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Cryptocurrency: Utility Is The Most Important Thing

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We see a lot of theories about what is going to happen to both crytpocurrency and fiat. Many of them are based upon nothing more than simple lines that people regurgitate repeatedly. Never mind that it honestly has no basis in the real world.

The United States Dollar, for example, has the "full faith and credit" of the government. This has led people to believe it is something magical. The truth is each fiat currency has the same thing from its government.

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So what makes the dollar valuable when as compared to the Japanese yen? There are a couple things.

The first is the utility of the token. This is the currency that is accepted in more places throughout the world as compared to anything else. Some might point to the fact that it is backed by guns, which is not completely untrue. However, when you look at the fact that almost all illegal activity, especially that which is international in scope, is done in USD, we can see the reach.

When it comes to acceptance and liquidity, the USD is the choice.

Which brings up the second reason why the USD stands out. It is not the "full faith and credit" of the government that makes the USD attractive. Instead, it is the investors who give the USD value.

We just saw an epic meltdown in the global economy as well as markets. Where is global investors flee? Was it gold? Real estate? No. It was the USD. When the proverbial you-know-what hit the fan, people opted for cash. In this instance, cash equated to USD.

Will this always be the case?

History shows us, no. If we think back to who was the king before the USD, we learn how this operates. For a long time, the GBP was at the top of the mountain. Britain's reach was strong for a number of centuries. It was the epicenter for trade, finance, and colonization. This lasted right up to the time period of WWI when it lost its place to the United States and the USD.

This, of course, had been an ongoing trend for a number of decades as the United States got stronger during the second half of the 19th century.

One of the most important (and overlooked) features of fiat is the fact that it is a monopoly. On an international scale, traders have plenty of options. Within geographic boundaries, however, there is little choice. Almost all countries are required to use a single currency that is selected, and controlled, by the government. Individuals have no option in their everyday lives.

Cryptocurrency is changing all of this. Here we see currency that is not under the control of any government. This is crucial. By operating outside the reach of government, people are given a choice what they want to use. Of course, this is going to come down to the core requirement: utilization.

As I travel around the crypto-sphere, I see the utility of crypto increasing. This is going to result in greater adoption across the board. My view is that as things get worse with the global economy, more people are going to turn in this direction.

We are seeing ecosystems being build out which is providing said utility to people. Bitcoin, for example, is making strides with the Layer 2 solution, Lightning Network. Ethereum is seeing the applications on the DeFi platform growing. All of this is feeding into the opportunity for more use cases.

Many are approaching the social media aspect of things. We are seeing a number of projects focusing upon this niche, which is enormous. To me, this bodes well for a blockchain like Hive.

In a short period of time, 6 weeks to be exact, we saw a lot of progress. The number of options are growing weekly in terms of what people can do on here. As applications keep updating , this will only extend the reach.

For example, there was a video put up that shows the proof of concept for @threespeak's Android app.

Earlier this week, we saw the announcement of a new game on Hive, EXODE, that is in Alpha with a browser version of the game. The next phase is to get a client version going.

Mobile is very important. Here is a post that details a new mobile app that is coming to Hive called @dapplr. They have a worker proposal they put together in an effort to get funding.

Activities like these extend the reach of the entire ecosystem. At the same time, if successful, this provides more utility for the HIVE token.

Bringing this all back to the idea of currency. Currency is a tool that is used within an economy. Cryptocurrency provides people with the ability to monetize the activities of their users by enabling peer-to-peer transactions. Obviously, the transfer of value is one use case. The ability to send money anywhere in the world without the use of a third party is huge.

However, this is only the tip of the iceberg. When we consider all the activities that people do on a daily basis, all are open to this possibility. For now, the development is lagging. That, naturally, is changing across the crypto world. Each week, we see announcement of applications that are providing more utility to users.

Hive is a microcosm of the whole. We are still in the development phase of things which is going to last a while. At the same time, getting the word out to new users is crucial.

The network effect is vital. In a simple form, this is basically a friend telling a friend. One of the advantages of Hive is the dedicated user base. This is something that is hard to see but the numbers are bigger than most. While they do not come close to matching those in the centralized world, the DApps are ahead of most other blockchains.

This is important since it is easier to grow when there are 10,000 people talking about something as opposed to 500. Of course, when you consider that Twitter has close to 400 million users, we can see how much work is still ahead of us.

Nevertheless, token values will grow as utility increases. The goal of Hive is to keep increasing the number of offerings so that users have more options. It only makes sense that the more use cases for the token, the greater the desire for it.

As we just witnessed, for now, the USD is the preferred fiat. People know that the dollar offers them the most security and is accepted most everywhere.

In the future, cryptocurrencies are going to represent the individuals within a particular ecosystem. The use of that currency is going to be voluntary. Thus, the more people who are involved, the greater the value that is attributed to it.

The flip side, of course, is those without much use are going to have little value. Hopefully, the industry progresses rapidly to start eating into the number of people using the USD. It is time to start siphoning some of the activity away from there.


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Posted Using LeoFinance