Technology rarely does what we hope or predict it will do. In a year of falling exchange rates and failed ICOs, Facebook’s co-option of blockchain technology might be the best news for the industry of 2018.
Bitcoin and Blockchain
Regulatory uncertainty is one of the major risks facing the blockchain industry as it matures. Ohio’s courting of the industry throughout 2018 may have value beyond a handful of overblown headlines.
F.A. Hayek’s proposed market for private monies resembles the market for cryptocurrencies that has emerged over the last decade.
What this is about is what is called provenance, which is the definitive establishment and documentation of who has owned what and where it has been. This is the foundation contribution of blockchain, to prove provenance better than any other technology in history.
Disruptive technologies are rarely superior to incumbents in every single product or service the latter provides. And incumbents are rarely passive enough not to adapt and adopt in response to technological change.
"While we sit around wondering why blockchain and other technologies aren’t turning the world upside down before our very eyes, it’s instructive to remember that epoch-defining inventions of the past that we now reduce to a sentence or two actually took ages to unfold." ~ Max Gulker
A number one fallacy in the history of economics is the labor theory of value. The idea here is that things and actions are made valuable by how much work we put into making them. Sounds intuitively right. It’s completely wrong. Things have value because you and I value them, regardless of labor inputs.
This isn’t a ponzi scheme, conspiratorial black box, or “animal spirits” run amok. This, my friends, in all its messy and occasionally terrifying glory, is a market.
A fixed money supply is not a good monetary rule. Efforts to move toward more elastic supplies should be welcomed.
Bitcoin and crypto in general are especially susceptible to shady operations. People assume two things about this sector: 1) it is too hard for normal people to understand, and 2) if you are not in, you are missing out. This is a perfect opportunity for the con man.