Crypto Perspective 8: Is It A Currency?
While adoption isn’t widespread enough for them to be used in daily transactions like purchasing groceries, Cryptocurrencies are used by community members (not all of whom need to be diehard believers/evangelists) for transactions between themselves.
A good example of this is the recent massive interest in NFTs, where blockchain based collectibles are purchased and traded in Cryptocurrencies. Which, incidentally, also tells us all we need to know about whether Cryptos are currencies or not.
Firstly, Cryptocurrencies are obviously being used as a medium of exchange to buy and sell NFTs, which also demonstrates Crypto’s use as a unit of account, as the NFTs are priced in Crypto.
Secondly, and not so obviously, NFTs also demonstrate growing acceptance of Crypto as a store of value, since people are holding Crypto denominated assets as investments. Just like people hold USD denominated stocks/bonds as investments.
As such, while Crypto adoption still isn’t anywhere near what can be considered to be “widespread”, there are communities which do utilize them in ways that meet their specific needs.
However, this does not mean that adoption and use of Cryptocurrencies will one day become widespread enough to be thought of as mainstream.
But it also does not mean that they won’t.
No one knows what will happen in the future, and the same applies to digital assets, which is, at the end of the day, what the biggest draw of Crypto is.
Cryptocurrencies provide an avenue to participate in a future of exchange, wealth, and economy where the possibilities are up to communities to define.
Furthermore, individuals who care enough about it and join in the discussions today have the unique opportunity to be part of that process of creation and discovery, with all its attendant successes and failures.
How would this perspective fit into mainstream asset management categorizations? More importantly, can such a perspective fit into mainstream asset management categorizations?
Which begs the question, can Cryptocurrencies be viewed in a non-mainstream way? More specifically, can Crypto be viewed from a perspective that does not stem from mainstream asset management categorizations?
The simple answer is, of course! Anything can be viewed from a different perspective, we just have to be open to it. In the case of Cryptocurrencies, this entails that folks stop thinking about them using frameworks that they are already familiar with.
This would prevent them from falling into the cognitive trap of forcing everything into mental boxes of “something is either this or that”.
It is important to remember that change occurs on the margins and then works its way inwards, to the core. That’s how ideas, beliefs, and paradigms change.
It’s also how systems change. Like it or not, believe it or not, we just have to be open to the possibility of change brought about by something new.
Do You Want To Make Money Trading?
Learn how to, and more, in our Trading Courses.