The traditional money system might be more similar to the Crypto system than most people seem to think.
No matter how technical analysts try to get with their descriptions of financial markets including the Crypto market, it all comes down to the effect of trust. In a basic sense, what we can say with this is that the more that people trust the asset, the more they will be willing to withstand bear markets as well as any sort of major economic shift.
If you have not heard this argument before, take a look at Michael Casey’s article on Coindesk from today. In it, he argues the same thing in connection with making a few other interesting conclusions on what Crypto projects, more specifically, Stablecoin projects, need to do to succeed.
Overall, what these points amount to is a sweeping argument ending in the conclusion that the success of a Stablecoin primarily relates to the success of its peg. Following this, he appears to also conclude that the success of its peg depends directly on it withstanding a stress test. If you do not know what we are referring to here, take a quick look back at our first point on the effect of trust on a financial market. Given that, we can understand the term “stress test” as referring directly a difficult time for a market or even a single asset, based on economic factors including investor trust.
If we take Casey’s argument as a valid framework to help us understand how to usher in a Blockchain future, then the central question logically becomes: how can we increase and maintain investor trust in Cryptocurrencies and the Blockchain?
Numerous arguments already exist on the subject but one thing appears clear. Doing so will not be easy and will involve making Cryptocurrencies valid means of payment for everyday items, so that the average consumer truly becomes used to them.
In the end, to use a popular analogy, until Milk is priced in Bitcoin, we have a long way to go.
By: BGN Editorial Staff