Back during the early days of the web, I remember numerous people saying that the web was a fad, a niche for nerds, and nothing would replace traditional commerce, traditional business.
We know that didn't turn out the way they thought (hoped?) but history repeats and today lots of people are very loudly telling others that the whole of crypto is a scam and a VERY BAD THING.
Why? What is going on that is causing people, otherwise very smart people, to find this so challenging?
Crypto Bad but Wall Street ... Good?
There's a shared delusion that how things are right now is somehow due to merit and justice. Nothing could be further from the truth.
I keep seeing this sentiment, and it is almost always from people who invest in paper (stocks/shares/whatever).
Our society will try to convince you that paper investments are investing in productivity but that is not at all the case!
Wall Street exists to enrich shareholders at the expense of society as a whole and the long-term health of companies and their employees. They hire lobbyists to ensure that consumer-friendly laws aren’t enacted and TV talking heads pump up stocks.
Consider the right to repair movement. All we want is to be allowed to mend what we buy instead of throwing it away. Farmers want to be allowed to fix their tractor instead of paying exorbitant fees to John Deere to be allowed to open it up. Investing in the companies that do this is not contributing to the common good but encouraging rent-seeking.
Numerous times companies have done very, very bad things - it's not just car manufacturers deciding that paying out compensation was cheaper than making their vehicles safe, we are talking pollution, poisons, bribes, corruption. Heck, two words; banana republic.
How many wonderful companies have been pounced upon by vultures then strip-mined for value before being dumped? Companies with great long-term futures were destroyed for short-term profit.
When they say it will never work
Remember back before the web took off how many big-brained people said it would never work?
Experts told the Wright Brothers that flight was impossible.
Anyone invested in the status quo can’t face anything changing it.
You can tell when you have touched a nerve when someone is super defensive and not keeping calm. Why are they so angry? There is a meta-conversation going on that is making that person feel really uncomfortable.
They don't have the same reaction to the fake value of diamonds and the proven borderline criminal cartel behind the inflated value of shiny rocks.
Sometimes they have a point
JPG apes are bad, I have to agree there. Bad art, bad investment, and not even very good technology.
We are told that NFTs allow us to own digital assets.
If the ape theft and subsequent disabling of those stolen apes has shown us anything, it is that the "ownership" side has been vastly exaggerated.
Yes, the apes were phished rather than literally stolen, but ownership was transferred from the owner to a grifter.
It doesn't matter how the ownership was transferred, really. The theft proves that provenance is NOT a feature of NFTs, and you don’t really own something if someone can decide that you in fact can’t use your asset.
Time and again we see NFTs sold where the seller didn't have any rights to the art (just google Deviantart and NFT), and the people who are buying are trusting that they are not participating in a crime.
Even legitimate sales don't really mean squat - you own a receipt with an attached URL or some bytes that represent an image. You don't inherently get any guaranteed rights.
Twitter or Discord don't have to allow you to use it as your avatar, OpenSea doesn't have to allow you to trade it, and if someone copies and pastes it as their own avatar you don't have any intrinsic way to enforce your rights.
Right now if you buy an NFT game asset they can still disable your asset in the game or the game can close down. If you truly owned it then you would be able to take it with you, but you have as much ownership as a dodgy timeshare sold to you by a guy in the pub. Remember when Zune owners lost all the music they "owned" when the service ended?
What the ape-haters don't understand is that NFTs can be much more than badly drawn avatars!
Smart contracts can confer so much more than just the right to some pixels. Already we have communities being built around the NFT being a membership card. Like a golden ticket where the ticket owner gets tangible, valuable benefits.
Rather than focus on ugly pixelated "art" and digital kittens, and the hope of finding a bigger sucker willing to buy them off of you, we can build actual utility and value.
We are just at the beginning
Remember though the early days of anything new are rough.
People keep mentioning how much energy is being used for crypto. Fact is, yes, a lot of energy is being used but that is changing. The traditional banking and finance industry uses a lot of energy but we don't see people complaining about that. Plus, we know the Oil and Gas industry has worked against making energy cleaner and cheaper so it is a kind of disingenuous argument anyway.
Things aren't perfect, there is no doubt about that, but no new paradigm is ever perfect. Waiting for perfection is a losing game.
Keep in mind if you are on the fence about everything it IS actually ok to find yourself late to the party, too.
Just keep in mind that being late to the party means you don’t get your choice of seats.
Posted Using LeoFinance Beta
Whenever I meet someone who tells me that crypto is a scam, akin to gambling, or that it isn't backed by anything, I ask them: what is fiat currency backed by? After some hemming and hawing, the answer they usually arrive at is "faith," the same as stock prices. As long as the market has faith in the token, it has value. Fundamentally, there is no difference between cryptocurrency and fiat currency or stocks, at least when it comes to value. What sets crypto apart from the other two is that it isn't controlled by a central bank or analogous entity. Crypto is also new, and people who are set in their ways financially will continue to find different ways to dismiss it, simply because it doesn't have a decades-old institution behind it. No reputation, no faith. Faith is a funny thing.
A stock represents a percent ownership in a company so it is backed by whatever physical assets the company owns along with the net income it produces. Stocks valued much higher than those things are a real gamble. A gamble that the company is really going to be worth more in the future. Many stocks are way overvalued but they are backed by more than "faith" (usually).
Dollars and most fiat currencies are backed by taxes. You must pay your taxes in fiat. Whether that's enough to really support the value it has is another question. Heck, by law every crypto transaction results in demand for USD to pay taxes. Other than that, yes, it is pure faith.
With cryptocurrency, it really varies. Some of it is purely faith (bitcoin for example). Other blockchains have real applications built on them that have value based on the demand for those services. However, separating actual value from speculation can be almost impossible. (Most) crypto isn't a scam but it is quite speculative.
Yep, the same people think their pension is safe, their employer is loyal “like family” etc
I think the popularity of Bitcoin has really damaged the perception of crypto. Also the “currency” idea. Packaged as a technology (“web3”) instead of a speculative asset makes the idea of crypto much more palatable.
That said, many on Wall Street do have a point. Too many cryptos today have no real utility so they do fit the negative stereotypes and probably will get wiped out, making them good to avoid for the average investor.
With more use cases and innovation on the chains, the winners should become less speculative and more in-line with traditional investments, though we may be a little while away from that.