Why do you think this?
I've seen a few people on the internet make this claim - but none of them have given any concrete reasons why they think so.
If you were to just take my word that blockchain technology is going to really take over in the future, that it will be comparable to the internet in terms of technological advancement in the history of mankind, then that is what I base my belief that this is still the beginning. If crypto vanished tomorrow it wouldn't really change a whole lot because the technology behind isn't implemented. This will definitely change.
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The link you provided did backup the previous idea I've seen in this thread and elsewhere that the technology is what is important rather than the cryptocurrency - but that is about the depth I've seen other people explain it; i.e. it just is; seems to be the standard answer.
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Surely if the value of cryptocurrencies keep going up (which they need to if they're going to reach that level) - it'll mean it'll never be stable enough to use as an actual currency. And if that's the case - why would it be going up so much?
And if it does become stable enough to use as a currency - why would people choose to do so?
If the value of crypto keeps going up and we have hit the limit in terms of advancement and progress, then yes, this is one massive bubble and the price is going to go up and down like a whores knickers. I am no economist but I would imagine if and
when a crypto becomes completely mainstream that the growth would end up being parabolic, as apposed to what currently looks like exponential growth. I don't know what economic problems there might occur, but I think we have to just find out what happens next....
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But how? How does a crypto
become completely mainstream? How does it avoid the contradiction of having to become widely used to have any significance but not being able to be widely used if it is in the process of doing so?
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Check out the reddit link I posted, it's very clear to understand but an analogy it uses makes sense to your question "why would people choose to do so?" I will try to mimic the analogy with some extra thoughts:
Along comes TAXIcoin. Programmers create an app on the ethereum blockchain called taxicoin. It is exactly the same as uber but instead it is built on the blockchain. There is no CEO getting huge chunks but instead programmers who will presumably own a small % of coins in circulation with the idea that it will increase in value as their app becomes popular. It will of course have to be the best app with few mistakes along the way because competition is fierce. Currently uber take 20% of each fair, I do believe that in Vegas it's 40% according to an uber guy that probably wanted a tip. In order to use a taxi with taxicoin you will have to obviously use their currency on their app. The biggest difference here is now the taxi is getting a much bigger share whilst using a completely decentralised app. This price of a taxi will never change in terms of USD but as the demand and popularity of the coin increases, the price will go down if you have held some TAXIcoin, these types of people will be people that held interest in the coin perhaps from the ICO stages or somewhere along the way.
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I read the reddit - and will come back to some broad points at the end. But in the instance of this specific example:
"In order to use a taxi with taxicoin you will have to obviously use their currency on their app"
You have to buy their currency - which comes back to the over riding question; how can you use it if it's not stable?
"...programmers who will presumably own a small % of coins in circulation with the idea that it will increase in value as their app becomes popular..."
So it's definitely not a stable currency; programmers will only get paid for their work if the currency rises.
It could still work if the price you're paying is less than the mainstream currency cost - but when a hypothetical customer arrives in Las Vegas; why are they going to use TAXIcoin instead of Uber? A $12 cab ride for $10 is competitive enough - but how are they going to know it exists?
The most obvious way is a load of marketing to raise brand awareness - but who pays for that? The programmers? The person who created the app (if it's not the programmers)?
That's an awful lot of upfront cost for a product they don't know is actually going to take off. It would probably be best mitigated by packaging up the whole operation in a limited liability company so they don't all get stung too badly if it all goes tits up.
But it's a company, they're going to have to start paying wages to anyone doing any of there marketing/HR/etc - probably including themselves; because what are they going to live on before the app goes live and/or gets popular enough for them to actually earn any money from people actually using it.
That's a whole new extra set of costs - you know the best way to recoup that; probably take a percentage of the fare of everyone using the app you gave them. 20% should probably do it.
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Traditional companies will not be able to economically compete and therefore blockchain wins. I can only think that this is why big companies are not shifting over to blockchain yet.
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Traditional companies aren't set up to exploit people and milk excess profits (well, in general at least) - they operate in the way they do because that's the most efficient way of doing it. An alternative could be tried - but as I've suggested; it will have all sorts of problems in trying to compete.
Which leads to the broader point; everything that it is suggested blockchain can do and allow - can already be done.
People can already use apps which mean they do what Uber does, without using Uber. The drivers who are using Uber are doing so because they think the extra work provided by the bigger network is going to outweigh the loss of commission.
That Reddit link also mentioned the idea of licensing music directly - so that the middle men don't get a commission
If a film producer wants to use that song in a movie, they can purchase the rights based on the terms set by the artist who will then get paid directly
as well as this already being possible; it misses the point. The middlemen aren't paid because they're middlemen - they're paid because they can find the thing the buyer wants and they can often negotiate a higher selling price on behalf of the seller.
It also mentions the insurance idea of paying out automatically if a plane is delayed rather than people having to claim it - as far as I know this isn't being done with mainstream currencies; but it could be. Instead of the blockchain connecting flight information and payment it just needs a connection between flight info and banking info - which they'd have from when the insurance was bought. A similar process is already being used by TFL to reimburse people for delays if they're on Oyster cards.
It also mentions automating paying rent via smart contracts on the blockchain - so basically a direct debit then.
Even the central idea that blockchain is instantaneous compared to the slowness of traditional banking is a bit odd. Almost every transaction in banking is either instantaneous or effectively so (the transaction might not have actually been processed - but to all intents and purposes it can look like it has and be treated by all concerned as it has).
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The recurring problem underlying the whole idea is: what is going to make people change from doing what they're doing now to something new?
Why use cryptocurrency instead of mainstream currency? Why use blockchain rather than the current systems?
FWIW I think the second is more likely, if blockchain is actually more efficient than current systems I could well see organisations adapting it to replace how they currently do things.
If banks could save a fraction of a penny on every transaction by using a blockchain derived system it will be worth billions and have a significant impact on the financial system - but at the moment that's probably the only way I can see this having any long term meaningful impact.
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