Chapter 8: CRYPTO HITS ROCK BOTTOM — BUT IS IT REALLY THAT BAD?
This year kicked off with some intense action. The stock markets suffered tremendous dips, and for the crypto currencies it has been a race towards the bottom. Personally, I see it as crucial cleansing bath. One that we haven’t yet dried up from — a massive hurricane might very well still lurk around the corner. So now it’s just about buckling up and holding on tight. The second wave will come — and it will fix it all.
Following his new book on digital strategy How To Become A Digital Marketing Hero, Rufus Lidman is now translating all his knowledge to the most revolutionary field in the world. A field in desperate need of a digital strategy. In a series of articles, we will get an upclose view of this new mind-blowing market, seen through the eyes of a digital strategist.
>> Chapter 1: The Revolutionary Technology That Will Change Your Life
>> Chapter 2: The Birth Of The Future
>> Chapter 3: A Real Revolution In Practice
>> Chapter 4: A Metamorphosis You Are Not Prepared For
>> Chapter 5: The Apocalypse Of The Establishment
>> Chapter 6: The Secret Recipe To Reach The Absolute Top
>> Chapter 7: The Simple Answer To The Global Problems
In our past chapters, we have not only gained insight in the background and the foundations of the blockchain. We have taken a peek at the world changing capacity it really has. And should have moving forward.
As well, we have seen what happens when you don’t just invest with your wallet, but also with your heart. Where we may salvage a game changing humanism, and arm ourselves with a new point of view. A view not about victimization, but about enabling.
We have also seen what thinking outside of the box and cutting out the middlemen would do in cold, hard numbers, for the benefit of the great amount of people.
But that’s enough about our goals. In the next two chapters, we’ll address the means of achieving it. First, we put the blockchain into its right context and discuss the pros and possible cons with the shaky processes that cryptocurrencies have gone through thus far during 2018.
A Rocky Market — The Panic Button Remains Close at Hand
For those of us who like a little action and excitement in our everyday lives, the start of 2018 certainly delivered. Not just in our own businesses, but also in the stock market trends.
During one black, or at least dark grey, Monday, the Dow Jones initially dropped 6 percent. The cause of the major drop was likely the anxiety over increased interest rates in the US. Nevertheless, every stock market in the world quivered with dips of between 5 and 10 percent during the coming week. And as always when the economy turns shaky, ”ordinary people” move all their investments to low-risk areas, so-called ”safe havens” (such as gold, which has been on a slow, but steady rise since December) and pocket all their high-risk investments.
“Experts insisted that the nearly 500 billion that had been erased in value since New Year’s Eve was only the beginning, and that we would see a ‘race to the bottom’.”
In line with that principle, we saw a strong crypto dip of 10 to 20 percent in every bitcoin and altcoin market. Casual investors dropped their high-risk investments, of which crypto remains considered as such. The fall was strong enough to even be noted by traditional mainstream media. And, in a state of shock, investors registered that crypto continued to fall. Experts insisted that the nearly 500 billion that had been erased in value since New Year’s Eve was only the beginning, and that we would see a ”race to the bottom”. Every cryptocurrency was expected to lose almost all of its value. For us martial artists, that was already a given: ”The higher they are, the harder they fall”.
The First Ruinous Wave
Does the above mentioned sound like a logical analysis of the situation? Perhaps. It is a classic economical interpretation of risk versus return. People with money will run to wherever they think they’ll get the best return on their investment, at the lowest risk.
Though, if you’re looking for a deeper understanding of what’s happening during this historical era, it may be better to instead opt for a sociological analysis. We’re talking about such a fundamental societal change, that the past months only represent the first ripples on the surface, preceding the massive hurricane we’re still anticipating.
I have always said that these insane profits in the cryptocurrency market most probably represent the first wave. They are the MySpace, the Netscape and the Altavista, who are not only hugely innovative, but considerably speculative.
”There may still be an ‘armageddon’ in between. In that case, what we have seen now are just the first tremors.”
Meanwhile, a second wave is underway, with focus on substance and results, rather than hype and aimless talk.
Though. There may still be an ”armageddon” in between. In that case, what we have seen now are just the first tremors.
Our job as digital entrepreneurs is to ensure we ride that second wave as well, ideally even leading the way, finding the next generation Alphabet, Amazon, Apple or Alibaba. Believe me, to be first in line and suffer the first-mover-disadvantage, is almost as torturous as coming in last. We are a few who’ve experienced both positions.
