[Book Sip] From Bitcoin to 2nd Generation Cryptocurrencies: The 'Cryptocurrency Next Scenario'

Some sentences encapsulate the entire content of the book itself, while others instantly reach the reader's heart, creating a connection with the book. We excerpt and introduce such meaningful sentences from the book. - Editor's note

This book forecasts the future of first-generation cryptocurrencies such as Bitcoin and Ethereum. It also positions itself as a 'Future of Money Report' that provides insight into the big changes in future currency and financial systems. Assuming that everything in the world will be realized in the virtual world, it introduces how to understand and utilize digital currencies to secure future wealth.

Why is the volatility of first-generation cryptocurrencies, including Bitcoin, so high? It is because they have no intrinsic value and only possess future value. How is this future value created? First, it is the 'vision' that the company issuing the stock presents to investors. Second, it is the size of the network of people who believe in that 'vision.' In other words, it refers to how many people join the vision. Therefore, competition among cryptocurrencies not linked to physical assets ultimately boils down to a battle over who can create a larger network effect.

Bubbles occur twice according to the five stages of new industry development. The period we should pay attention to is the second bubble phase formed in stages 3 to 4 of the new industry. Companies that survive the collapse of the first bubble and those that newly emerge by improving the trial and error of the first bubble lead the second bubble phase. I call this the 'market bubble period.' This is likely to be the time when newly emerging second-generation cryptocurrencies or digital currencies are actively traded.

Historically, there have been countless speculative targets. The truth history tells us is this: 'The bubble price of all investment products eventually returns to their original asset value.' If the original asset value exists even slightly, survival is possible. But if the original asset value is completely absent, it disappears. Flower prices return to the original value of flowers, and commodities return to the original value of commodities. The same applies to Bitcoin.

Cryptocurrency Next Scenario | Written by Choi Yunsik | The Quest | 304 pages | 17,500 KRW

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