I am a strong believer in the value of blockchain and the cryptos. But I ponder the relationship between value of the blockchain itself, which can be partially predicated on the adoption, and the value of the underlying token, which can be pure speculation sometimes.
Here is my analogy when explaining to people unfamiliar with blockchain, in light of the high prices of some tokens and the potential risk that could pose. Please let me know if you like it, if I miss the mark or can be improved upon.
Blockchain technology and associated tokens are like the global airline system. Planes fly around carrying stuff, people or cargo, and touch down periodically. That's great! Now what if the planes themselves became worth $4 Billion each? What incentive would the airline carriers or Fedex have to continue to put the planes in the sky? They might just park them in hopes of a higher price, or just sell them. What if the price of the planes went to $25 billion each? How would that change things?
The point is, can the high value of a crypto currency damage the long term viability of the its blockchain itself? Maybe not if the crypto becomes a store of value, then the blockchain is less important for providing value other than supporting the token itself.
Look at Sia. What would happen if 1 sia coin went to $5? The storage then may look expensive.
Anyway, feedback appreciated!
Make sense or not?
Nice post! I will follow you from now on.
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