Cryptocurrency: Are We Seeing A Clearing Out Of The Excess?

in LeoFinance3 months ago

Cryptocurrency is viewed as a grand casino for people to get rich almost overnight. Everyone wants to repeat what happened to those HODLing Bitcoin from the early days. The stories of Bitcoin millionaires are all over the place. Of course, one lesson to take away from their path is the ability to hand in there. Bitcoiners are known for their resiliency, something that might not be a characteristic of the later entrants into cryptocurrency.


Of course, much of this could stem from the fact that most are looking at cryptocurrency simply as a financial tool that one can make money from. The early Bitcoin adopters believed in the technology behind it and what they thought it could do for humanity.

This made price the primary focus of people. When the like of CNBC finally talk about cryptocurrency, sans the FUD, it is always in the context of price and where "the market is going". This further reinforces this idea that cryptocurrency is nothing more than a financial instrument.

Now that we saw a major reversal in the market, perhaps we are seeing the clearing out of the excess. It could be that people are leaving simply because the wounds of the market are too deep.

Where Is The Utility

A number of years ago, the talking point around cryptocurrency by those who questioned it was "what problem does it solve". This was a legitimate inquiry which emphasized the main point: what does it do?

It does not appear we see this asked anymore. The answer simply is presumed to be that one can make money off cryptocurrency. It is the only thing that matters.

Here we see how misguided this thinking can be. It is also something reflected in how the market prices different projects. Those with hype, a name, and perhaps some charisma get a lot of the attention. We also see the crypto-media playing into this by writing about these same projects even though little is truly taking place on them.

Thus, when we look at the markets for validation on projects, we might be putting our faith in something completely amiss.

At the end of the day, utility is an important component. If projects do not have use cases beyond a token, then it will fail. We often make the comparison to the early days of the Internet. Imagine for a second if this medium was developed and nobody used it. What would the value of the companies or projects online been worth?

The answer is clear. Without utility, all would be basically worthless.

The Demise Of The Mania

Bull markets create a mania. It is a time when logic goes out the window and people do some incredibly foolish things. This happens in all markets, regardless of the asset classes. Ultimately, markets are simply driven by human psychology which is why we see similar behavior in all of them.

Once the FOMO kicks off, everything changes. Mania sets in and people throw their money at whatever "is hot". They fail to look at anything sensibly. Perhaps we could say the craze with DOGE coin is a prime example of that. It seems that token skyrocketed based upon FOMO by an overall group of inexperienced investors while being egged on by the likes of Elon Musk and Snoop Doggy Dogg. These people failed to ask what purpose does this serve?

We also saw similar behavior in the NFT market. While many believe NFTs are a huge deal, the behavior was quite entertaining. It also bordered on the line of completely insane.

People were scoffing up whatever they could. Every NFT they bought was based upon the idea that it would moon. After all, this artist produced 10 digital works in the last week, so why wouldn't he or she be the next big thing? The reality is that when mania is in operation, everyone better be careful.

That does not mean that we are not seeing advancements that could radically alter things such as ownership of digital assets. Personally, it looks like that is the direction we are headed. Simply because it is easy to create ownership of a digital asset does not mean that asset has value. This is the distinction that many missed.

With the collapse in general cryptocurrency prices, the air came out of the NFT market also. The mania died a quick death, something that was foreseen by many. Behavior like this does not last forward.

What Is The Next Step?

Now we are confronted with where the industry is going. Make no mistake, we know speculation is going to be a part of the equation. There will come a time when the prices start to move higher. The strong hands are already preparing for this. Of course, as they head higher, more will be drawn in until the mania returns.

What was underlying all of this is now being exposed. Once we remove the excess we see what truly was taking place: development. The entire time, through both the bear and bull, people were building. They were hacking away at their keyboard, coding projects they believe have a future. They are looking for answers to problems they see out there.

A prime example is what came out of Brave the last couple of days. The Brave browser is entering beta with a new feature; a built-in, private search engine.

The new platform has not only been built on top of a, “completely independent index”, but it also promises not to track users in any way, including their searches or clicks.

Projects like this reveal the potential that is being created. At some point, we are going to see those that provide utility getting the attention. With so much "wrong" with the Internet, that are plenty of things to upgrade. Here is where we see the opportunity.

Web 3.0 and the advancement towards the Metaverse is a major deal that is going to take time to unfold. Nevertheless, as the excess is stripped away, we can see where progress is being made.

While the present bull market might not be over, instead opting for a breather, we can see marked differences between today and 4 years ago. The progress that was made in terms of development and applications with use cases is much further down the road. There are projects like Brave that are truly entering the realm of the Big Boys like Google in an effort to provide a viable alternative. We will have to see what that browser can do in that arena. Nevertheless, it does epitomize what is taking place.

