the interest of someone who uses money as a means of exchange and not as a store of value (which is the overwhelming majority of individuals) to reject crypto-currencies in favour of fiat currency.
Your average citizen gains nothing from adopting a currency that is highly volatile, concentrated in the hands of a few, and awful at completing everyday transactions.
Maybe, but those problems are not necessarily permanent, and it can be valuable without targeting the "average citizen." As a counterpoint to your "gains nothing" view, many "average citizens" used bitcoin for transactions in the early days, only to find out that holding some of their currency in bitcoin made them rich, so they did gain something. Even if that is only a small possibility, the possibility is still there.
Confirming that it is preferable to "HODL" than spend this currency...and any gains were at the cost of new bagholders who in turn expected to sell their coins for an even higher price.
A currency is something people want as means of exchanging goods and services, an investment instrument isn't that.
And crypto has performed terribly as an investment instrument as well...can you imagine the chaos if the stock market swung 5-15% from one week to the next for months on end?
Lastly you're conveniently ignoring that stocks can pay dividends, and don't serve only as a speculative asset... Because publicly traded companies generally produce something useful and of tangible value to society, unlike cryptocurrency projects.
The Bretton Woods System ended under Nixon to prop up the military ambitions of this nation, bad move using debt to start pointless wars. Current monetary system structure is deeply flawed, until reform BTFD in BTC.
Note: If you don't feel like paying for the next war, it's a nice bonus in BTC's favor.
That said, inflation isn't always a good thing for some people. Neither is a centrally controlled money supply which also has its own winners and losers
The key point is that Ponzi schemes you are talking about are not an accidental byproduct, they're the entire point. There's no reason to reinvent electronic banking, we already have electronic fiat money that works very reliably.
Cryptocurrencies are digital gold and basing an economy on them would be like bringing the gold standard back. The problem being that every economist will tell you, for good reasons, that this is a terrible idea. Cryptocurrencies are not a technological innovation, they're a technological regression. They make things that we already can do more complicated and energy expensive which is the opposite of what technology is supposed to do.
What if someone just programs more programmable money?
Also why would anyone want to use a system where over 71% of all money is owned by a small group of anonymous oligarchs?
Presale ICO / Premine ( max cost $0.50 USD per ETH )
= 72,009,990 ETH
Total Supply today (Jul 19th 2018)
= 100,773,797 ETH
Source:
https://etherscan.io/stat/supply