Ten Reasons Why People Love Cryptocurrency

Bitcoin, Ethereum, ICO’s.. it seems these days everyone is talking about this new thing called cryptocurrency. Some are for, some against, and some are undecided, listening to the different arguments.

I started in the ‘undecided’ category, and have been interested in understanding the reasons why a lot of people – including smart and successful people I am acquainted with – are active evangelists for the cryptocurrency.

I see ten underlying views or motivations for this support of the cryptocurrency phenomenon.

1. Fact-Based Research and Analysis

There are those who are confident, based on their objective research and analysis of the initial material (as opposed to reading the opinions of others) that cryptocurrency is the way of the future.

This involves those who receive fundamental flaws in state-backed authorization currencies, through to those who are sure the concept of peer-to-peer deals, supported by the securely given creation of blockchain, is a natural (and welcome) growth of digital technology, ordering control in the hands of the self rather than central banks, governments, and the secured transactional banking method.

I don’t know what proportion of cryptocurrency advocates constitute this group – 100% of such advocates would claim to be in this category, but I am confident that is not the case, and a significant proportion fit into one of the remaining nine groups.

2.Believers and Hopers

This group, I suspect, makes up most of the individuals that outwardly think they are on the first team. These are people who have become adherents to cryptocurrency based on the arguments and persuasion of others – often what whom we saw as ‘experts.’
As a result, while thinking they have come to their conclusion themselves based on facts and objective analysis, this group are depending on belief and hope that what they said is correct, rather than what they reached their position on their own.

3.Charlatans and Criminals

There are two types of unsavory characters that support cryptocurrency because it is of benefit to them.

The first are those who see the path to riches in the development of their cryptocurrency where people have to pay in ‘real money’ to buy into the digital currency. A classic case of this would be the ‘OneCoin’ operation which has widely been identified as fraudulent and yet still hoovers in money and converts providing untold riches for its founder. Proponents of these schemes are little more than charlatans presiding over a classic pyramid scheme, and the nature of such plans is that they inevitably unravel leaving misery in their wake, while the promoters either live out their dreams on the beaches of the world or rub shoulders with Bernie Madoff for several decades.

The second group is the more traditional criminal classes who see the anonymity of cryptocurrency the perfect answer to laundering the proceeds of illicit activities or avoiding awkward questions posed under the taxation, money laundering and anti-terrorist funding laws imposed by various countries.

4. Arbitrage Takers

The concept of arbitrage is to profit from the sale and purchase of an asset. The trick here is that to profit from the trade it’s not necessary to hold or possess the asset – if all you are doing is acting as the middle person between a buyer and a seller.

That’s like, for example, finding someone who is selling a tonne of wheat and matching that up with someone who wants to buy a tonne of grain at a higher price; making the transaction on the same day and pocketing the difference. There’s no need for the middleman to own the grain at any stage. In fact, the middleman might be gluten intolerant and hate what – it doesn’t matter! And image how much easier it would be if the grain was ‘virtual’ and didn’t need anything more than a mouse click for its transfer.

Of course, to be a successful arbitrage trader in any commodity, you would need to project the image that you were a real believer, as this adds credibility and assists trading volumes.

How many cryptocurrency advocates are appearing to be invested in the future of the concept, but are in fact merely clipping the ticket on trades?

5. Wildebeests

Wildebeest are those African animals that like to move in a considerable herd – often seen on TV as a mad, unstoppable stampede.

How this translates into this group of cryptocurrency advocates is on the human character trait called ‘FOMO’ (Fear Of Missing Out) which drives people to think ‘everyone else is doing it, so I’d better do it.’

Reason or analysis doesn’t count in these cases – it’s a simple, gut reaction to join the herd.

6. Musical Chair Players

This group isn’t believers, but as long as there is the prospect of making money, they will go along with the concept enough to make a profit, but not sufficient to take undue risks, or risk being left without a chair to sit on when the music stops.

How this works in the world of cryptocurrency requires a degree of cynicism because the only way to ensure this happens (i.e., you can make some money but not get caught if things go belly-up) is to appear to be a committed advocate and keep talking up the market.

7. Astronauts

Astronauts have experienced what things are like in space, where there is no gravity.

But for the 99.9999% of us that have or will never go into space, the realities of gravity are ever-present, and we know that everything that goes up will come down, and we would be fooling ourselves (or risking a nasty surprise) if we were to think otherwise.

Cryptocurrency astronauts think that things will only go up – or if there are minor corrections, the trend will always be upwards.

8. Intangible Tangibles

Many people find it challenging to Difference between tangible and intangible assets – because in both cases the ‘market value’ may have little to do with the ‘utility value’ of the asset. However put simply, a tangible asset is something ‘real’ that can perform a function that has value, whereas an ‘intangible’ asset is based on nothing substantial (or of minimal value), and is related purely to sentiment.

Intangible assets depend entirely on there being a demand of people willing to place a value on the asset. Cryptocurrency is as elusive as it’s possible to get even a limited edition car number plate is worth a few cents for its metal!

Some cryptocurrency proponents overlook the fact that there is nothing except the willingness of the next buyer to exchange some tangible value that supports the cryptocurrency, and if that was to evaporate there’s nothing left. Nada. At least in a property collapse, you can help a goat or if gold was to lose its value fill your teeth.

9. Blockchain Believers

Blockchain as technology and concept and its benefits are a reality that is likely to produce a great deal of future change (hopefully mainly beneficial) and is accepted to be a valid part of the 21st Century’s technological future.

However while cryptocurrency relies on blockchain as a technology, blockchain does not equal cryptocurrency or vice versa. Should cryptocurrency vanish overnight, blockchain would continue to be a necessary future technology.

How many cryptocurrency converts have misplaced their confidence in blockchain with the assumption that cryptocurrency is the same thing?

10. Intellectually Challenged

Last, but not least, is the unknown sized group of cryptocurrency advocates who are very smooth not very smart.
Don’t be alarmed – if you are in this group you won’t be aware of it owing to the Dunning-Kruger Effect (Google it). Oh, and while you are surfing the web, check out ‘tulip bulbs.’ I hear that’s where the smart bitcoin is heading these days.

11. No need for the middleman:
Banks provide security in the sense that you know where your money is going, and you put your trust in your bank that your money will arrive at the right place as soon as possible. However, you can’t see the process that goes on inside a bank; you are blind in your transactions, and you play a waiting game as to when those deals will clear.

Blockchain eliminates the need for this middleman. You can send your ‘digital money’ from your ‘virtual wallet’ to the receiving party’s ‘virtual wallet’ via a set of keys, which resemble addresses – or to put it into our current banking language. Our sort code and account number are the Public keys that we share with people on the Blockchain.

If I wanted to send my friend 10 Bitcoin in Australia, he would just have to send me his Public address for his Bitcoin wallet, and I can send the Bitcoin from my address (account) to his, without weeks of delays. Blockchain transactions are all recorded on a digital ledger, available for anyone to view at any time. Blockchain technology projects your transaction to the entire network, and everyone on the web can verify where, when and who you sent your purchase too. This will dramatically reduce fraud and puts the trust in the hands of the technology, not the banks.

I hope you can see why banks are dramatically inefficient, and unless they adapt to Blockchain technology, they will die.

Thanks for reading this post.

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