While the market terribly crashes, I want to share my thoughts about the current developments with the community by sharing my first post here.
• Hard forks like Segwit2x prove that cryptocurrencies are superior to the legacy financial markets and institutions
Although every software developer learns not to break downwards compatibility (aka hard fork), it sometime happens. This might happen to disruptive technology changes or innovations or due to lack of governance.
However being able to disruptively fork software for innovation is nothing that the current financial industry and institutions can provide at this scale.
Banks and insurances are dinosaurian doomed by their mainframe legacy software and regulation that prevents them from innovation
Even companies like Paypal have to consider many stakeholders and restrictions when they want to innovate with their backend software (Blockchain / system of records).
Therefore cryptocurrencies and their technologies are able to evolve permanently and exponentially compared to legacy financial software and institutions
If there is a better fork, coin or token, the resources move there with a few trades on an exchange. Imagine what effort it takes if banks want to replace their Cobol based mainframe software.
But, what has to be improved by the community:
Every coin, token has to consider disruptive innovation like hard forks by its governance.
This means there has to be software governance and a plan what will be done in cases like hard forks:
o Impact / Roll-Out
- Miners
- Wallets
- Exchanges
Having a look at the Electrum documentation for a hard fork, shows me that the current hard fork process is a far away from end-user / mass adaption and the current crash reflects this issue:
http://docs.electrum.org/en/latest/hardfork.html
Maybe some kind of continuous integration (https://en.wikipedia.org/wiki/Continuous_integration) process or governance for cryptocurrencies and blockchains and their dependencies has to be established?
Summary:
To prevent crashes as of this month, consider hard forks and disruptive innovation as a part of the cryptocurrencies evolution, but let this happen under governance and make this process transparent for end-users.
For these reasons, like in the very early software days, I think commercial coins and tokens and in advantage compared to community driven approaches.
Companies like Oracle, Microsoft or SAP sometimes are more rationale and provide a better “end-user-experiences” compared to some projects in the open-source space that are hijacked by dogmatic nerds.
•Cryptocurrencies are a bubble, currently the market cap is a Eifel-tower pattern
There is no historic example available about people trading a virtual commodity, basically software-code, on a legacy stock market.
But ask yourself and peers:
- Will you need a bank account and pay high fees for financial transactions if you hold a stable cryptocurrency in a wallet? Considering this, do you think 120bn is a bubble compared to the market cap of the largest banks worldwide?
https://www.statista.com/statistics/264905/top-10-banks-by-market-capitalization/ - Will companies need to issue stocks, collect funding from investment angels or banks if they are able to collect money by providing blockchain tokens w. smart contracts? Will you need investment banking or stock exchanges and their fees then? Do you think 120bn is a bubble if you add the market cap of the largest stock exchanges?
https://en.wikipedia.org/wiki/List_of_stock_exchanges
Or image the largest companies worldwide would issue blockchain tokens instead of stocks.
https://en.wikipedia.org/wiki/List_of_public_corporations_by_market_capitalization#2017
You still think 120bn is a bubble?
•Eifel-tower pattern
https://cointelegraph.com/news/the-brief-history-of-bubbles
There are some examples that cryptocurrencies did quite well after showing an Eifel tower pattern.
So, relax and go to coinmarketcap.com and imagine the current crash is the same like with XRP around 1st April and remember the experts at the Polo trollbox laughing at the new XRP bag holders.
https://coinmarketcap.com/currencies/ripple/
As well the DASH chart recovered after several Eifel tower patterns:
https://coinmarketcap.com/currencies/dash/
•My 2cents about trading
I think at 1st of August you are already far too late to enter the market again.
Monitor this mailing list and wait until the final Segwit2x Release Candidate (RC) is announced today. (Which time zone?):
https://lists.linuxfoundation.org/pipermail/bitcoin-segwit2x/2017-July/000139.html
Remember this planning:
https://github.com/segwit2x/segwit2x.github.io
On Thursday the miners will update their software, I assume they will be rationale by sticking to the majority in order not to lose or risk their investments in hardware and energy.
Therefore fast movers will already start to buy today after the RC mailing list announcement or latest on Thursday again.
Looking forward to read your feedback if this post helped to regain confidence