What the dot-com bust can teach us about the crypto crash
Lessons from the Crypto Crash: Just like in the aftermath of the dot-com crash, the crypto market must now shrink fat.< /p>
Opinion
Economist Benjamin Graham, known to some as the father of value investing, once compared the market to a short-term voting machine and a long-term balance. While Graham would probably have been skeptical of crypto and its built-in volatility at best had he lived to see it, his economic theory nevertheless applies to some aspects of it.
Since the emergence of altcoins, the blockchain space has operated almost exclusively as a "voting machine". Many projects have, overall, been financially unsuccessful and even detrimental to investors and the space in general. Instead, they've turned crypto into a memelord popularity contest, and their success on that front can hardly be underestimated. Sometimes that competition is based on who promises the best future use case, but whether that future actually happens is another issue. Often it depends on who markets themselves better, through fancy infographics or ridiculous symbolic names and a series of associated "great" memes. Anyway, the success of the majority of projects is based on speculation and nothing else. This is what Graham called this "voting machine".
So what's wrong here? Many visionary people have earned life-changing money playing the game, and the constant talk of funding and building potentially world-changing decentralized technologies is the norm, so it looks like the space could be an ideal environment for founders and developers, right? This is not the case. These successes have often come at the expense of unsophisticated and hopelessly misguided investment newbies. Moreover, most of this value ends up in the hands of so-called ubiquitous vaporware merchants who propagate little more than misplaced value and broken promises. So where is Graham's balance, and when will it begin to produce its force? In this case, right now.
Related: The Decoupling Manifesto: Mapping the Next Phase of the Crypto Journey
The Crypto Crash Against the Dot BubbleThe Internet bubble is an ideal historical precedent for our p...
Lessons from the Crypto Crash: Just like in the aftermath of the dot-com crash, the crypto market must now shrink fat.< /p>
Opinion
Economist Benjamin Graham, known to some as the father of value investing, once compared the market to a short-term voting machine and a long-term balance. While Graham would probably have been skeptical of crypto and its built-in volatility at best had he lived to see it, his economic theory nevertheless applies to some aspects of it.
Since the emergence of altcoins, the blockchain space has operated almost exclusively as a "voting machine". Many projects have, overall, been financially unsuccessful and even detrimental to investors and the space in general. Instead, they've turned crypto into a memelord popularity contest, and their success on that front can hardly be underestimated. Sometimes that competition is based on who promises the best future use case, but whether that future actually happens is another issue. Often it depends on who markets themselves better, through fancy infographics or ridiculous symbolic names and a series of associated "great" memes. Anyway, the success of the majority of projects is based on speculation and nothing else. This is what Graham called this "voting machine".
So what's wrong here? Many visionary people have earned life-changing money playing the game, and the constant talk of funding and building potentially world-changing decentralized technologies is the norm, so it looks like the space could be an ideal environment for founders and developers, right? This is not the case. These successes have often come at the expense of unsophisticated and hopelessly misguided investment newbies. Moreover, most of this value ends up in the hands of so-called ubiquitous vaporware merchants who propagate little more than misplaced value and broken promises. So where is Graham's balance, and when will it begin to produce its force? In this case, right now.
Related: The Decoupling Manifesto: Mapping the Next Phase of the Crypto Journey
The Crypto Crash Against the Dot BubbleThe Internet bubble is an ideal historical precedent for our p...
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