Cryptocurrencies have been around almost 10 years now but the space is largely in its nascent stage. It was only last year that digital tokens gained wide popularity. This affected the market in a positive way but we also have to note that the technology that underpins digital assets caught the eye of developers as well.
While the majority of traders show little interest in the different blockchain technologies, the IT community is somewhat more into developing them. The truth is, the crypto community is can be theoretically divided into two groups.
In for the money
The first group consists mainly of traders from all walks of life- students, physicians, engineers, anyone who is looking for short-term gains with small investments. The guys in this group want to quickly trade digital assets and seamlessly transact their funds from A to B. They are closely following the market for financial reasons and crypto features like decentralization and privacy are not their top priorities. Thanks to this group the financial specialists deem the crypto finance a bubble. Because the average trader would not involve in traditional stock trade, has almost no prior trading experience and is ready to pour his savings into the market. He is there for the money.
Now don’t get me wrong, there is nothing bad about this behavior. In fact, it is the average user that complains about bad UI/UX. This is why developers always listen to what the average Joe has to say. Because his words matter, a lot. If a product (crypto token) is difficult to work with, then it is going to lose popularity over time. Traders want everything to be easy-peasy, I want it too because it saves time, money and nerves.
As I said, the second-largest group within the crypto space consists of developers, security researchers, people who are not programmers but are into technologies. And of course, those who believe that cryptocurrencies would disrupt the current financial system, the governments, and practically anything else.
The individuals in this group are more likely to neglect the financial aspect of cryptocurrencies. Instead, they focus on the technology. They want to make it faster, more efficient, adaptable, and large-scale compatible. Since everyone knows the major pain points of digital currencies such as high transaction fees and time-consuming transfers the members of this group often discuss these viral topics on Telegram, Reddit and GitHub.
Hard forks suck big time
Needless to say, when it comes to making the space better, smaller groups tend to form, as they all have different opinions on the matter. In 2018 alone a major cornerstone such as ASIC miners managed to divide the community. Some suggest cryptocurrency must remain ASIC-resistant and thus decentralized, while others prefer faster ecosystems over decentralization. As we know ASIC miners come with a cost, which not everyone is willing to pay. I am talking about both money and centralization.
One way to avoid ASIC miners is through a hard fork. Developers are also ready to fork a specific token to make the spin-off a better version of the original one. Unfortunately, the way I see it, hard forks do more harm than good.
Here is why:
– There are enough cryptocurrencies out there. Besides, there are enough good products that do not need a hard fork. I am not saying they are perfect, I am saying that instead of forking them and starting from scratch, the developing teams can execute slight modifications when needed.
– Spin-offs fail. It is historically and statistically proven that forked versions have a short lifespan. Some traders like them because of the airdrops. Apart from the easy money made, spin-offs have no value. So far the community has lost interest in every forked token, apart from maybe Bitcoin Cash, which indeed managed to justify the hype.
– Hardforks flood the market. We do not need more tokens, we need a couple of coins that work on large-scale, we need tokens that bring trust and credibility, we need tokens that merchants accept. If we don’t achieve this we are playing with Sims money. Instead of stabilizing the market by investing in credible projects like Bitcoin, Ethereum, Litecoin, Monero or Ripple, we are cashing on obscure forks with the hope of getting quick-rich.
– They distract us from more important things. Whether we like it or not we have to find a way to keep the crypto momentum going, otherwise the market will die because let’s say it like it is – we have a shitload of problems to deal with. Here’s some food for thought – regulation, security, privacy, liquidity, adoption, trust, credibility, worldwide use.
Love it or hate it, this is my opinion on hard forks and their impact on the space. We all enjoy fast money but sometimes we have to think long-term in order to reap the benefits of distributed ledgers.