The True Effect of FUD: Why Crypto Coins Fail
October 22 2018 - 1:01PM
InvestorsHub NewsWire
Bitcoin Global News (BGN)
October 22, 2018 -- ADVFN Crypto NewsWire -- The traditional money
system might be more similar to the Crypto system than most people
seem to think.
No matter how technical analysts try to get with their descriptions
of financial markets including the Crypto market, it all comes down
to the effect of trust. In a basic sense, what we can say with this
is that the more that people trust the asset, the more they will be
willing to withstand bear markets as well as any sort of major
economic shift.
If you have not heard this argument before, take a look at Michael
Casey’s article on Coindesk from today. In it, he argues the same
thing in connection with making a few other interesting conclusions
on what Crypto projects, more specifically, Stablecoin projects,
need to do to succeed.
Overall, what these points amount to is a sweeping argument ending
in the conclusion that the success of a Stablecoin primarily
relates to the success of its peg. Following this, he appears to
also conclude that the success of its peg depends directly on it
withstanding a stress test. If you do not know what we are
referring to here, take a quick look back at our first point on the
effect of trust on a financial market. Given that, we can
understand the term “stress test” as referring directly a difficult
time for a market or even a single asset, based on economic factors
including investor trust.
If we take Casey’s argument as a valid framework to help us
understand how to usher in a Blockchain future, then the central
question logically becomes: how can we increase and maintain
investor trust in Cryptocurrencies and the Blockchain?
Numerous arguments already exist on the subject but one thing
appears clear. Doing so will not be easy and will involve making
Cryptocurrencies valid means of payment for everyday items, so that
the average consumer truly becomes used to them.
In the end, to use a popular analogy, until Milk is priced in
Bitcoin, we have a long way to go.
By: BGN Editorial Staff
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