Thus, we just keep building and developing. The Internet was not created overnight and took years to become an instant success. It is likely that cryptocurrency and all that is involved with it will follow the same route. People didn't understand the need for much of the online activity in the early days either.

Sometimes we simply need to clear out the excess to see what is really taking place.

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This is an issue that has perplexed me for the longest time. I think it is due to the market still being naive and as you said, the predominant notion of crypto simply being a cash grab.

As time goes on, players in the market will move from gamblers to investors, and when that time comes, only actual products will attract the smart money. Until then, it will be the pump and dump assets heading the pack.

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All the while builders are building. They aren't gamblers or investors but developers and entrepreneurs. At the end of the day, they are the ones who make an industry go.

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I use Brave and I actually didn't know that about the search engine, so thanks, I'll check that out. I really hope some day they make it so I can just put any BAT I earn straight into Coinbase without having to deal with their wallet that I don't want. The longer I've been in this space, the more annoyed I am by coins that expect you to have a new special wallet just for them. Like every store wants you to have an app on your phone, or every TV show thinks they are worth subscribing to some crappy streaming service. No thank you!

I understand what you are saying. It is annoying and will deter people. They need to get their act together on that end if they want to have a lot more success.

I use Brave and I actually didn't know that about the search engine,

It is brand new. You might have to update the version of the browser to get the beta.

I am sure we will see some posts about it once people start playing with it. I for one will use it. Anything to get away from Google is a bonus.

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Does metamask work on brave?

Brave is chrome clone of the open source parts with some added privacy features.

I really need to start using Brave a bit more exclusively. I have it running on my machine pretty much every day, but I still use Chrome for the majority of my stuff. I have to agree with you when you talk about the mania. Many news stories about cryptos when they aren't talking about how someone got hacked or whatever focus solely on the price. It would be awesome to see a major news outlet focus on a blockchain because of the use case it has versus the token price.

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Yeah the FUD campaign is on full force. That doesnt help things.

Either way, it is up to us to keep the utility train going.

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Yes @taskmaster4450, there are many newbies out there who only see cryptocurrencies as casino games without understanding the true value of cryptocurrencies for the future and when the market is bearish they bark like dogs losing their bones, I'm really annoyed with that stupid human

It will shift when the utility grows and people start getting rewarded for doing things online.

That is why Brave is such a wonderful idea. It is good to see it expanding.

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Instant gratification via riches is what is making this market so bloody volatile. So many gamblers using leverage hoping for the 10x or 125 x and the exchanges are encouraging it which is making it worse. I honestly can't wait for the shittier coins with no purpose to disappear leaving you with the ones that have a use case only. I was going to do a post about the coins that have done well due to their use cases but then noticed I would have to include Doge as it has grown astronomically over the last year even though it has nothing, so canned the idea.

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I honestly can't wait for the shittier coins with no purpose to disappear leaving you with the ones that have a use case only.

I am not sure that will happen. As long as someone keeps then going, and it is traded on some type of market, they are there.

And those are the ones that get the attention for some reason. That is where the hype ends up.

No matter. We just keep building and expanding.

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This is why i love when the market corrects because i only invest in the good projects that i believe will address real issues like decentalizing ai.. The reality though is most projects are only working based on that casino like get rich idea.

This is not a crypto newbie issue. The people who been in crypto forever are some of the main people propping up these useless projects. They are as much part of the problem as the solution so they lose their money like everyone else on dumps because for some reason they lack common sense as well. Yes what's happening is people are going to wise up and not because they want to. It's just by default going to happen and then projects that address real life problems like what happens when automation takes 47% of jobs and displaces workers in 5 years and projects like are around to provide real approaches to real solutions and not pyramid like businesses only working because they themeselves operate on that very idea of making quick money but the projects themselves don't solve any real problems they don't even attract the users it needs to attract to create more stable markets.

So they do nothing really but overly risk our money for very little reward but hopium and fantasies of grandeur and we wonder why the projects fail and go to 300 rankings and 2000 rankings as such. Well this is why they fail because they are taking the easy route which is flash cash and pull on peoples heart strings and gamble and solve all their economic problems in a short period which never occurs.

Nobody in this space really plays to fundamentals if they did then there are a number of worthwhile projects that should be in teh top 10 because they are addressing catastrophic issues we need answers to in teh future. Like i mentioned and bitcoinmyk none of which are in the top 10.. none in which are being praised and used and they should be because they are amongst the only projects even addressing the issues.

