I’ve been thinking a little bit lately about why the cryptocurrency market has not completely collapsed on itself. What most innovation-averse pundits miss is that if there were no underlying intrinsic benefits to the pyramid that’s being built, it would have already imploded like a house of cards.
To be sure, much of the value in the market comes from speculation; a belief that in the near future digital currency will be easier to use, more stable, and more capable of handling the scale required to be a global financial solution.
In the short-term however, I think most if not all cryptocurrency developers are missing something in the environment: the fact that some unknown percentage of their value comes from entertainment. Dog-e coin, stupid as it is, realizes this.
There are definite and obvious parallels to be made to the world of sports. When you browse www.coinmarketcap.com you see a ranking of market caps of digital currencies. When I browse it, I see the league standings of a new form of mass entertainment.
Imagine that every coin on coinmarketcap.com was a sports team in the NFL, NBA, Premier League, etc. It each has dedicated (perhaps feverishly) followers who despise most other coins/teams and will publicly disparage them at any opportunity. Each coin has its own unique set of branding attributes - colors, logos, designs, websites, clothing, and more - that contribute to the overall resonance the coin has with a user. I know that even though I love Peercoin for its technical fundamentals, part of the love comes from how the logo, colors, and community make me feel when I use it and communicate that desire to others.
If you change your vantage point of the marketplace to include entertainment, perhaps even the term “speculation” doesn’t fully encapsulate what’s happening right now with crypto valuations. I view a portion of the value created as just pure gambling - a concept that has been associated with sports since the first caveman threw a stick further than his friend and won some shiny rocks as a bet. People love to bet on their selected team, even when it’s not the rational choice - heck, Junkcoin has a half million dollar valuation today. I think the positive utility gained from gambling as a form of entertainment, even when you lose, is not being fully considered in discussions of value.
I hope this thread can stimulate some out-of-the-box thinking on what exactly cryptos can be, and where their value in the marketplace is derived from. If we can make strides to make Peercoin more “fun” and simple to use (continual improvement of branding elements, especially the GUI of the Peercoin client) it will create more lifelong supporters in the entertainment niche of the marketplace. And I truly believe that the coins that can bootstrap their value with entertainment in the short-term stand a chance of gaining the critical adoption levels required to transition into a true currency (defined as a widely-accepted medium of exchange).