Why We Will Have Millions Of Different Tokens/Coins. Yup... Millions.
An attempt at simplifying blockchain concepts, companies, and coins.
Each month we host a crypto poker meet up in NYC and BOS where we host a group of engineers, blockchain founders and investors - about a third of each. It keeps the conversation interesting, otherwise we find it's too lopsided, and you run the risk of the meet up being too technical or too centered around price movement.
One new-comer looking into building a decentralized transportation company on the IOTA network brought up an interesting question that has been swimming in my mind for weeks now:
"There are over 1000 altcoins now! I can barely keep up. How is it possible for us to have this many different coins?."
Like most of you, I instantly sided with him in the belief that many coins would surface in the beginning, but over time it would consolidate to a few winners.
However, recently, I was able to catch a talk with Andreas Antonopoulos and it completely changed my position. Now I believe we will have hundreds of thousand of coins/tokens, if not millions. We are going to get a little philosophical this morning, and then I'll close out with a practical reason for my opinion. Let me walk you through his position and why I support it (all quotes are his words).
He starts by talking about the old paradigm of currencies where depending on where you live, the currency of your country is forced upon you. There is no choice and, "it is an accident of birth. We are forced to use that currency in all of our interactions. Now, we live in a new world, a world in which currency is a choice." (AA)
He then moves on to discuss currency as an application (think Facebook, Twitter, email) and a means of expression.
In its simplest form, we use currency to express value to one another. When I give you X dollars, I am exchanging value with you, whether that is in the form of something physical or some service you can provide.
Andreas then goes on to give an example about how young children do not have currency, and don't understand currency. However, they invent their own currency. That could be in the form of toys, shiny objects, rocks which are traded or given to others as a "token of affection and/or popularity."
Ultimately, he compares this phenomena to "humans creating currency as a means of expressing their desires and of expressing their individuality."
At that point, he re-asks himself the question. "How many currencies will exist is the equivalent of asking how many bloggers there will be on the internet." Which he answers: "All of us."
I think right there is a pretty interesting perspective. This is not a zero-sum game. If you take a step back to medieval times, the information was controlled by the king and the church. (No choice.) You fast forward to the days before the internet and the information we received was controlled by the newspaper or book printing conglomerates. (Less choice). When the rise of the internet decentralized information you could now choose your source. All of a sudden, you could decide who and what to believe based on your interest alignments with different bloggers, vloggers, news outlets...
With the internet, it has never been easier for us to take sides with our information. IE Is Tomi Lahren a crazy right wing bat or does she preach the gospel? When was the last time you heard people arguing over whose currency was better and why? It's starting to happen. Just comb through crypto Reddits or telegrams.
I am sure you all know about the Bitcoin vs. Bcash debacle. Here is a perfect example. Take a look at this interview with Roger Ver (Founder of Bcash who believes it is the true Bitcoin). Interesting listen, but if you just want to see his meltdown, fast forward to 36 minutes in.
The same way that the internet decentralized information the blockchain will decentralize currency (one of the many use cases). We are witnessing the rise of the internet of money. The same way that every business/person has a website to express themselves, there beliefs, there vision, will apply to currency.
As a result, we will have millions and millions of different cryptocurrencies. "There will be thousands of altcoins created every day to organize local communities, to express fads, to create popularity contests, to codify the latest internet meme. We need to get used to a world where we have to judge currency not by who issued it, but by who uses it, how many people use it, and what they use it for." (AA)
Let that all sink in for a moment. It's coming. There will be a complete shift in the way you think about currency with the inevitable blockchain revolution...
Now for all of you looking for a more practical reason...
We use email, phone, Facebook, Twitter, and Instagram as different means of communication. No one here is ever worried that Facebook will wipe out email or Instagram will replace our use of phones. They are different mediums to convey ourselves and serve very specific purposes.
The same will be for cryptocurrencies. You may use Bitcoin to purchase a business (larger transactions). When executing a rental lease agreement, only after all documents have been completed will it be executed on Ethereum (smart contracts). When our streets are filled with autonomous cars paying for tolls, buying there own gas, they will use IOTA (micro transactions). When you want to do a security audit for your smart contract you'll use Quantstamp (older newsletter on QSP here). When you tip your bartender you'll use Dogecoin...You get the point.
The same way that we go to different news outlets, websites, and blogs for specific purposes will one day apply to currency. As scary as it sounds, there will be a Justin Bieber and a Kardashian coin. You bet your ass I am all in on those ICOs...
Happy friday everyone!
Some other really great questions that people have asked me during our crypto poker meet ups:
Why is Bitcoin not a bubble?
Why do you think bitcoin will reach $100k?
All great questions that I am preparing to answer in future newsletters. If you have questions you want addressed or want to join a future game, shoot me a line. Remember... no such thing as a dumb question.
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