A world of multiple crypto-currencies: Is it viable?

7/04/2018

This is more of a question that an answer.

The question that is in many minds, including me, if a multi crypto-currency model a viable one? New coins are being introduced at faster and faster rate. Many have nothing more than the credibility of the company that floats them behind it. It seems to be the new gold rush. Fast forward and you see a world full of coins created by companies and potentially individuals such as celebrities, politicians and others.

Is this truly viable? Can we have such a world of many cryptocurrencies or coins? Can such a world function?

I asked this question to many business leaders, economists and few friends whose advice I value. Surprisingly, they all believe that it can not exist. It’s not viable. Often quoted reasons are:

  1. Governments will not permit it
  2. People have no way of judging the true value of it
  3. How will one manage so many coins
  4. Who will provide the exchange facilities
  5. and so on…

I am not an economist. But these objections seem to be remnant of the past models of currencies. Let me take a contrary position – A world of of multi-crypto-currency is viable? The reasons

  • Governments may have only limited ability to stop or control it.
  • Many countries may in fact adopt it. Case in point Venezuela
  • A crypto-currency is infinitely divisible
  • Near zero transaction cost
  • Anonymity of owner/transaction
  • Borderless

What are your thoughts?

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