Bitcoin was first introduced to the public in 2009, and what once was a thing only nerdy weirdos interested in, now has a market cap of $775 billion.
Many people, especially the tech-savvy younger generation, such as the Millennials and Gen Z, have been partaking in this big ‘wave’ of the cryptocurrency boom since its first ‘peak’ in late 2017.
Thousands of new coins or tokens appeared out of nowhere and some of them are even backed by big institutions and famous personalities, and the rest, well, are unknown and a little bit shady.
And while it could be an actual thing in the future—and there are many reasons for it—I’m still not hyped about these ‘coins’. Specifically, not THAT hyped.
And here are my reasons.
1. It’s not being used as a mainstream form of payment yet.
Almost 13 years since its initial release, Bitcoin is still mostly treated as a commodity, something that people trade to make money.
Can you buy something using Bitcoin? Sure. But merchants that accept Bitcoin and other coins as a form of payment are in the minority, and when I said minority, I mean it.
In short, it’s not acting as a currency, yet.
2. There are no actual benefits for most people.
For most people, cryptocurrency in its current form is just money in a more complex way (at least that’s what they perceive).
Seriously, what are the improvements compared to our current financial system? Will it make you richer? Will it help you get out of debt?
For some people, like drug dealers and people who want to evade tax, yes, maybe the security and anonymity aspects of it will be the main selling points.
But for most people? I’m afraid there are no distinguishable differences between using our current form of money vs crypto.
3. The governments don’t want a currency they can’t track and seize.
I’m not a government, nor do I understand how governments think. But I got a feeling that they don’t want a currency so private and secure it can’t be tracked and seized.
I mean, if this crypto thing is adopted worldwide, many people will not pay taxes since they can’t trace and seize the money.
Unless, of course, there is some kind of coins that will allow them to track and seize it, but it will defeat the purpose of crypto, isn’t it?
4. It’s a digital entity without any real-life use.
Can you tell me what exactly a cryptocurrency is?
Is it some kind of file? Or maybe an app? Or is it just a note saying that you have money?
When, let’s say, you have ₿1 (that’s 1 Bitcoin or 1 BTC), what is exactly you’re having?
Some of you might be able to answer this technical question, but most people will google it and still not understand a single thing.
It’s a digital entity without any real-life use.
Gold and other metals (and stones) were used as a form of payment because they were actually useful in real life.
You can make weapons, jewelry, computer parts, and many things, including gold teeth. Historically, the traditional form of payments usually has real-life use!
Even paper money that is not backed by anything can be used to wipe your ass and folded into airplanes, and in Pablo Escobar’s case, to make her daughter warm.
5. Price manipulation is the name of the game.
There are a lot of people leaving comments like this on YouTube or Instagram comment section:
Crypto is proven to be the best investment for many years to come, buy crypto now before it’s too late.
Or something like that, I can’t remember the exact wording they used. But you get the point.
A lot of people and big players (maybe crypto brokers?) try to manipulate the crypto market (just like they did with the stock market) by getting more people to buy a particular cryptocurrency so the price will go up…and they can exit with big fat profits while the rest suffered a loss.
It’s called price manipulation or market manipulation, and these kinds of practices exist in the stock and other markets.
Hence why it is advisable to only invest in the already established coins like Bitcoin and Ethereum if you are still interested in riding this new ‘wave’.
That’s all folks! And if you think that those reasons would make me sure enough to never invest in cryptocurrencies, you’re wrong.
If those reasons above are proven to be wrong in the future, then I’ll surely jump onto the ocean and ride the crypto wave like everybody else.
Meanwhile, I’ll just buy a little bit of Bitcoin here and a little bit of Ethereum there and see what happens.