During a dark Crypto winter the stark truth becomes starker. Crypto coins are not all the same: some have utility. Some do not.

Even if the utility is a favoured gambler status (for example the practically worthless Shiba Inu coin – currently worth $0.00000810 which is not very much. You can hold 1,000,000 of these ‘coins’ for eight bucks? Surely it will recover! It was once worth £0.0000813 which is over ten times as much! Yikes. That coin can not even move much value without a digital wheelbarrow. You do not need to spend half your time counting zeros.

Then there are cryptos that have utility, purpose and objectives. Is 2023 the year of crypto value? We have the painful adjustment of inflation reducing the value of everything as the price goes up, and the ability to make money is restrained. You buy a crypto for ten bucks now, it may be worth ten bucks in the future but ten bucks is not. The measuring stick itself is slippery.

Real value crypto will be discovered is a hedge against inflation. As people work out their money buys less, the price of crypto should rise like a tide. Why doesn’t this happen?

There is less money to stretch over investments, is conventional logic. But are we getting the crypto market wrong thinking it is an investment like the share market? Is it not brilliant that profound value can be found right now at a terrifying discount?

The coins to watch are the ones that can be used to transfer value, i.e. as money. They are not investments in assets, the same as NFTs are not artworks but merely certificates of ownership of the underlying asset and for that they are brilliant. You can buy my artwork with a recorded licence which accords you the right to print a large edition and hang it on your wall. Sure. But the NFT for $1.2m deal is based around traditional art concepts of rarity and exclusion. Rather than a public celebration and recognition of brilliance. It is like claiming you have the best shop because you can buy better advertising. The authors of seventeenth century advertising jingles are not remembered like we remember the experimental artist of his day, Mozart.

There will be a point of realisation. The SEC may decide that XRP is a Security because of the massive distribution to originators. The same distribution is not present in every coin and if at the same time the SEC rules that other coins are simply currencies I believe it may signal a new era, where ADA becomes a useful currency alongside Solana, Matic and Etherium. And the price of Bitcoin becomes unlatched from the rest of the market. This is not a financial projection and certainly not financial advice. It is more of a philosophical observation: the way Crypto has been treated is a clumsy inaccurate FOMO first stage, the second phase of Crypto will be the Utility phase, where we work out real world uses, the obvious one being an exchanging currency in the hands of the populations of the world, outside of National borders or control. Well that breaks sanctions. How can that be avoided? Crypto is traceable so the CIA can find the financiers of war with a query. Crypto leaves indelible stains on the white collars of criminals. But it achieves more currency and ability to fund productivity than Government borrowing or printing currency can and by absorbing this vast pool of liquidity, it protects the economy from inflation. The fall of FTX caused deflation as quite a lot of liquidity was suddenly unreachable, therefore the economy effectively shrank. Substantial recovery of these billions back to the real economy may prove costly and probably largely impossible as they are not protected by the government or statute, therefore losses are merely that. This failure absorbs some of the excessive amounts of cash in the system. Isn’t that the point? If we invent funds based on little more than a clever algorithm and a even more clever logo, are we not buying pure risk? Is that not the very idea of a cryptocurrency: a notation of value only: by agreement. Investment of ADA, Etherium and Solana in markets of value like DeFi and NFTs only work if there is a market being fed. You can not continue to pay 9% interest to the subscribers of a DeFi account if that DeFi account is not earning at least 9% interest. Well, not for very long. Sound business models generally tend to work and replace others which were accepted and now seem expensive in time or capital.

In the new world, transactions are assumed to be continuous but the basis how each currently flows in and out of the economy at large would be a measure of their utility. Watch out for an ADA credit card (it already exists) when you buy ADA, and hold it, it increases at a rate greater than inflation because people want an asset that increases in value. There are enough little ADA to go around and create a long term growth path. Despite the heyday and the $64,000 level that Bitcoin has achieved, it prices itself above utility, into the store of large values like gold. You can hold it long enough for the value to increase but you do not want a crypto currency that fluctuates like a wounded gull. You want one that grows at or above the rate of inflation and that means a cheap start provided by the likes of ADA, XRP and Polygon, Atom and Algorand. That means that faster larger better Etherium is well placed to considered safe and more interesting than its giant predecessor, the venerable Bitcoin.

There is value and protection using The Blockchain vs banks. For example, political donations will become traceable and the use of cash will become questionable as they allow themselves to be an anonymous cover for crime. The real point being the only way to an honest financial system is one which is not subject to corruption. Until that fine dawn, many uses for small value coins will become obvious. Your wealth will be safer with certain coins that maintain a slowly growing value. That is why the winter has been good for major cryptos long term prospects, it brought prices down to where they can rise.

The very value of how we have valued them will deteriorate – the relationship between Crypto and national currencies need to blur for the value of Crypto to be realised. And it is inevitable, as Government currencies become more vulnerable to inflation and like Bonds, they can absorb currency that the Government can forget about and reuse without inflation. It increases productivity by increasing activity. It seems logical this will be a path Governments will favour going into the future. Governments adopting Crypto may find it useful but it is the population adopting them that will rescue the international economy from the distortions centralised banks impose. Liquidic freedom will even things out, it will have to, as work itself becomes a cost to the economy instead of a reliable source of taxes. Automation means more businesses. It does not necessarily mean less jobs, it may become the main source of economic growth. Small business is having a revolution as individuals can now achieve the same marketability as major corporations.