To assess the trajectory that cryptocurrencies may be on, it’s useful to look back at the arcs that new technologies and ways of thinking have taken in the past. A familiar pattern is that novel tech is regarded as eccentric and essentially pointless, while any potential utility is overlooked.
And, to be fair, new technologies often do, at the outset, appear outlandish, unreliable and even crank-like, attracting enthusiasts who think and talk in unfamiliar ways. Given consideration, though, none of this should come as a surprise.
The newest technologies are, by their nature, unfinished. They will come without professional packaging or money-back guarantees, as they are still in the process of being actualized and improved. Their ultimate purposes may or may not be clearly decided, since, as previously-unseen tools, there might be applications that simply haven’t been imagined yet.
And, as for attracting unconventional people, that too should be expected. In order to work on or adopt unproven products that have no mainstream presence, one must be the type of character who spends time looking beyond the center ground, and also, perhaps, the kind of person who would like to initiate change.
Put simply, the appearance of a tech which is initially, on the face of it, ambiguous baffling and talked up by advocates with unusual points of view, should set off not alarm bells, but wake-up calls, indicating that something important might be starting.
The Early Web and Computer Games
A relevant example of something that made little sense to many observers at the start, but subsequently altered the world, is web technology. Undoubtedly, at first, a nerdish enterprise, but don’t forget that it was also dismissed, sometimes, as being without significant utility.
That we would be able to shop online was acknowledged, but often with a so-what attitude, the prevailing view being that very few people would want or need to shop via a computer rather than in person.
When it came to what we now call social media, the idea of engaging online and at length, and sometimes with strangers, initially came across as deeply anti-social. The view was that socializing online was the preserve of people who were not inclined to interact with others in the real world, and chose to stare at screens instead.
And then, there is gaming, which has become a gargantuan entertainment industry, and about as mainstream an activity as you can find. Yet, go back a few decades, and while arcade gaming may have exuded some cultural cachet, home gaming, in the point-and-click, sometimes text-based era, was decidedly niche and lacking in sheen.
Are Cryptocurrencies Misunderstood?
Just as the web, social media and home gaming were all widely misunderstood at first, but have evolved into polished, profitable and transformative technologies, so we can perceive what may become similar patterns if we turn our attention to cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. Read this Term.
Bitcoin has at times been regarded as flaky, fraudulent and without real substance, and yet since its inception, adopters and advocates have maintained the exact opposite: that bitcoin is in fact immutable and consistent, was created with honest intent, and is the hardest asset in existence.
What’s more, the most committed bitcoiners often match precisely with the pioneer archetype, being unusually single-minded and resilient to criticism through possessing technical foresight that others have not yet become attuned to.
Non-fungible Trojan Horses?
Perhaps the area of crypto that is currently most widely misunderstood is NFTs. Bitcoin has been described as a Trojan Horse, smuggling in freedom and monetary revolution through the attraction of a rising price, but NFTs are also functioning as Trojan Horse technology, albeit in different ways.
NFTs pull in interest through a combination of cultural momentum, memes, and the potential, through their volatility
Volatility
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets. Read this Term and when market conditions are primed correctly, to generate tremendous profits.
It’s also the case that they are regarded by many as nothing more than cartoonish pictures that happen to have been linked up with blockchains, but not for any specific useful purpose. This leads to the right-click-save dismissal, which asserts that there is no point in buying an NFT when you can just download the image for free.
However, this view fails to take into account factors such as provenance and authenticity, which are hugely important in the art world. If we establish that NFTs are useful tokens of authenticity when trading digital art, we should also perceive that using NFTs for artistic provenance is akin to a proof-of-concept pilot application and indicates further utility yet to be unpacked and developed.
NFTs are data tokens that are unique and can be securely self-custodied and traded, with access locked and unlocked by the holder, and all in a decentralized manner (although they can certainly be linked to data that is not decentralized).
As such, NFTs can enable the movement of data and digital assets in novel ways. It’s curious that such significant tech should enter mainstream awareness on a burst of trading activity around pixelated punks and anthropomorphized apes, but to conclude that there is nothing more to come beyond expensive JPEGs would be inattentive.
Taking a broader historical context, such an assessment might be similar to having imagined that ecommerce would only ever serve a handful of computer enthusiasts, or that gaming was a passing fad when both were in fact moving in from the fringes.
