Is Crypto Just a Flash in the Pan?Or, to put it more bluntly, will blockchain ever grow up to be a real financial system? Forbes says yes, cautiously
Or, to put it more bluntly, will blockchain and other non-government currencies ever grow up to be a real financial system? What about the weird Canadian crypto uproar in which the only a dead man knows the code to release the missing millions? Great film idea. But not for your personal bank account, right?
In a recent interview, finance mag publisher Steve Forbes. discussed the future of crypto with Jay Richards, author of The Human Advantage.
Forbes says yes, it has a future—cautiously—but it will take time.
Steve Forbes: The flaw of the cryptocurrency so far is the lack of stability. You take Bitcoin. One day you have steak, the next day dog food. You wouldn’t dare do a longterm contract. So, cryptocurrencies have performed short-term services of getting resources to places like Venezuela, Syria, and other things, but it hasn’t achieved stability. That eventually will happen, and when it does, the governments are going to be very, very upset because they’re not going to be able to play with the people’s money the way they have in the past. People will have an alternative
Investment writer and teacher Gary Smith thinks of bitcoin as a classic bubble investment: “I’ve been investing and teaching investing for decades, so my main interest in cryptocurrencies is in whether they are sound investments. I’m a value investor—I even wrote a book about that—and the short answer is no, cryptocurrencies are no more a sound investment than were tulip bulbs during the infamous Dutch tulip-bulb bubble (1637), which ruined investors who bought overpriced bulbs. As an investment, cryptocurrencies are nothing more than digital tulip bulbs.”
Jonathan Bartlett has thought a lot about the “trust” issue and crypto currencies. He writes, “Mining is a fundamental operation of cryptocurrencies and it requires an ever-increasing supply of computing power—both for the computers themselves and for the power they utilize. As manufacturing slows down due to the pandemic, miners can’t get equipment needed to keep the system going. At the same time, the payouts from mining is quickly dropping. In May, the reward for mining a bitcoin block will drop by half (known as “the havening”). This reward schedule is built into the algorithm itself, so it is difficult or impossible to change. Thus, not only are mining companies having trouble sourcing equipment, the payout for their efforts are also about to drop quickly.”
Crypto may turn out to be be a good idea that awaits the right historical moment and a technical fix.
Here’s the playlist to date of thinkers from COSM online.
Further reading: Cryptocurrency a “High-tech Cry for Help” says Steve Forbes of Forbes Media