The continuing conversation around cryptocurrencies tend to revolve around such questions as, “Do Bitcoin and other cryptocurrencies have a future? Or at least one outside the speculation market?”. While these questions make excellent fodder for cable news banter and social media slugfests, answering it in any real way – meaning any way that benefits someone other than the “thought leader” – appears all but impossible. Even a sudden and complete collapse of both the Bitcoin and the altcoins markets would not fully erase the future of cryptocurrencies (after all, most U.S. floral shops still carry tulips, the Dutch Tulip Bubble of 1637 notwithstanding). Nonetheless, such a crash might force us to rethink cryptocurrencies. Conversely, what does success look like for Bitcoin? Is a final victory over fiat currency the goal? Or is living in a world where Bitcoin is accepted by Subway reward enough?
Assigning a single future to cryptocurrencies might best be left to cultural prognosticators. What then should the “crypto-curious” among us conclude about the future of blockchain currencies? How might we decide without swallowing ideological Kool-Aid or wading aimlessly through a morass of expert speculation?
A Sample Case Study
My best idea entails asking what I hope is a less grand question, namely, “what futures could cryptocurrencies have, and what sets of conditions might bring one, or some, of these futures about?”. A technique for answering this question, by no means the only one, might involve looking at case studies.
I came across a gaming company called FunFair recently. What FunFair does is use the blockchain to allow users to create, play, and administer “fair” online casino games. Here, the blockchain’s transparent nature resolves an ancient and obvious problem – the perception that the odds are unfairly stacked against one in a casino, and it arguably offers a level of protection not found in the nearest gambling den. Furthermore, this platform allows “anyone” to set up a low-cost cryptocurrency casino stocked with, as FunFair claims, secure and fair games like the ones offered at Vietbet as per the Vietbet review given by the players of the game. I think this a very promising use of blockchain technology.
That said, I have no idea whether buying Fun Tokens on an exchange is a smart move or not. However, FunFair might be able to tease out one or several potential useful applications as a cryptocurrency. Here we have a sector with significant trust issues (the possibility of getting cheated by a game or having one’s money lifted by a faceless online casino) and relatively high barriers to entry (presumably it isn’t easy for the average person to set up a secure digital casino account at a low cost). If the blockchain model can resolve this problem, perhaps one can apply the “FunFair model” to the analogous cases, namely low trust/hard to facilitate transactions that have nothing to do with baccarat or blackjack.
A Deductive Reasoning Template
If our FunFair model proves translatable to multiple situations, the cryptocurrency has a viable future. It may not be enough to satisfy its true believers, but the technology will have managed to find an application where it thrives. If the FunFair model has no applications outside of casino games, we might have to conclude this particular future is modest. If so, we should either leave it at that or assign the FunFair model a diminished yet semi-relevant position in the broader cryptocurrency ecosystem. If the FunFair model proves itself irrelevant altogether, we can conclude that it is either a bad idea or that it is a good idea that present conditions do not support.
In this final case, we can either abandon the model or try to think through what conditions might be needed to make it work. We can also take another step back and ask whether the analytic frame we were trying to translate – low trust/hard-to-facilitate transactions under the FunFair model – was in fact, the best use of that particular case study.
Letting our cryptocurrency oracles answer the mother of all questions for us is a much easier approach (and one that is much more amenable to Twitter). However, as any reader of Shakespeare can tell you, broad, vague prophecies that promise success or forecast doom have a way of getting people into trouble.