The tokenomics of pumping up coins value for no reason is what the game is .. That's a game i promise you will end in tears and with you all with less value. Less money and less users. it's already happening. Why is it happening because you all suffer from a cognitive dissonance.

This is not a newbie issue. This is a cryptocurrency issue. Will it be corrected? Yes it will with many of you left destitute unfortunately. I believe its going to happen sooner than later. We in crypto promote this even the people who know better promote it. I believe the smartest minds in crypto have left. I think what remains is only a shadow of what the space was or could have been. I even question Vitalik Buterin i don't think he's as smart as i thought he was. So human beings are very adaptable creatures and that's why i know this will come to a halt and i won't be a voice forever crying out in the wilderness. There is no utility here nothing i see in crypto is a world we can't live without.

There is no urgency and that is because of how we use crypto people are smart enough to see how ridiculous we are. This going form a currency like in the case of bitcoin to a store of value is nothing more than a kick the can down the road manufacturing to continue to speculate to no end.

Currencies bring the world more economic prosperity than store of value. How many people actually use or trade gold? Do you think that brings the world more economic prosperity? Currencies have no more value at $1 than they have at $1 million. Yet they create economic prosperity when they move from hand to hand through velocity of money. At this point i'm not talking about government manipulation of currency. I'm talking about the differences between a speculative store of value to create never ending shellgames and what is "useful" to people.

Speculation and gambling does nothing for the world. All trading generally amounts to is two parties sitting up here all day trying to find ways to steal money from one another. Thats not lending over any value to the world. It's as much a waste of time as many of these projects you all create and waste money that does nothing for the world. Absolutely nothing but waste our time, energy and resources.

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I think a lot of people only understand cryptocurrencies as a currency that makes more money, without thinking about what cryptocurrencies really are.

steady gradual progress is what brings us success :)

It is not an overnight process.

The Internet took a while to get a few billion users too. So there is hope.

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I don't think I have seen a mainstream article about NFTs in a long while so I guess that bubble popped.

As for the brave search engine, I am not so sure since I didn't know about it before.

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Yeah the NFT mania has subsided. It appears the activity is way down.

It will reappear as things pick back up. That is what markets do.

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I think all us Hive Hodlers share the same sentiment - EVENTUALLY price should reflect utility.

Maybe in the grand scheme of things all these pure finance coins are just a blip, and a few in the T200 will last the distance.

Then we're left with VERY FEW utility coins besides Hive!

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EVENTUALLY price should reflect utility.

Eventually seems to take a long time to arrive. LOL

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I think at every point in time there will always be gamblers but they'll reduce when many have faced their losses and given up. The industry is developing faster than the investors. I'm certain early Bitcoin investors had no idea everything would develop to this extent in only about 12 years. It's catching everyone by storm.

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I realize that I still have a lot to know, and it is that everything is going very fast! We hardly have time to enter this world and achieve triumphs. The truth is that it is a market that already has owners and it is difficult to be successful if you do not have a "strong" economy. I live it daily in the system, I want to do more, but the "fat ones eat the little ones" live off them because there are many of us and they don't let us grow and reach them.
Good post. Commented by @hojaraskita

“ People didn't understand the need for much of the online activity in the early days either.”

Back in the early/mid 90s I recall watching tv with my mom and landing on MTV to see they had a chat room beneath the videos they were playing. It was the first time I had ever heard of the internet, which I think they were still referring to as the World Wide Web.

The conversation was dumb as hell, and my mom commented that she didn’t see what the big deal was. So idiots can talk to each other? Hmph.

I had to agree it was a poor example of what the internet would become, but even then I understood it was a big deal.

Fast forward to my discovery of BTC in 2013. I was introduced to Silk Road, rather than BTC, but I knew it was special, just like I knew the internet was special, even though in the moment everyone just acted like it was only ever gonna be a tool to buy contraband online.

Now, I’m trying to get people to take a look at Hive, and it’s the same thing again. I’m beginning to think they just don’t want to see beyond their illusions, lest they have to dare to dream and muster the courage to chase it, or concede to accepting they don’t deserve that which they aren’t willing to work for.

Now I understand why the world has dictators. It’s because people don’t want to accept responsibility for their own destiny. They want someone to take care of them and someone to blame when they feel they aren’t being handed enough of what they somehow think they deserve. I don’t think this will ever change. I’d almost bet whoever invented the wheel was probably murdered with it and that’s when the people who mocked him to death first started to realize he was onto something.

Bang, I did it again... I just rehived your post!
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I really agree, that NFT and Do-not-ask-what-it-is-good-for-just-buy mania really reminded me on the ICO craze of earlier days.

And yes these days I have some NFTs lying heavy on my portfolio :D

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