Paddy Zimbron
8 January 23:49.

Do the decentralization, transparency, and universal applicability of cryptocurrencies create intrinsic value for them?

1 answer

In a sense, I would say yes, decentralisation and transparency do create value for cryptocurrencies. But in a sense, they do not. I have an old-fashioned view of a currency, as in, a currency is something I can buy pizza with. Right now I can’t buy pizza with bitcoin, so it doesn’t have much value to me. But I do see it as a better way of doing a currency than we have been doing currency so far: rather than having these fiat currencies or these black boxes called “banks” deciding what the value of a currency should be, which is not very nice when you are trying to invest in something. You would want to know what other inputs and outputs there are in a system you are investing in. Blockchains make that simple; they make everything transparent. You know what’s happening; you know the volumes that are being traded, you know who is trading what, so from that point of view there is an inherent value in the sense that I think a cryptocurrency has the potential to be more reliable than the traditional closed source currency that we have today.

Whether one of these systems gets widespread enough such that you can go out and buy your coffee or pizza using it - that remains to be seen. I am going to make a prediction that this is going to be more of a legal and economic battle than a technical one. The question is whether governments would be fine with having a cryptocurrency competing with their fiat currency, or whether they will just try to outlaw it. That will be an interesting thing to watch in the coming years.