In some ways it’s even worse knowing that we had a potential that wasn’t realized. That sucks.
Fortune Seekers and Frauds Ruining Everything
These developments don’t come as a surprise for anyone who, with a bit more perspective, remembers the waning years of the 21st century. The dotcom bubble and its spectacular and legendary bursting. Speculative businesses that gambled away their entire investments, making us entrepreneurs, citizens and politicians lose half a decade worth of momentum in the process.
In a way though, it worked out for the better. This cleared out all the crazies and bluffers. The players who were only interested in speculative business, without putting their money where their mouth was and deliver.
So this time, it’s just a matter of holding on tight and ensuring that we stay clean throughout.
The Second Wave That Fixes It All
If we have a first wave that ruins everything, it becomes all the more important that we with all our might ensure that we have a second wave that fixes everything.
This is where my amazing Chief Technical Officer always says ”keep tabs on every trend, and see which one looks the most promising”. At the same time, it’s good to keep tabs on even the underlying currents of interest, what precedes the trends or even what triggers them in the first place.
This is the kind of data I work with day and (literally) night. Because there seems to be an enormous demand for a safe anchor to lean on for the second wave.
A second wave that includes blockchain technology for more cost-efficient transactions. A second wave using utility tokens and coins for service consumptions with continuously proven value, transferred within the framework of a closed but healthy ecosystem. A second wave with basic and substantial solutions, that may very well take over the world. Or even save it.
Digital Opportunities Will Make Us Human Again
We have processes such as Artificial Intelligence that are digitizing the human brain. On top of that we have an Augmented Reality system that increasingly digitizes our lives. Moving forward, the blockchain will open even more opportunities, being a force advancing things along the opposite end. A force that has the potential to make us human again. A force which, thanks to the decentralized flows of the technology, makes a real difference.
This is a force that can’t be compared to gold, for purposes of investment or speculation. This is a genuine P2P process, relating instead to the way people are brought up from the beginning. Before we got an overcrowded financial overhead. Before bureaucratic structures and hierarchies took charge of everything.
“The community became more important than your children. More important than your fellow man. More important than animals and nature.”
Our initial state, where ”organizations”, ”nations”, ”institutions” and ”societies” were summarily invented out of centralized structures and social contracts. They all eventually grew to such proportions that they appeared, not just to utilitarians, as being considerably more important than you as an average person.
The community became more important than your children. More important than your fellow man. More important than animals and nature.
More important than your relationship to others, who also serve as living mechanisms. Who each have their place in the ecosystem.
That’s what we’ve lost. That’s what blockchain can bring back.
The blockchain will simply make us more human.
A Current System on Life Support
So far so good, on the pressures of the new. But at the same time, we wouldn’t be complete without noting that there’s no one cheering about the existing systems either.
Comments from another star: “Our current system is on life support. The question is how long that will last. There will be an enormous shift in capital soon”.
I can only say: “Duh!!”
What’s happening around the world at the moment is pathetic. Nations that haven’t learned kindergarten level economics, fooling themselves into believing that insane foreign debts are comme il faut. That budget ceilings are made to breach, and that negative interest rates and burning hot money printing machines is a new “good” path on the quest for economic growth and prosperous societies.
Meanwhile the Trump-et in my first native country seems to be implementing his life support on speed, unfortunately my other home country Sweden isn’t doing much better.
This analysis gives us more a feeling of being stuck in a fox trap. Because whilst the old empire is cramping more and more frantically in its death-throes, the alternative we have seen this far, as mentioned, hasn’t been too successful. The blockchain is for real a revolution, but on the way opportunists have been given access. And you don’t have to look back as far as to the dutch tulips, to realise what is on the way. What we see now is the exact same process we observed precisely two decades ago. When will we learn?
This is one out of two times in my life that I have felt old. (The first time being after a bursting encounter with my 20 year old sparring partners, when I found myself having to suffer the injuries for twice as long 😊.) When people for real believe that “the interest rates can’t go up”, that “new rules apply within the economy”, or when BTC salesmen and crypto fanatics get stuck in the idea that “the only way is up”. It’s the exact same mechanism. Dreamers and charlatans looking for shortcuts, and destroying something purely magical.
So maybe a nice little cleansing bath isn’t so bad, after all.