The Flinchum File

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What’s In A Name ?


Bitcoin and cryptocurrencies are misnamed.  Those names give the impression that they are actual currencies and can therefore be valued the same way as traditional currencies, like the dollar, the euro, the yen, etc.  Of course, the ever-present supply & demand for the cryptocurrencies is the final determinant of their value, but it doesn’t reflect balance of trade, balance of accounts, reserve status, trade treaties, etc. used to determine supply & demand for real currencies.  It is a different type of supply & demand.

There are already more than a thousand competitors to bitcoin as a “cryptocurrency”, e.g., ethereum, solana, dogecoin, cryptoswamp, etc.  Each has their own unique blockchain!

A frequent comment is that “I don’t like bitcoin, but I do like the blockchain.”  The problem is that there is no “single” blockchain, no “the” blockchain.  Each cryptocurrency has its own blockchain.  The value of the currency should reflect the value of its blockchain.  Some blockchains are better suited for retail transactions, some are better suited for real estate transaction, some are better suited for non-fungible transactions and so forth.  Speed of transactions is also highly variable, with some every ten minutes and some every ten seconds.  Bitcoin is the slowest.

Until a thousand plus blockchains are evaluated, investing in “coins” remains highly speculative.  No question, cryptocurrencies will remake the world of finance . . . but not tomorrow!

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