There’s a lot of “last straw” and “crypto is dead” chatter out there and that’s just not the case. You could forgive a casual observer for thinking that, given the scale of the FTX collapse and the spread of contagion, but a lot of people who should know better are rubbernecking the smoking wreck that is FTX and saying irresponsible things about “the end.”
If there were something intrinsic to or unique to crypto, some fatal flaw, that led to FTX’s demise, the “end” talk might be true. But there isn’t.
FTX collapse is down to sheer greed, duplicity, and stupidity; human traits that have been with us far longer than cryptocurrency has. When Bernie Madoff’s Ponzi scheme collapsed in 2008, was that the end of stocks? The end of banking? Of course not. It was just another in a long line of Ponzi schemes going back to the 19th century.
So, the business case for owning crypto is the same as it was in 2020, 2017, and 2013. It’s even more compelling now, actually, and I’ll show you why in a second.
What crypto has now is essentially a public relations (PR) problem – that’s all. And a lot of crypto’s biggest unrealized, future gains don’t actually depend on it being the prom king of assets.
Behind the Scenes, Blockchain Is Taking Over
Do you know what actually happens when you send an email? I mean, you type something, and then it shows up in someone else’s inbox. But underneath it all, an extremely complex transmission control protocol/internet protocol (TCP/IP) is working exactly as it should, ensuring information can be shared between A and B without A and B being on the same network.
Banking transactions are similar. Before Russia was publicly defenestrated from the SWIFT network, most of us had never heard of it. Right now, Russian bankers have gigantic headaches because most of them can’t easily access it. It’s the Society for Worldwide Interbank Financial Telecommunications, a network between banks that transcends borders to allow for the timely and accurate settlement of banking transactions – how banks in other countries send money to one another.
It’s really just another piece of gigantic, but quiet, electronic infrastructure that makes business faster and life easier – and more lucrative. The world practically runs on this stuff – the automated clearing house network, payment processors, or Amadeus, Sabre, and Travelport for global air travel.
Like I said, the world practically runs on this stuff… and blockchain is going to upend all of it.
Nearly every system like the ones I’ve just described can be implemented on the blockchain. Those systems will be faster, cheaper, more accurate, more transparent, and more widespread because of it, too.
Because electronic banking seems instantaneous, not a lot of people realize a simple “You sell/I buy” banking transaction can take as long as 10 days to actually settle via domestic clearinghouses. That’s 10 days during which fraud or mistakes can occur at virtually every turn, and judging by the hundreds of billions in losses every year, it probably does occur at every turn. The blockchain, however, is basically fraud-proof, and transactions are settled in seconds or minutes, not days.
And this is just one kind of system that blockchain can replace. Industries all over the world are beginning to realize that the blockchain is a much better way to do business. Even the U.S. military is beginning to use it for everything from supply management to combat data management.
This is the essence of “stealth adoption,” and it’s going to drive profits even harder than the increasing public popularity of cryptocurrency – which will rebound from the FTX collapse, I’m certain. But the great thing about stealth adoption is it doesn’t rely on great PR, just quiet dependability. It’s foolproof, fraud-proof, and scandal-proof.