After briefly flirting with trading cryptocurrencies themselves, Goldman Sachs has now seen the light and is saying that most cryptocurrencies are heading to zero, according to this article. Goldman’s assessment is mostly right.
All of the cryptocurrencies that rely on clunky “proof of work” to validate their blockchains, such as bitcoin, are heading for the scrap heap. They are too slow, too cumbersome and too expensive to compete with Visa, MasterCard and PayPal in the payments space.
The only use case for bitcoin is to support criminal transactions, and even criminals are moving to monero and spectrecoin because they have better security and privacy features. The same criticism about slow processing times and other inefficiencies also applies to popular crypto coins such as ether and ripple. However, some coins will survive.
The survivors will have two characteristics. The first is an efficient governance scheme for blockchain validation such as the so-called byzantine agreement. The second is a use case supported by real enterprises or governments such as payment remittances or international bank settlements.
And Goldman admits that blockchain technology itself has a future, but caution is indicated because processing speeds are still not as fast as existing systems.
The bottom line is don’t invest in crytocoins (with a few exceptions), but invest in blockchain technology instead.