RE: The Conundrums and Paradoxes Inherent in Cryptocurrencies: A Non-Expert Exploration
You've certainly hit on a few issues with cryptocurrency - especially in how can it be adapted as a real alternative to fiat.
One of my first problems with crypto is the sheer number of different tokens now available. As you stated, there's too many of them, which, I guess, is fine if they are to be used solely as investments - a different way of investing in the traditional stock market. I think this is more how I would see myself using them. I'm not sure if day traders would make much off them at the moment - and in my complete noviceness, I would speculate that as more cryptos enter the market, the prices of them would continue to stay low, or struggle to rise. I mean, look at some of the prices now - many are worth just a tiny fraction of a cent which doesn't make them very attractive as an investment.
What I can't understand is, why does it seem that every time someone creates 'something' using a blockchain infrastructure, do they feel the need to create a token to go with it? Is that a requirement of using blockchain technology? If not, use a blockchain for decentralisation, but just don't create a new crypto for the sake of it.
I agree with your observations in regard to the fluctuations in price also offering a problem to crypto being used as a replacement to fiat. From a customer perspective, how should shop owners alter their crypto price to reflect the change in value of the accepted token?
As an example, say a can of Coke was valued at 2 STEEM, and the price of STEEM is worth $1.50. That makes to can of Coke valued at $3 - maybe a little expensive, but not too much. When the value of STEEM increases, should the owner of the shop decrease the cost of the can of Coke to reflect the change? (Ethically, yes, but how much extra work of business owners would this be?) If STEEM rises to $10 and the owner doesn't change the store charge, my can of Coke may still only look like it costs 2 STEEM, but in reality, it's costing me $20 - I'm not going to buy it for that price, unless it's a 5 litre can. I think you get my idea here.
Great post - I thoroughly enjoyed reading it. You made some excellent points.