This year has been filled with negatives for cryptocurrencies, or at
least cryptocurrency investors. Trading at insane prices towards the
tail end of 2017, crypto values have fallen closer to earth, with a large
majority shedding as much as 80 percent of their value. This has led to
quite a bit crisis talk, with some commentators prophesying an
imminent crypto crash. Economist Tyler Cowen, though, isn’t
sounding the alarm — yet.
In an op-ed published in Bloomberg , Cowen, a professor at George
Mason University, wrote that a crypto price crash could be beneficial
to the market, as it could set the market up for something big in the
future. He made references to the 19th-century bubble which saw the
collapse of railroad stocks and the dotcom crash of 2000. In all these
events, Cowen argued, there were some negatives with plenty of
positives.
“Internet stocks plunged in the dot-com crash of 2000-2002, but that
in turn cleaned out the bad companies and paved the way for the
subsequent tech revolution, including the rise of Amazon and
Google,” Cowen explained.
As the world has come to realize, where cryptocurrencies are
concerned, past events cannot determine future circumstances, but one
idea Cowen holds dear is that a price collapse does not necessarily
mean the “end of a technology or its relevance.”
For Cowen, cryptocurrencies saw a growth rate in value to almost $800
billion from zero, which made the market attractive to investors of all
types. The ease of entry into the market also didn’t help matters, as
an influx of “junky ideas were tossed around and then often funded
by ICOs (initial coin offerings),” the economics professor noted.
While cryptocurrencies have a lot of use cases, including trans border
payments and the creation of dApps, some neutrals still see it for its
drawbacks — of which money laundering and drug trade stand at the
top. Cowen, however, believes the slump in prices has led to more
discussions on how to make cryptocurrencies more relevant while
protecting investor funds.
Stating some of the solutions cryptocurrencies have created due to
these meaningful discussions, Cowen explained:
“We’re at the point where crypto finally has to prove its
social worth. But what might that mean? Imagine using crypto
as a medium of micropayments to pay for media on the
internet. Or perhaps you’ll use the blockchain to verify your
identity, rather than telling some stranger on the phone the
last four digits of your Social Security number.”
However, Cowen concluded his op-ed by stating that bitcoin may be
facing its “do or die moment.” It’s time, he wrote, for bitcoin
to “put up or shut up.”
“Think of bitcoin and other crypto-assets as like a company that is
finally receiving a cash call. I am modestly optimistic, but it is time
to put up or shut up. Let us hope that this ‘do or die’ moment will
once again bring out the best in entrepreneurs,” he said.
least cryptocurrency investors. Trading at insane prices towards the
tail end of 2017, crypto values have fallen closer to earth, with a large
majority shedding as much as 80 percent of their value. This has led to
quite a bit crisis talk, with some commentators prophesying an
imminent crypto crash. Economist Tyler Cowen, though, isn’t
sounding the alarm — yet.
In an op-ed published in Bloomberg , Cowen, a professor at George
Mason University, wrote that a crypto price crash could be beneficial
to the market, as it could set the market up for something big in the
future. He made references to the 19th-century bubble which saw the
collapse of railroad stocks and the dotcom crash of 2000. In all these
events, Cowen argued, there were some negatives with plenty of
positives.
“Internet stocks plunged in the dot-com crash of 2000-2002, but that
in turn cleaned out the bad companies and paved the way for the
subsequent tech revolution, including the rise of Amazon and
Google,” Cowen explained.
As the world has come to realize, where cryptocurrencies are
concerned, past events cannot determine future circumstances, but one
idea Cowen holds dear is that a price collapse does not necessarily
mean the “end of a technology or its relevance.”
For Cowen, cryptocurrencies saw a growth rate in value to almost $800
billion from zero, which made the market attractive to investors of all
types. The ease of entry into the market also didn’t help matters, as
an influx of “junky ideas were tossed around and then often funded
by ICOs (initial coin offerings),” the economics professor noted.
While cryptocurrencies have a lot of use cases, including trans border
payments and the creation of dApps, some neutrals still see it for its
drawbacks — of which money laundering and drug trade stand at the
top. Cowen, however, believes the slump in prices has led to more
discussions on how to make cryptocurrencies more relevant while
protecting investor funds.
Stating some of the solutions cryptocurrencies have created due to
these meaningful discussions, Cowen explained:
“We’re at the point where crypto finally has to prove its
social worth. But what might that mean? Imagine using crypto
as a medium of micropayments to pay for media on the
internet. Or perhaps you’ll use the blockchain to verify your
identity, rather than telling some stranger on the phone the
last four digits of your Social Security number.”
However, Cowen concluded his op-ed by stating that bitcoin may be
facing its “do or die moment.” It’s time, he wrote, for bitcoin
to “put up or shut up.”
“Think of bitcoin and other crypto-assets as like a company that is
finally receiving a cash call. I am modestly optimistic, but it is time
to put up or shut up. Let us hope that this ‘do or die’ moment will
once again bring out the best in entrepreneurs,” he said.
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