I read about many reasons why cryptocurriencies are a bubble and will fail and many more reasons why they will be a big success transforming the world into something better.
However, my I did not read much about my thoughts I had lately....
But first, I will share my view on the valuation of the cryptos:
while crypto currencies and protocolls itself cannot be overvalued because their value is purely based on demand and supply crypto assets can be valued. I would value them based on traditional valuation methodologies also applicable for companies. I would expect that in this sphere the bubble will be created first - although you have to keep in mind that the business models are truly global and hence growth rates will be much higher than known from traditional companies. They will be more comparable to growth rates of a facebook or google. This bubble might burst if ethereum loses its position, maybe to NEO, and the companies have problems converting their models to a new basis. But maybe there is a smooth transition. We will see...
But now I will tell you about my thoughts why cryptocurrencies will definitely stay for a long time: a blockchain (e.g. bitcoin) which stores all transaction forever at one place (in the meaning you can access the information at one place - the information is still spread over all servers in the world) is really nice for our governments. If they create a law according to that the fiat exchanges (the gateways into the crypto world) have to record the names AND the wallet addresses of every customers and disclose this to the government then there will be FULL transparency about the global cash flows. Furthermore, all countries might cooperate and share the links between the customers and the wallet addresses.
The next step would be regulations which would ban anonymous crypto currencies like Monero, PIVX and so on. Business models which would help to mix payments or cash flows would also be forbidden.
As a result the governments will gain full transparency about our payments and cash flows. Hard to hide anything.
Isn't this what our governments really want? Full transparency? Think about that. Why should they forbid crypto currencies? No more suitcases full of money which is untraceable. They might ban privacy coins but I bet that they will not forbid crypto currencies with full transparency. Just my two cents....
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