Covid-19 Exposes the Myth of Bitcoin as a Safe Haven – hackernoon.com

Its fair to characterise Bitcoin as a reaction to the last global economic meltdown. At the time, this crypt offered great promise as a safe haven for investors against exactly the type of financial crash we saw in 2007/2008 and, with appalling (and predictable) inevitability, are seeing again now.

Let's face it, we all knew this crash was coming (yes you did, even if you didn't want to); we just didn't know when or how bad.

Now we know "when"... and "how bad"...? Well, by any market metric it's not looking good not by a long, long margin.

Getting it Right this Time Round

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.

We now urgently need technology and digital assets that won't simply be a rinse and repeat of the last ten years; if not, financial "stability" will continue to be measured in the time it takes the (now demonstrably) fragile mainstream economy to cycle from boom to bust.

So the question begging to be asked (and answered) is...

What the Heck Happened to Bitcoin?

Any and every Bitcoin enthusiast you've ever been trapped in an elevator with will have told you (undoubtedly many times between floors) that socioeconomic crises like we are now encountering are precisely what this (and most current) cryptocurrency was designed to insure us against. Some of cryptos most ardent supporters are (or perhaps "were" in the light of recent events) adamant that due to these digital asset being uncorrelated with traditional assets like stocks they are safe havens against the type of economic crash Covid-19 is wreaking on the markets.

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 to challenge mainstream alternatives.

It is now time to think differently. And laterally.

But we need to do it quickly, and as a community.

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 dtre of stablecoins to mitigate and hence 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.

The fact that stablecoins most notably Tether (USDT) is also a popular asset among crypto traders who want to place their funds in dollars during market downturns so they can avoid crypto price volatility really just reveals them to be a type of crypt that wants to have its proverbial cake and eat it too.

The problem with the stablecoin paradigm even though it seeks to maintain the free flow of capital and censorship resistance, which is laudableis that it is exclusively reliant on third-party factors and commodities, whether through value-pegging or collateralisation. 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, the concept of stablecoins is apartsolution but not thewholesolution to therealproblem 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.

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.

Many Bitcoin advocates have claimed that the digital asset belongs in this league too.

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

And that was before the unmitigated carnage of March 12, when Bitcoin lost more than 40% of its value...

As traders continue to rush for the door, dumping Bitcoin to raise much-needed cash, cryptocurrency in its current underdeveloped and over-hyped form is revealing itself to be little more than another financial asset.

But is This Really any Surprise?

It shouldn't be. Not to you and me. Not to anyone. Beyond the hype, Bitcoin (or any crypt) was never really anything elsebutan inflated financial asset; the issue is and always was that the promise of a safe haven implied by Bitcoin (and other crypts) was always the clue to its most egregious failing. Sure, Bitcoin (and other crypts) is not correlated to the financial markets but it is not correlated toanything(a feature that, as discussed, stablecoins are designed to overcome), hence leaving it open to its infamous volatility.

Then last month happened. Though Bitcoins price has jumped since, the 40% dip of March 12 was enough to reveal the crypts instability in the face of the type of crises it was supposed to be stabilising HODLersagainst.

So is Bitcoin not actually a safe haven after all? Maybe. Maybe not. (At least if you cant sell corn or livestock you and your family can eat 'em.) 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 Bitcoinisandis not.

Dec is What it is Not

It is the is not that our token, Dec, is specifically and unambiguously built as an antidoteto.

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.

As a result, Dec places every users financial future in their own hands through proactive online activity and participation while specifically not leaving asset acquisition and valuation to the vagaries of external factors over which users have zero control.

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