Cryptocurrencies, Fact or Fiction
July 2021
Written by : James Kallman
Also available on Forbes Indonesia, June 2021 edition
As Noah Harari revealed in his book Sapiens, one of the most significant differences between the human race and other species is that we are quite willing to believe in fiction with a bit of persuasion.
Take money, which we view as an essential to existence; it’s only fiction, its value purely arbitrary to be agreed between the buyer and seller at a fixed point in time. Other species don’t buy into it; no self-respecting monkey will ever swap a ripe banana for a fistful of the dollar, no matter what their value. Of course, he’s dealing in the present when it comes to food in hand!
Currency is only a medium of exchange throughout human history, from cowrie shells through Spanish doubloons to US dollars and now Bitcoin, Ethereum, etc. You might wonder why I’ve included the cryptocurrencies. Still, they are growing in respectability, especially since Tesla acquired US$2.48 billion in Bitcoin and plans to accept it in payment for its cars, although Elon Musk does sound a note of caution; about “not risking life savings.” (Recently, Elon Musk announced that Tesla no longer accepts Bitcoin over climate concerns.)
The internet has continued to open up many new ideas, many doomed to failure, but some like social media have grown to become an essential part of our lives. Will cryptocurrencies also become necessary for life in the future, even for someone to whom NFT remains just a group of letters today? But understanding is not necessarily an essential part of the equation, especially in the world of art. Beauty is in the eye of the beholder, as they say. Remember when an artist taped a banana to a wall at an art event in Miami, Florida, and sold it for $120,000? And then someone else ate it? Legendary George Carlin hits the proverbial nail on the head (or the tape on the banana?) when he foretold the 2019 Basel Banana story through this quote. Some shmuck did buy that rotting banana for $120,000 because it was two things that had never been nailed together before.
Yet, for most of us with a single Bitcoin valued at Ind Rp 842,669,680, it means the Bitcoin wallet remains largely empty. It doesn’t seem a practical currency and, to date, is better known for its association with the dark side of the web and payments to unlock hostage internet accounts. Cryptocurrencies don’t know the number in the hundreds, however, but in their thousands. Nor is stability the name of the game, for they usually soar in value on their novelty before taking a deep plunge and then maybe leveling o" again. Wild fluctuations are often the norm. They seem the exact opposite to what one would expect from a currency, stability. And yet they may have a purpose, something for which a common currency was not designed. Cryptocurrencies can be used as payment for NFTs, which can then be used as a digital authentication. While never replacing conventional money, they can perhaps allow us to engage in our little world of !ction.