Crypto’s transparency and speed diminish any speculation

DRiP CEO Vibhu Norby, in a recent speech, suggested that blockchain technology reduces speculation due to its transparency and rapid flow of information.

Speaking to an audience at Solana Breakpoint, Norby demonstrated that by using a simple accessory like a bag with a purple wig, knowing the contents of the bag eliminates speculation.

He likened this transparency to blockchain technology, where all participants have access to the same information.

“Blockchain is a system where everybody knows all the information at all times. It’s very difficult to argue that there’s no speculation, because again, anybody can speculate about anything at any time.”

Vibhu Norby

Norby noted that speculation occurs when people do not fully understand a situation. In traditional markets, investors often estimate the value of assets based on incomplete information.

But Blockchain works differently; it limits the need for speculation by ensuring that every transaction is visible on a public ledger.

Blockchain speculation

To further his argument, Norby explained in detail the concept of credit in blockchain and DeFi.

In traditional lending, loans are often based on credit and uncertain valuations, leaving room for speculation. On-chain lending, on the other hand, requires full collateral, meaning the loan is fully backed by the public and verifiable value of the asset.

Norby argued that this makes it much less speculative.

While it may seem speculative that token prices are rising and falling rapidly, Norby explained that this is simply the market quickly discovering the true value of the tokens. He suggested that faster blockchains like Solana (SOL) provide near-instant price discovery, further reducing speculation.

According to Norby, many tokens lose value quickly because the market quickly determines the underlying value is lacking. While speculation can never be completely eliminated, Norby believes that the transparency and speed of blockchain make it inherently anti-speculative.