C-19 Exposes the Myth of Bitcoin as a “Safe Haven”

Bitcoin: The myth of a safe haven exposed by the global pandemic.

The difference is, Dec will be sustainable in the face of a crisis in the way that Bitcoin was supposed to have been, but has (so far) proved not to be.

If you’ve spent any time talking with a Bitcoin enthusiast, you’ve probably been told (undoubtedly many times) that situations like we are now encountering are precisely what this (and most current) cryptocurrency was made for. Some of crypto’s most ardent supporters have contended that since these digital asset are “uncorrelated” with traditional assets like stocks, they are “safe havens” against the type of economic crash Covid-19 is wreaking on the markets.

Much to the disappointment of true believers, Bitcoin — in fact, the whole cryptocurrency market — in the face of the current threat has cratered right along with the stock market.

Prescience could have foreseen this but common sense should have. Maybe now it will sink in: the digital token smoke and mirrors charade represented by current crypts (and the ropy technology that supports them) is a terrible way to secure your financial future and a disastrous attempt at establishing some kind of reputed stable “alt” economy or sustainable payments system.

What About Stablecoins?

For the purposes of this article, and its explanatory analogies vis-a-vis our tech and aims, stablecoins are fringe products: stablecoins function to create connections between the legacy world and blockchain. Thus, the raison d’être of stablecoins to mitigate and solve price volatility, which has so pervasively characterised cryptocurrencies while attempting to retain other characteristics of bitcoin, is interesting but not game changing in the way we propose.

As a result, the value of stablecoins is dependent on external factors that users cannot control, and in this regard they are very similar to a stock or a bond rather than a truly “decentralised” alternative.

Certainly, stablecoins are a part solution but not the whole solution to the real problem that needs solving: a step in the right direction, yes; the answer to a truly stable, user-centric crypt that will achieve wide-scale public adoption, generating wealth for all (but an already wealthy elite), no.

Q. What is the point of a crypt or mainstream economic system that tanks in the face of crises? A. None

Cryptocurrency: Inflated Financial Assets

In practice, Bitcoin is too slow and inefficient to act like electronic cash and hence support any sort of “alt” economy to rival its mainstream counterpart. (Proof-of-Work and other expensive and unnecessary protocols have effectively hobbled it.) Instead, many enthusiasts today view it as a form of “digital gold.” Real gold has long been considered a reliable store of value, and investors tend to see it as a form of insurance against an economic downturn.

Or at least they did. Until the proverbial excrement hit the fan two weeks ago.

“Surprised we’re seeing the Bitcoin price fall in this environment, would have expected the opposite,” Brian Armstrong, CEO of the popular US exchange Coinbase, tweeted on March 9, likely expressing what many Bitcoin fans were feeling. And that was before the carnage of March 12, when Bitcoin lost more than 40% of its value.

Though Bitcoin’s price has jumped since, the 40% dip of March 12 was enough to reveal the crypt’s instability in the face of the type of crises it was supposed to be stabilising HODLers against.

So is Bitcoin not actually a safe haven after all? Maybe. Maybe not. (At least if you can’t sell corn or livestock you can eat them.) Though it appears to have failed the biggest test of the idea yet, the debate will undoubtedly rage on, serving as a reminder that we are still figuring out exactly what Bitcoin is and is not.

Dec is What it “is Not”

It is the “is not” that our token, Dec, is specifically and unambiguously built as an antidote to.

Unlike stablecoins (which are really only a reflection of legacy commodities and aggregate collateralisation of other crypts), Dec is pegged to the value of user data; user data being a “commodity” that is controlled by every user at the level of every user.

Our platform and web browser ensures the 100% security and immutability of this data, hence ensuring its stability and value.



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Your data is value. Decentr makes your data payable and tradeable online. Decentr.net Medium.com https://rich-james.medium.com/ t.me/DecentrNet