“The Economist” this week published an article describing the cryptocurrency industry as resilient and comparing it to cockroaches. The article discusses various perspectives on the continued growth of the cryptocurrency industry.
Table of Contents:
The “cockroach theory” of cryptocurrencies
Decentralized networks are difficult to collapse
Some countries have started actively adopting cryptocurrencies
Regulation is gradually becoming clearer
Despite some traditional financial professionals and regulatory authorities considering cryptocurrencies as investment tools for criminals and money launderers, according to data compiled by 99Bitcoins, Bitcoin (BTC) has been declared “dead” 474 times throughout its over a decade-long history. However, these setbacks have not crushed Bitcoin; instead, it has consistently bounced back and reached new highs.
“The Economist,” a well-known British journal, published an article this week analyzing why BTC has risen by over 150% this year and describing the cryptocurrency industry as cockroaches from an interesting perspective.
We know that cockroaches have astonishing vitality. Research has found that even after being decapitated, they can survive for a long time. Their flexible exoskeleton can withstand pressures up to 900 times their own body weight, and they are excellent divers. “The Economist” believes that the cryptocurrency industry also exhibits similar resilience in the face of multiple challenges.
Although many people despise cockroaches, they play an important role in nature by converting decaying matter into nutrients. Similarly, despite being questioned by many financiers and regulators and considered tools for money laundering and cyber attacks, cryptocurrencies are gradually becoming indispensable in the financial field.
Why does the cryptocurrency industry seem invincible? “The Economist” presents several viewpoints:
First, the indestructibility of cryptocurrencies is rooted in the technology behind them. Digital currencies such as Bitcoin and Ethereum, as representatives of cryptocurrencies, are different from traditional companies. They maintain transaction records through decentralized networks, which gives them high stability and security. Unless their value drops to zero, this system will not easily collapse.
In some countries, people have already started using Bitcoin and stablecoins for savings and even payments. El Salvador has even accepted Bitcoin as legal tender and has high hopes for the widespread application of cryptocurrencies in future technologies.
Meanwhile, artists are actively exploring the possibilities of non-fungible tokens (NFTs), and even former US President Donald Trump has issued NFTs multiple times. During the prosperous period of the cryptocurrency industry, it has attracted many intelligent developers and raised a large amount of capital. They are committed to developing new applications for blockchain, such as social media platforms or games that allow users to earn while playing. These innovations bring new vitality to the industry.
Furthermore, recent court rulings on cryptocurrencies in the United States have prompted more mainstream investors and large fund management companies such as BlackRock and Fidelity to show interest in cryptocurrency products, further enhancing the legitimacy and attractiveness of the cryptocurrency market.
In conclusion, “The Economist” states that despite frequent criticism and challenges, cryptocurrencies, like cockroaches, demonstrate astonishing vitality and play an increasingly important role in the financial ecosystem.
Further reading:
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Tags:
Cryptocurrencies
Decentralized networks
Bitcoin
Cockroach theory