It might feel like conversations about cryptocurrencies are inescapable. Whether it is your little brother, your manager or your college roommate, it seems like everyone has started investing in the blockchain and the world of crypto. However, with this much hype, there is always a tendency to “second guess” the enthusiasm. Humans are naturally skeptical and the crypto craze seems almost too good to be true. Let’s spend some time discussing its current form.
Legitimacy
One of the biggest hurdles that cryptocurrencies have had to overcome is that people struggle to understand why they should take their money out of stable, traditional banking systems and instead secure it in the blockchain. This is understandable, especially if you are not part of the internet generation. However, the blockchain and those currencies built on it, such as Tether, Dogecoin, Bitcoin and Terra, are all legitimate.
While it might seem like those who invest are overzealous, their enthusiasm must be forgiven. The blockchain is a marvel of human engineering, providing a resource to transparently record and access records of transactions while simultaneously rewarding those who support and enable the blockchain with new coins. It achieves all of this while being exceptionally secure, self-policing against those who try and alter the record or undermine the system.
Although the technology might at first be hard to understand – mainly because of the tendencies of those who invest – there are thousands of educational resources online that you can use to teach yourself about the world. It’s hard to wrap your head around the intricate web, but with a little bit of effort, the world opens up.
Because of the assurances provided by blockchain technology, it is unsurprising that crypto has entered the mainstream with a vengeance.
It is mainstream
When crypto first registered on most people’s radars, it was considered the preferred currency for anti-establishment investors who had become disillusioned with the current banking standards of the world. As currencies like Dogecoin and Bitcoin were emerging on the market in the early 2010s, many thought that they would be a short-lived fad. Today, those who doubted regret their decision, as multiple industries have begun accepting cryptocurrencies as payment. These industries include everything from the motor industry to online casinos and gambling.
A whole industry has also developed around providing data to investors. Multiple platforms have been built to track market trends and prices, while others provide a space to trade, sell and buy every type of coin under the sun.
This adoption by the mainstream means that chatter about alt-coins, such as Dogecoin, or stablecoins like Tether, is not full of fluff. Rather, it is far more likely that you know someone who has invested.
Diversity of investment and innovation
One of the most appealing parts of the crypto industry is the ability to easily diversify your portfolio with little upfront cost. There are hundreds of coins, with diverse uses, market values, missions and design models. Every investor is able to decide exactly how they want to spend their money and what companies they want to support. This autonomy is one of the core reasons why crypto investing is not a craze – it is a legitimate investment option.
As people become accustomed to the world of cryptocurrency, some amazing innovations have been made, including NFTs and Smart Contracts. Both of these inventions only existed in theory not too long ago and they are now being utilized by some of the biggest celebrities on the planet.
Knowledge of problems
One of the most endearing qualities of the crypto craze is its awareness of problems and dedication to addressing them. These obstacles take many forms. One example is the environmental impact of mining the blockchain. The carbon impact of cryptocurrencies is of major concern as thousands of computers must work constantly to transmit, process and record the transactions on the blockchain. However, because the industry is so self-aware, there are multiple different solutions being offered to combat this – such as crypto staking.
Another concern for the industry is that the decentralized system means that there are few courses of action if someone is scammed or loses access to their accounts. However, efforts are being made to educate people on ways to secure their accounts, with functions like two-factor authentication and how to identify when a website cannot be trusted.
While it might feel as if cryptocurrencies are just another internet fad, for all the reasons outlined above, it seems like they are with us for the long haul!