To assess the trajectory that cryptocurrencies may be on, it’s useful to look back at the arcs that new technologies and ways of thinking have taken in the past. A familiar pattern is that novel tech is regarded as eccentric and essentially pointless, while any potential utility is overlooked.
And, to be fair, new technologies often do, at the outset, appear outlandish, unreliable and even crank-like, attracting enthusiasts who think and talk in unfamiliar ways. Given consideration, though, none of this should come as a surprise.
The newest technologies are, by their nature, unfinished. They will come without professional packaging or money-back guarantees, as they are still in the process of being actualized and improved. Their ultimate purposes may or may not be clearly decided, since, as previously-unseen tools, there might be applications that simply haven’t been imagined yet.
And, as for attracting unconventional people, that too should be expected. In order to work on or adopt unproven products that have no mainstream presence, one must be the type of character who spends time looking beyond the center ground, and also, perhaps, the kind of person who would like to initiate change.
Put simply, the appearance of a tech which is initially, on the face of it, ambiguous baffling and talked up by advocates with unusual points of view, should set off not alarm bells, but wake-up calls, indicating that something important might be starting.
The Early Web and Computer Games
A relevant example of something that made little sense to many observers at the start, but subsequently altered the world, is web technology. Undoubtedly, at first, a nerdish enterprise, but don’t forget that it was also dismissed, sometimes, as being without significant utility.
That we would be able to shop online was acknowledged, but often with a so-what attitude, the prevailing view being that very few people would want or need to shop via a computer rather than in person.
When it came to what we now call social media, the idea of engaging online and at length, and sometimes with strangers, initially came across as deeply anti-social. The view was that socializing online was the preserve of people who were not inclined to interact with others in the real world, and chose to stare at screens instead.
And then, there is gaming, which has become a gargantuan entertainment industry, and about as mainstream an activity as you can find. Yet, go back a few decades, and while arcade gaming may have exuded some cultural cachet, home gaming, in the point-and-click, sometimes text-based era, was decidedly niche and lacking in sheen.
Are Cryptocurrencies Misunderstood?
Just as the web, social media and home gaming were all widely misunderstood at first, but have evolved into polished, profitable and transformative technologies, so we can perceive what may become similar patterns if we turn our attention to cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. Read this Term.
Bitcoin has at times been regarded as flaky, fraudulent and without real substance, and yet since its inception, adopters and advocates have maintained the exact opposite: that bitcoin is in fact immutable and consistent, was created with honest intent, and is the hardest asset in existence.
What’s more, the most committed bitcoiners often match precisely with the pioneer archetype, being unusually single-minded and resilient to criticism through possessing technical foresight that others have not yet become attuned to.
Non-fungible Trojan Horses?
Perhaps the area of crypto that is currently most widely misunderstood is NFTs. Bitcoin has been described as a Trojan Horse, smuggling in freedom and monetary revolution through the attraction of a rising price, but NFTs are also functioning as Trojan Horse technology, albeit in different ways.
NFTs pull in interest through a combination of cultural momentum, memes, and the potential, through their volatility
Volatility
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets. Read this Term and when market conditions are primed correctly, to generate tremendous profits.
It’s also the case that they are regarded by many as nothing more than cartoonish pictures that happen to have been linked up with blockchains, but not for any specific useful purpose. This leads to the right-click-save dismissal, which asserts that there is no point in buying an NFT when you can just download the image for free.
However, this view fails to take into account factors such as provenance and authenticity, which are hugely important in the art world. If we establish that NFTs are useful tokens of authenticity when trading digital art, we should also perceive that using NFTs for artistic provenance is akin to a proof-of-concept pilot application and indicates further utility yet to be unpacked and developed.
NFTs are data tokens that are unique and can be securely self-custodied and traded, with access locked and unlocked by the holder, and all in a decentralized manner (although they can certainly be linked to data that is not decentralized).
As such, NFTs can enable the movement of data and digital assets in novel ways. It’s curious that such significant tech should enter mainstream awareness on a burst of trading activity around pixelated punks and anthropomorphized apes, but to conclude that there is nothing more to come beyond expensive JPEGs would be inattentive.
Taking a broader historical context, such an assessment might be similar to having imagined that ecommerce would only ever serve a handful of computer enthusiasts, or that gaming was a passing fad when both were in fact moving in from the fringes.
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