Bitcoin’s Worst Case Scenario: Can a Bearish Market or Crypto Crash be Beneficial Long Term?
The recent price plunge in cryptocurrency value and the resulting drop in their trading volumes have had significant impact on the growth of the crypto sector. Worse still, it has affected investor confidence, resulting in many shying away from industry or adopting a wait and see approach at best.
However, such negative trend will not translate to mean that the great technology that spurs cryptocurrency will come to an abrupt end. Never! In fact, the irony of the new tech lies in the fact that the seeming collapse of crypto market price is literally a lubricant to smoothen the way for the resurgence of cryptocurrency.
History itself is replete with exciting and optimistic contradictions. Think about the fallout of the collapse of railroad stocks that occurred in the 19th century. That was a major issue at the time, but it still didn’t stop the industry from evolving and flourishing. What about the aftermath of the dotcom crash that shook the world in the early 2,000’s?
Of course, we also have records of technologies, businesses, and commerce that never saw the light of the day. By implication, there is no guarantee that the crypto crash portends either an immediate or futuristic rebirth. Nor is there any naysayer’s assurance that such will be the end of crypto technology.
But experts have predicted that the crash in the value of crypto price in the exchange market will change the face of the virtual currency and bring about a promising rebirth of the ecosystem. One major issue identified with cryptocurrency deals is the influx of redundant and unnecessary crypto projects, which are/were sadly spurred by ICOs (initial coin offerings).
This is not to throw out the significant growth ICO funding has brought to the world, growing it from nothing to a market that has now become the cynosure of global attention. Crypto value up till the moment of the crash did jump to a staggering market cap that was well over 800 billion US Dollars.
Hence, everyone is considering taking their own share of the crypto cake from the market capitalization. The urge to suck from this mouth-watering crypto peak value has led to a number of amazing crypto projects, innovations, exchanges, and blockchain startups.
Of course, we should also not rule out the incredible damage done by the plethora of frauds, bad transactions, and fraudulent projects that have also crept into the system.
So, what must the cryptocurrency drivers, evangelists, financiers and investors do to quickly salvage this plunging fame of crypto business and revive the market?
One excellent step experts have predicted to get cryptocurrency back on tract is to stop the ease with which people can create shady and scam projects.
As long as this get rich quick syndrome and mentality is eliminated, the number of useless projects will drop drastically. This will require all crypto managers and founders to focus on only viable, useful projects.
Another use for the blockchain should be used to verify the identity of individuals and corporate organizations. So, instead of using Social Security Numbers, unique IDs resident on the blockchain can be used. This way, fraud will be reduced and disreputable innovations can be easily traced and blocked.
There is also suggestion which requires that transactions are self- executed (as against the proxy form) without any charge on contracts. In the same vein, crypto tokens can be used to facilitate money transfers and cross-border transactions, thus completely eliminating unnecessary bank charges.
Again, instead of leaving significant funds in your bank account, the money could be used to fund certain projects, thus, making crypto a real-time investment that has concrete relevance in the world rather than the mere investment asset status it has retained over the years.
In that, each innovator will be compelled naturally to commit to the social purse rather than trying to ‘steal’ from it. Once each person trying to feast on the cap ICOs has been able to raise over the years, they will rather have something to contribute, and so could derive some benefits from it.
In addition to this, eyebrows are being raised about the need to conserve energy. Currently, there is widespread negative publicity regarding Bitcoin mining. The call to scrap Bitcoin mining technology is predicated on the fact that it consumes rather than conserves energy, and that has an adverse effect on the ecosystem.
Finally, there are new advancements that can help further the cause of blockchain adoption. For example, the idea brought forward by Daniel Gross, who, in his book, “Pop!: Why Bubbles Are Great for the Economy,” wrote on the importance of ‘bubbles’ technology in bringing about a lot of improvement in the digital world. It is believed that if all these suggestions are implemented, then, crypto investments will be the beginnings of a new revolutionary technology.