15 reasons cryptocurrencies should be avoided

15 reasons cryptocurrencies should be avoided

  • mdo  Admin
  •   Articles
  •   July 31, 2021

DIGICEN advocates against the use of cryptocurrencies for a variety of reasons. Below are 15 pitfalls of cryptoeconomics.

Cryptocurrencies are:

  1. A risk to your money and personal safety: keeping money in a wallet that isn't regulated or insured is a gamble and risk to take, some users even have private security personnel guarding them. Storing large sums of money in a software or hardware wallet without any state or bank insurance can take a toll on your own sense of security and wellbeing.

  2. Gambling-like: gamified apps are being created to make it incredibly easy and fun to get on board without knowing the larger implications. Users are then encouraged to keep a close eye on wild volatile swings.

  3. Cult-like or religious-like: the currencies are created not by governments, but instead individuals that become "leader-like" figures with devoted followers. Many devoted users then don "Laser-eyes" on their profile photos on social networks to signify their belief in the growth of their favorite currency as they compete against each other. Inside lingo is used to attract new users as well as dismiss necessary critical skepticism.

  4. Increasing wealth inequality:  The crypto networks develop their own form of wealth inequalities with "big players"/ "elites"/ "whales" that disrupt the market.

  5. Easy to abuse by despots or dictators: authoritarian despots may enforce monetary scarcity, potentially indefinitely.

  6. Attractive to scammers and ransomware: scammers guarantee that you’ll make money, promise big payouts, jobs, or free money, they make big claims without details or explanations and get fake celebrity endorsements.

  7. Destabilizing peace: the anonymity and decentralized nature of many crypto's has in the past encouraged violence to get the "vault keys" in order to gain access to wealth in crypto wallets, while some of these keys may be lost due to time, memory, faulty hardware, incorrect transactions, and entropy which may make the crypto scarcity far worse.

  8. Destabilizing networks: What may seem like a difficult to imagine cultural shift in money habits may become a rapid shift because as more people, networks, and developers jump on board that creates feedback loops.

  9. Corrupting: Encouraging the use of cryptocurrencies as an investment, is also encouraging the exploration and use of them as a replacement of existing financial and social systems.

  10. Zero-sum: aiming to be the singular global currency, by limiting the total amount of currency ever to be created, and distinctly missing from the blockchain hard-codes are fail-safes and social protections that older economic systems have, such as the ability to appropriate public funds for critical public services. With increased money scarcity comes conflict and discrimination.

  11. Subversive: making existing governance platforms irrelevant by replacing existing institutions with platforms called DAOs, and "Decentralized Finance" (DeFi) in both software, hardware, and at the point of sale.

  12. Anti-regulation: crypto is designed to evade regulation through decentralization by setting up networks in deregulated areas throughout the world (or even in space on satellites).

  13. Tax dodging: some crypto encourages tax avoidance with money tumblers and obscuring transactions completely. This encourages money laundering, theft, and other illegal activities.

  14. A Privacy risk: The service providers who offer to exchange your money for cryptocurrency (or give it back) may be unscrupulous and sell your private information.

  15. Not insured: When sending money it is very easy to make a mistake and there is no way to reverse a transaction. It is very easy to lose access to your software or hardware wallet which may be uncertified or contain malware.

Thinking about investing in crypto? Read this before you invest in crypto. These are the reasons DIGICEN advocates against using cryptocurrencies, and instead advocates for Central Bank Digital Currencies. See if there is a CBDC in your part of the world. Make the right financial choice for yourself and others by supporting the implementation of CBDCs. The Central Bank Digital Currencies that DIGICEN advocates for are not cryptocurrencies and do not use blockchain. What are CBDCs? Central Bank Digital Currencies (CBDCs) are types of digital money that is issued by a central bank. A CBDC complements the use of cash and bank deposits rather than replacing them. Safe money accounts at the central banks will be a strong instrument of financial inclusion with the convenience of a smartphone app. The Digital Currency Empowerment Network (DIGICEN.ORG) works to advocate for Digital Economic Inclusion through Universal Basic Income, CBDCs, Digital Literacy, Internet Access, and Democracy Tech. Learn more about Digital Economic Inclusion.

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