Vibhu Norby, the CEO of DRiP, expressed in a recent presentation that blockchain technology curtails speculation thanks to its transparency and swift information dissemination.
At Solana Breakpoint, Norby demonstrated his point using a simple prop, a bag containing a purple wig, to show how awareness of the contents removes speculation.
He likened this openness to blockchain technology, where all participants access the same information.
“A blockchain is a system where everybody knows all of the information at all times. It’s very hard to argue that there isn’t speculation happening, because, again, anyone can speculate on anything at any time.”
Vibhu Norby
Norby highlighted that speculation often occurs when individuals do not fully comprehend a situation. In traditional markets, investors frequently estimate asset values based on limited information.
Conversely, blockchain functions differently — the visibility of every transaction on a public ledger significantly reduces the necessity for speculation.
Blockchain speculation
To expand on his argument, Norby discussed the idea of loans within blockchain and DeFi.
In conventional lending, loans frequently rely on credit scores and ambiguous valuations, creating opportunities for speculation. Conversely, on-chain lending necessitates full collateralization — signifying that the loan is entirely supported by the asset’s value, which is openly visible and verifiable.
This, according to Norby, diminishes speculation substantially.
While the swift fluctuations in token prices may seem speculative, Norby clarified that this merely reflects the market rapidly assessing the actual value of tokens. He proposed that faster blockchains like Solana (SOL) further reduce speculation by allowing nearly instant price discovery.
According to Norby, many tokens swiftly depreciate because the market quickly recognizes their fundamental lack of value. Although speculation can never be entirely eradicated, Norby argues that blockchain’s transparency and velocity intrinsically render it anti-speculative.
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