Many thoughts. None conclusive.
1. Prices for crypto-coins are entirely based on supply, demand, and speculation (expectation of future value).
2. They’re the ultimate “vapor-ware” - they exist only as a string of 1’s and 0’s, stored on an encrypted memory device.
3. They are backed by nothing, other than “I want to believe.”
4. Their continued use & growth is only as good as their utility and anonymity.
5. Their greatest utility is the private, near-instantaneous exchange of funds between parties without bank involvement or hard-currency. The fact that these transactions can happen globally is a big threat to banks, and their foreign-exchange operations and revenues.
6. They are hated by governments and central banks, as they’re not easily tracked, and they’re unable to control them. Frankly, they don’t like the competition.
7. When you peel back the onion, Sam Bankman-Fried scammed billions from un-witting investors because they believed his hype. His initial premise of facilitating crypto trading (acting as an intermediary for buyers and sellers of crypto via FTX Exchange) was sound - it is what CoinBase does today (among others). But he saw a gaping, glaring weakness in cryptos in general: he saw creating his own crypto-coin (FTT) as a way to literally print his own currency. So he sold FTT “tokens” to the rich, true-believe crowd; he then took those real currencies he received, and went on a years-long spending spree - buying everything from real-estate and exotic cards, to politicians. His won’t be the last token to have a spectacular death.
8. The greatest threat to cryptos is government, and government regulation. They simply will not tolerate alternate currencies and anonymity in the long run.
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1. Fiat government currency is in the same boat - it is no longer backed by silver/gold or anything else, and value is based on the exact same criteria.
2. The vast majority of government currency is likewise 1's and 0's, (only a small % now exists in physical form of paper/cotton sheets etc.) The difference is cryptocurrency is in immutable blockchains, whereas government currency is in bank ledgers that are centralized and mutable (corruptible), needing audits to keep the system even partially honest.
3. Government currency is likewise backed by nothing - no gold, no silver, no nothing. Explain to me what "government-backed" means if they won't commit to providing _anything_ for it in a pinch?
4. Cryptocurrency value is only as good as its utility and anonymity - the same goes for government currency. When a government currency loses its utility (Zimbabwean dollars for example), nothing magically props it up.
5. Yes, crypto cuts out middle-men, once you have used them to enter into the world of cryptocurrency. It's much harder to avoid middlemen and their costs in the government fiat world.
6. Governments hate crypto because they lose control - and people hate government fiat because of the control involved. Which will prove stronger in the end? That's more an open question than one I will try to answer.
7. People not involved with cryptocurrency get hung up on crimes with cryptocurrency because that is all they see and know from the headlines. It's like judging dollars based on news reports of bank robberies. If that's all you know, naturally your perception will be skewed.
8. I agree government edicts are the greatest threat to cryptocurrency. The same could be said of a lot of things. But if governments could ban them, they would have done so (or have already tried). The recent approval of Bitcoin ETFs is, in my opinion, an indicator that we are now past that stage of risk. Billions of $ are now invested in bitcoin on Wall Street in just the last few weeks, and that will only grow over time. Any attempt to ban cryptocurrency would raise strong protest not just from fringe dissidents but from the whole range of Wall Street giants that are now in the boat with cryptocurrency. They will not willingly let that boat sink.