Of Bubbles and Blocks: the soft economy of cryptocurrency

tldr:Yes we are in a Bubble , but no Bitcoin won’t go to zero do your research pick the right investments and you will be fine

Nouriel Roubini said “Bitcoin is the mother of all bubbles” he is right on the right part of the statement but wrong about the term , “Cryptocurrency” is the actual bubble .

If you are old enough to live trough the “dot-com bubble” you probably noticed that not everything crashed and went to zero and Armageddon started ,some companies were out , some were busted but recovered , others went to establish new highs ,(Pets.com,Cisco,Amazon ) in order .

In the same way cryptocurrency is a bubble why ? you might ask and I’ll simply tell you “lack of creation,abundance of 💩” , It’s simple to reason about pick a random number of the top 100 cryptocurrencies by market cap you’ll see some went to down faster than they went up (TRX,XVG) others are going trough a healthy market cycle (Bitcoin,Ethereum) others are thriving (Ethereum Classic, ZCash) .

The same way the dot-com bubble bursted , the crypto-currency bubble will burst , first of all the same pattern of projects is repeating (IoT,Blockchain for X…) most have no actual products but state-of-the art landing pages and roadmaps , some are just scams and some are the behemoths of this new economic state .

At the end of the day each subfield where blockchain as a technology can be applied and actually used will have a dominant currency , EACH SUBFIELD starting from Smart Contracts to Anonymous CryptoCurrencies and the end of the day there will be only one . Because that’s how things were always the survival of the fittest and of course the most innovative and actually working product .There’s Google,Amazon,Netflix,Apple … this is how things function post-bubble , now in the midst of the chaos,panic et al , you see the abundant companies are already leaving the scene .

There’s a field in the intersection of economics & game-theory called “mechanism design” designing incentives, toward desired behavior, in strategic settings, . It has broad applications, from economics and politics (markets, auctions, voting procedures) to networked-systems (internet interdomain routing, sponsored search auctions, and of course crypto currencies ).

Bitcoin’s mechanism is to mine blocks for a reward , others use a staking mechanism to reward , others use master-nodes . If a project doesn’t have a strategic setting to incentivize users/peers to actually use it ,it will die , because at the end of the day human behavior is designed to seek incentives .

Let’s discuss another part of the bubble-phenomena ,

Lavish spending by dot-coms

The “growth over profits” mentality and the aura of “new economy” invincibility led some companies to engage in lavish internal spending, such as elaborate business facilities and luxury vacations for employees. Upon the launch of a new product or website, a company would organize an expensive event called a dot com party.

The first companies to go bust were the ones who reached peak growth over less time , same goes in the blockchain space remember the Bitcoin ICO 😏 , or the Ethereum ICO ? compare that to the current space , millions are raised with nothing insight besides linked-in profiles and good-looking landing pages (I’m jealous about their work it’s truly beautiful) .Then take a moment to compare the “code” because that’s what you pay for .

Research Advice

Researching good investment or good coins is all about one thing it’s all about common-sense and half-hour of Google . If something seems too good to be true , it’s because it is . If you test the software like this good man Andreas Brekken from shitcoin.com then you already know what to do , if you can sync the chain , send and receive transactions and it all seems running flawlessly that something worth your research time if it doesn’t drop it .

Ask yourself is someone really going to use it ? Can I atleast just test it ? it’s questions like this that pick your curiosity and make you want to actually look , because like in The Big Short all you have to do is look to see the despair and idiocy of the people , if the herd was so smart it wouldn’t get eaten each time .

Remember than when things are in bubble-mode it’s not just who makes the best profits who wins it’s actually who makes the profits and get to keep them .

P.S : About supporters , you’ll see lots of noise from people supporting projects like the IOTA Cult or XRP Cult but don’t trust them , like they were gurus recommending to go big on Pets.com they are know , your common sense is worth more than words of the herd .