Cryptocurrency is all over the news lately. It seems like there are stories of young individuals striking the jackpot each week, but beneath the glitz are stories going unheard: of the countless investments that didn't pay off, or of the countless scams targeting would-be-investors, or the huge ransomware attacks that ask for payment in crypto tokens. Cryptocurrency may not be such a good investment, and here are some big reasons why:
The biggest reason is that they are a huge risk, in privacy, in security, and even in personal safety. While the currencies claim security and privacy, the service providers who offer to exchange your money for cryptocurrency (or give it back) can be highly unscrupulous and sell your private information. Is cryptocurrency safe? Cryptocurrencies are a risk to your money and personal safety, too. By 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.
While cryptocurrency is not illegal in some places, it technically isn't legalized or regulated either. It isn't insured or backed by official institutions. As crypto claims to be peer-to-peer, it is not considered legal tender by existing institutions. Is cryptocurrency legal? Not exactly. Is cryptocurrency safe to invest or a safe investment? Not really. When sending crypto it is very easy to make a mistake and there is no way to reverse a transaction, there is nobody there to return your tokens. It is very easy to lose access to your software or hardware wallet. These wallets (hardware and software) also pose a risk as they can be uncertified and can contain malware and spyware. Crypto is not considered real money by many national, state, and local institutions.
Besides those risks, there is the risk of scams and ransomware. Scammers guarantee that you’ll make earnings, promising big payouts, jobs, or free stuff, they make big claims without details or explanations and get fake celebrity endorsements, or they pretend to be celebrities themselves. Meanwhile, governments and institutions and even hospitals, yes hospitals are being held up by ransomware attacks that disable critical infrastructure, where crypto tokens are demanded as payment.
The second biggest reason investing in cryptocurrency may not be a good idea is, unbeknownst to would-be-investors, encouraging the use of cryptocurrencies as an investment is also encouraging the use of them as a replacement of existing financial and social systems. The goal of Decentralized Finance (DeFi) and DAO's (Decentralized Autonomous Organizations) is making existing governance platforms and existing financial institutions irrelevant by replacing them with crypto platforms and Decentralized Exchanges (DEX). Also unknown to would-be-investors is that all claims of technological innovation are solely for the benefit of the crypto networks, platforms, and exchanges themselves and those who have invested in them, not for existing institutions or existing economies. Is crypto really a digital currency if it doesn't interoperate with existing forms of legal digital currencies? Besides being corrosive to existing institutions, some crypto encourages tax avoidance with money tumblers and obscuring transactions completely. This encourages money laundering, theft, crimes, and other illegal activities.
As some big investors of the crypto Bitcoin claim that their token should be used as the world's primary form of money and that it would usher in world-peace, the reality is that the nature of many crypto tokens has in the past encouraged violent crimes to get the vault keys in order to gain access to crypto wallets. Other keys get lost due to time, memory, faulty hardware, incorrect transactions, malware, among other reasons, all compounding artificial scarcity. Many of the token economies are zero-sum, and by limiting the total amount of currency ever to be created they increase artificial scarcity leading to conflict and discrimination.
Despite all this, the idea of new types of digital currency and potential earnings and the fear of being left behind by new technology is enough to entice would-be-investors to jump into the crypto fray. Once there, they're introduced to thousands of often bizarre sounding tokens and global exchanges all competing against each other for an investors IRL money, without the new investor knowing the larger, destabilizing implications. Is cryptocurrency a form of gambling? Yes. New investors are encouraged to gamble on wild volatile swings in the value of their tokens and get used to the lingo, and become a devoted token coin follower. The "currencies" are created not by governments, but instead individuals (and developer groups that support them) that become "leader-like" figures with devoted social media followers. Many devoted investors then don "Laser-eyes" on their social media profile photos to signify their belief in the growth of their favorite token coin as they compete against each other. Inside lingo and the promise of lamborghinis is used to attract new investors as well as dismiss necessary critical skepticism.
Is cryptocurrency legit or legitimate? Overall, while it may claim to be a good investment with all its glitz and hype, cryptocurrency is really not a good investment for individuals or for larger society.
Tags: economy crypto cryptocurrency cryptocurrencies bitcoin digital currency digital wallet is cryptocurrency safe is cryptocurrency real decentralized finance defi dao dex decentralized exchanges security privacy finance investing investors exchange crypto wallet crypto key crime destabilization government zero-sum economics