The need for greed
Opinion piece by Jonathan Galea, President of Bitmalta
As we near the year’s end, it is perhaps time to look back and sum up what has happened in this incredibly exciting year. It is safe to say that 2017 has been the year in which the public in general is finally aware about Bitcoin and other main cryptocurrencies, 9 years after Satoshi Nakamoto released Bitcoin’s white paper. It has been the year in which we’ve seen a meteoric rise in the price of cryptocurrencies in general, and the year in which the total market capitulation of cryptocurrencies has surpassed the $600 billion mark at one point. And that is the problem.
Before I continue, I must pull out a few pebbles out of my shoes, for the sake of transparency and the laying aside of any hypocrisy from my end. When I got into cryptocurrencies back in 2013, I was mainly lured through the prospect of making money and becoming rich overnight. I didn’t buy Bitcoin, as I deemed it to be priced too high back then at around $80. Instead, I bought Ripple. And no, before you get all excited and ask me to invite you on my non-existent yacht – I sold it all, long ago, back when it was still worth nothing. Do I rue that decision? Not one single bit.
As I started delving deeper into cryptocurrencies, I realized that this is not about making money. The blockchain technology, and other DLT-based platforms, are about saving money. They are about efficiency, connections, and establishing decentralized trust. For years, we have made use of a decentralized protocol, aka the Internet. However, although that same technology has connected us together, it has never truly linked us. Reliance on intermediaries has remained there and strengthened due to the lack of trust itself. As a friend of mine told me once, blockchain is the technology of trust. It enables us to transact, in more ways than monetary ones, directly with each other. However, I am not here to talk about the uses and benefits of the blockchain. Because the uses, so far, have been close to zero.
Why am I, one of the earliest backers of blockchain technology in Malta, suddenly seemingly speaking against it?
The truth is, I am not. I still fully believe in it. I still think it will enable humanity to transcend into the next generation. However, what we have seen this year is not mass adoption, but mass speculation. They are not one and the same thing. In fact, I would go as far as to say that they are diametrically opposite concepts. With mass adoption, you cannot have mass speculation, because adoption in itself serves as an anchor for the monetary value of a thing. With mass speculation, you cannot have mass adoption, because people’s greed will instill the fear of parting with the underlying object. Mass speculation may precede mass adoption, as happened in the dot-com bubble. History tends to repeat itself.
We have arrived to a point where the man on the street will confidently approach you and advise you to buy Ripple, because Ripple only costs 2 EUR and Bitcoin costs over 10,000 EUR, so it is only logical that Ripple will reach 10,000 EUR because it is better than Bitcoin. Leaving aside the economic and fundamental bullshit backing such statements, it is laughable to think that the very concept born out of desperation to thwart the banks’ greed back in 2008, has come round full circle and we are now facing the decentralization of greed. People only care about lining their pockets with wealth, and seemingly do not care about the underlying concept or use. John McAfee, in his greed, has caused several destructive pumps and dumps in exchange for payment, and his sheep were only too happy to oblige to his whims, not caring that such schemes may serve to destroy the underlying project due to the wild volatility in price.
Despite all this enthusiasm, education is still at a worryingly low level.
Blockchain technology still hasn’t been adopted in a mainstream manner by any large company or institution. While a grocer will enthusiastically tell you that he bought Ether when it was $300, he will frown if you ask him whether he has considered switching his sale system to a smart-contracts based one. Whereas people will tell you that Cardano is the best blockchain system around, they will shrug if you ask them about the Waves platform, one of the most widely adopted platforms so far after Ethereum. Greed has blinded us all, and greed may very well be the biggest enemy.
Not the banks.
Not the governments.
Not the regulators.
Echoing Vitalik Buterin:
Have we really earned a market cap of over half a trillion? Or are we staring down the barrel of a loaded cannon?