The developed world seems split down the middle about cryptocurrency. One half thinks it’s nothing to take seriously, while the other half is taking it very seriously. I personally lean toward the “this is stupid” half, but I’m not completely on their side. I’ll explain my position…
Put simply, cryptocurrency is an all-digital currency that needs to be mined. Basically think of dollars that you have to find within a computer. Each “coin” contains a number, and to get that coin, you basically need to guess that number, and that number is anywhere between 1 and infinity. That’s why mining requires vast, vast server farms that suck up an excessive amount of energy … just to be able to guess the right number each coin a certain cryptocurrency has.
Anyone can make these cryptocurrencies, anyone can assign these coins any identifying number they want.
It’s even less valuable than Monopoly money, because at least Monopoly money is a physical object made of a real material. Crypto is just … in essence … a giant game of trying to guess the names of files in someone’s laptop, and then selling those files after you find them.
Literally the only value any cryptocurrency has, from Bitcoin to Dogecoin to CumRocket (yes, that’s a real crypto), is the value people think it has. And the unfortunate thing about human beings is … that’s how anything has value. The difference between crypto and, well, anything else, is that most things in the world actually derive from some level of scarcity. Like I said about Monopoly money, which is useless: At least it’s made of paper, and paper is a real substance that has some degree of true value to mankind.
With crypto, it’s literally all in your head. 100% of the value of Bitcoin comes from the value people think it has.
So, does this mean the mere existence of crypto is a complete waste of time? Not entirely. There’s a chance (emphasis on the word “chance”) that it’s not even close to pointless. There are some positives. For starters, cryptocurrency is (currently) decentralized, meaning no one person or organization can snap their fingers and make the currency more valuable or less. Crypto also operates with a public ledger, which verifies every transaction made with it, thus making counterfeiting any cryptocurrency nearly impossible to get away with.
Something people don’t often think about: Crypto is a good alternative if your country’s actual, real-life currency hyperinflates. I once heard of people in Venezuela resorting to crypto because their own currency had become worthless. So, that’s probably the biggest plus to crypto: The mere fact it’s an alternative currency that millions of people use.
Then again, all the benefits of crypto can equally be argued to be detriments. For example, since crypto is decentralized, it is hyper-volatile, meaning its value can skyrocket one day and then plummet to near valuelessness the next day. Imagine going to the store and watching the prices of every product get changed literally every second. You can actually watch the value of any “coin” go up and down in real time with a simple Google search. At least my grocery store prices only go up by a few cents every few months. Point is: Crypto’s value, regardless of which coin you use, is extremely unstable.
To be fair and nuanced regarding the problems people have with crypto, almost none of the gripes people have with it are anything new to us. After all, real money also gets conjured into existence out of thin air, and also only has value that people think it has. We all use various kinds of currencies throughout our lives, anyway, even if they’re not strictly alternate currencies, such as in-store credit or gift cards. We also various actual currencies in real life, such as dollars or pounds or pesos or euros. And when it comes to value, if you’ve ever purchased anything in your life, then that’s because you thought that item’s value was acceptable to what you ended up paying for it. If you think an item is overpriced, then that item has less value to you.
Bottom line is: Of all the things that make cryptocurrencies what they are, each one of those elements have always existed in our country and our world. From the creating currencies out of thin air, to random factors inflating or deflating the currency, we’ve all seen all of this before.
Where I land is on the side that crypto is more ridiculous than it is useful. But do I know for a fact whether it should be embraced or mocked? No.
In the end, neither side is entirely correct about the subject.