As a seasoned crypto investor with battle scars from the 2017 bull run and 2018 bear market, I wholeheartedly agree with Vibhu Norby’s perspective on blockchain technology reducing speculation. The transparency and rapid information flow inherent in this technology have been a breath of fresh air for me, eliminating the guessing games that were all too common in traditional markets.
Vibhu Norby, CEO of DRiP, suggested in a recent talk that blockchain technology reduces speculation due to its transparency and rapid information flow.
At Solana Breakpoint, Norby demonstrated the concept of eliminating speculation by using a straightforward visual aid: a bag containing a purple wig.
He compared this transparency to blockchain technology technology, where all participants have access to the same information.
A blockchain is a decentralized system where everyone has access to all the data simultaneously. This makes it challenging to deny that speculation occurs frequently since individuals are always free to speculate about any topic or subject at any given moment.
Vibhu Norby
Norby noted that uncertainty or speculation can occur when individuals lack a comprehensive grasp of a given scenario. Typically, traders in established markets tend to make assumptions about asset values due to insufficient data.
Instead of operating secretively like many other systems, blockchain ensures transparency by recording each transaction on a shared, public record (a ledger), minimizing the necessity for guesswork or speculation.
Blockchain speculation
To further his point, Norby elaborated on the concept of loans in blockchain and DeFi.
As a researcher delving into the world of lending, I’ve noticed a stark contrast between traditional methods and the innovative approach of on-chain lending. In conventional lending, loans are frequently granted based on credit scores and vague appraisals, allowing for speculation to thrive. However, in the realm of on-chain lending, each loan is fully collateralized – this means that the value of the asset securing the loan is not only publicly accessible but also verifiable by anyone. This transparency brings a level of certainty and reliability that traditional lending often lacks.
This, Norby argued, makes it much less speculative.
While the rapid rise and fall of token prices may appear speculative, Norby explained that this is simply the market quickly discovering the real value of tokens. He suggested that faster blockchains like Solana (SOL) reduce speculation even further by enabling nearly instantaneous price discovery.
As Norby states, numerous tokens quickly depreciate in value due to the market swiftly recognizing their insufficient intrinsic worth. While speculation cannot be completely eradicated, Norby contends that blockchain’s inherent transparency and speed make it fundamentally resistant to speculative activities.
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2024-09-25 22:24