Steem is at it's lowest price since Feb 2017 and Ethereum faces turbulence

Things are not looking good for the price of Steem right now

Looking at the chart we can see that the Steem price in BTC is lower than it has been in well over a year. In fact this is one of the all time low prices.

0.00011877 BTC

Yes that is the current price of Steem. Steem was last in this price range at Feb 18 2017. Some additional news related to this is that crypto is being more aggressively banned in Asia. This banning of crypto in my opinion is the cause of the crypto bear market.

Vitalik recently made a statement which I do not agree with. He stated:

Says Days of ‘1,000-Times’ Gains in Crypto Are Over

“If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore.”

Why do I disagree with this quote? He implies that just hearing about something at least once is enough to decide whether to buy into something? A lot of us heard about Bitcoin in 2009-2010 but we didn't have the guts to get into it or couldn't figure out how to mine it or couldn't understand what we were seeing. It takes months or perhaps years for people to go from hearing about something, to researching it deeply, to becoming obsessed with it, to becoming a user/adopter.

I think his statement is very much like the "Crypto is dead" or "Bitcoin is dead" statements we see in every bear market. In addition it is also likely inaccurate if we are basing this merely on his limited perspective. There is poll data available which does show that awareness of crypto is rising. It is probably true that in the United States a lot of people heard about crypto. In addition certain demographics are probably looking to buy crypto at some point.

So here are some numbers for discussion:

• Around 28 million Americans (8%) have purchased Crypto. (YES ONLY 8%!)
• 24 million Americans plan to buy Crypto in the future. (YES! ALMOST 50% more Americans)

So based on these two statistics alone I do not know how Vitalik can make the statement that we are near the ceiling. We are at most half way toward 50 million Americans owning crypto. 50 million Americans is actually a lot of people and a lot of room for growth. If we think of crypto like we think of the personal computer then we are just now in the phase where it is about to go mainstream. The bubble of Dec 2017 in my opinion was not the final bubble nor the bubble where we will see mainstream growth.

Vitalik makes a valid point that it is not enough just to sell the Bitcoin use case (store of value). This use case is nice for people who are already rich who have earned life savings which they want to store. It is a good use case for people who seek to try to hide their wealth or secure their wealth from confiscation. It is a good use case for people who are in countries where their national currency is sh*t. But this is still a limited use case which is why Bitcoin price isn't actually going up right now.

In addition in order for Ethereum to be successful it has to offer real world utility. While Bitcoin can settle for being a store of value and isn't even yet good at that (look at the current price) we can say that Ethereum has the opportunity going forward to offer real utility. The truth is Ethereum currently cannot do this because it can't scale enough to allow for industrial scale applications. Even if Vitalik is right and the whole point is to get people using blockchain technology on a daily basis (mainstream adoption) it is still technically impossible. In fact there is a price to pay for that ability to scale which a lot of people for ideological reasons may choose not to pay.

It is true that Ethereum may be able to someday cure diseases and make people wealthy at the same time. It is true that Ethereum is a token I hold. In addition I'm not an ordinary holder but I actually want to see the platform evolve into something which saves people's lives, which makes life better for people, which makes life easier for people. I can think of many use cases where Ethereum could make my life better (as a digital nomad, as a means of facilitating telework or microwork, as a means of enabling people to live a more free lifestyle while being able to access their resources anywhere on earth). I also unfortunately see a lot of problems going forward for Ethereum which I'm not entirely sure Ethereum will be able to overcome.

Problems include for example the fact that Ethereum is still being mined and will likely continue being mined. This is a problem because mining itself is over paying for security and a wasteful process. Mining actually potentially causes damages depending on how you interpret the costs. So I would say moving to proof of stake must remain a priority. On the other hand EOS and Tezos already are proof of stake. How will Ethereum maintain loyalty of developers? Well I don't think they can because developers will simply port their smart contracts over once it becomes easier enough to do so.

What about the ICOs? ICOs in my opinion were the best use case for Ethereum. In particular it allowed anyone to raise money to pursue entrepreneurship or create jobs. In my opinion if done right this could be wonderful for the economy and provide a real use case. The problem is regulators don't yet understand the potential of smart contracts and once again the scammers tend to be early adopters of new technology. The scams end up getting a lot more attention than the legitimate projects unfortunately. That being said if there is a rule change by the SEC which can allow investors to waive SEC protection when participating in crowdsales, ICOs, etc, then in my opinion it would provide the regulatory clarity necessary for the market to grow.

What about the security token? This is the idea that actual companies can sell shares via the blockchain which may pay dividends or sell real estate etc. In my opinion this is the biggest possible use case for Ethereum in the near future. Once again the lack of regulatory clarity is delaying this. It's also the inability of Ethereum to scale which prevents stock market 2.0 from being created.