I think what people need to realize about cryptocurrencies is that they aren't going to derive their value from being convertible to fiat currency.
Rather cryptocurrencies are going to be revolutionary in the sense of how they can be combined with other technologies.
For example, what if World of Warcraft used a cryptocurrency based system for ingame currency? Where the ingame money was actually finite and that in theory the players in the game could suffer from an economic depression. Or a few players could hoard all the wealth in the game. etc. etc.
The game would be way different than it is now, which is to say that it just emulates an economy, not actually implements one.
This is probably a bad example to get what I am trying to say. So lets imagine a different scenario. Let's say we wanted to build a social network, where we didn't actually want everybody to just be able to say whatever they want without a threat of consequence. What we want is a social network where you have to do something to earn the ability to speak, and once you speak you lose the currency to be able to speak again until you do something once again to earn the ability to speak.
What you have to do in order to earn the ability to act depends on the service in question, but the same basic concept of a cryptocurrency is what underlying the system. In that the platform only has value when the ability to act is a limited and highly valued resource.
> For example, what if World of Warcraft used a cryptocurrency based system for ingame currency?
Why would they need a distributed system? They already have an in-game currency with a central authority (their trusted servers) and can already limit the rate of currency creation (reduce monster's gold drop rate to zero or whatever).
EVE Online shows just how well a central authority can manage a virtual game currency. No crypto or blockchain needed.
> Let's say we wanted to build a social network, where we didn't actually want everybody to just be able to say whatever they want without a threat of consequence
Cool, so like a reputation system on old forums where you have to have a certain number of positive comments to participate in other private forums, and there's heavy moderation?
Oh woah, no crypto, no blockchain. I don't see how cryptocurrencies make the fundamental problems of building such a system any easier btw. Attaching a value to someone in a database is easy, and even distributed social networks like mastodon trust the participating servers (and if you don't, you block the whole server).
Cryptocurrencies are a problem looking for another problem, and it turns out rubbing two problems together doesn't make fire.
A central database is usually better (the WoW example), and they're often orthogonal to other ideas they're shoved into (reputation system, file storage, whatever).
This is another reason why i think all these crypto based startups that are using ICOs as an alt means of funding are totally delusional and devaluing their product. You take all the value out of your platform if you take away the requirement that people must do some form of work to generate wealth. The fact that the platform acts like the Fed and can print their own currency whenever they want, proves that they don't truly get the point of why cryptocurrency is innovative.
Rather cryptocurrencies are going to be revolutionary in the sense of how they can be combined with other technologies.
For example, what if World of Warcraft used a cryptocurrency based system for ingame currency? Where the ingame money was actually finite and that in theory the players in the game could suffer from an economic depression. Or a few players could hoard all the wealth in the game. etc. etc.
The game would be way different than it is now, which is to say that it just emulates an economy, not actually implements one.
This is probably a bad example to get what I am trying to say. So lets imagine a different scenario. Let's say we wanted to build a social network, where we didn't actually want everybody to just be able to say whatever they want without a threat of consequence. What we want is a social network where you have to do something to earn the ability to speak, and once you speak you lose the currency to be able to speak again until you do something once again to earn the ability to speak.
What you have to do in order to earn the ability to act depends on the service in question, but the same basic concept of a cryptocurrency is what underlying the system. In that the platform only has value when the ability to act is a limited and highly valued resource.