Blockchain.com wants to make you feel even more FOMO.
As bitcoin continues to have its own bull run, crypto wallet company and block explorer provider Blockchain.com has released its own investment thesis on buying the speculative asset—and other altcoins. The 150-page document outlines various reasons why people don’t already own crypto. But it also provides three reasons why people should. To save you the time, here is the TL;DR.
Crypto as a store of value against political risk
The world is in tumult. Global trade wars are in full swing. And a financial crisis is impending.
Okay, the report didn’t go quite that far, but it was close. It starts with the bold statement that, “It is always just a matter of time until the next financial crisis.” Then it continues to go through the various ways that politicians are struggling to manage fiscal policy around the world. The solution? Well, bitcoin, obviously.
It points out that, “bitcoin, ironically the ‘hardest’ asset in history, is virtual.” A hard asset is something physical and valuable, like gold and silver. However, when the price of such physical assets increase—more people mine them and the supply goes up. In contrast, the supply of bitcoin is fixed, and has a deflationary mechanism built into it to increase scarcity over time.
The report provided a few reasons why Blockchain.com is so bullish on bitcoin. Namely that its supply has shrunk thanks to 4-6 million coins being lost by feckless wallet owners, the upcoming halvening and the continued stashing of the currency in long-term storage all increases scarcity. What does scarcity equal? Higher prices.
It also speculated that we have yet to see how bitcoin will perform during an economic downturn.
Building an internet of value: Web3
Is the promise of blockchain comparable to what the Internet delivered?
Blockchain.com certainly believes so. The report says that the internet was so valuable because it opened the doors to communication between everyone—without needed permission. Blockchain builds on the free exchange of information, by allowing the free exchange of value.
It means that banks are no longer gatekeepers. Although the widespread use of custodial wallets and know-your-customer requirements creates new types of middlemen.
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But in comparison to the Internet, blockchain technology is progressing at a faster rate, the report claims. It took the Internet 20 years to get to 16 million users whereas Blockchain.com estimates that more than 30 million people have already used cryptocurrencies—in just half the time period.
And people are using it. Daily bitcoin transactions are already higher than PayPal, and are nearing the levels of VISA and Mastercard, the report shows. This is largely due to its ability to send high-value payments with cheap fees. But outside bitcoin, there’s a larger movement taking off.
The future of finance is decentralized
With embedded “magical” internet money, there are a lot of interesting applications that can be made. This is largely known as DeFi—or decentralized finance. The theory being that financial infrastructure can be built without the need for banks.
Blockchain.com lists a number of advantages to doing so: From being censorship-resistant to being more transparent and auditable. It states, “substitution of many traditional business processes and services with blockchain technology and smart contracts is inevitable.”
One of the industry’s shining examples of DeFi in action is the stablecoin DAI—which is pegged to the U.S. dollar but does not involve third parties holding stores of dollars to keep its value. At last count, there are thousands using it, and it’s already evolving to provide sophisticated financial tools like crypto-backed loans .
In fact, Blockchain.com goes so far as to predict the death of cash all together if crypto has its way. Time to trade in those rubles and dollars, folks.