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My Thoughts on Cryptocurrency

Updated: Apr 29, 2021


If you haven't heard of cryptocurrency, then it is just another example of societies failure to financially educate people. Just kidding, but whether you know about crypto or not, it is quickly becoming more popular. Bitcoin, a type of cryptocurrency, is considered the oldest form and has been growing exponentially. Lets take a deeper dive into cryptocurrency to see whether you should be paying attention to cryptocurrency in the first place.


What is Cryptocurrency?


Cryptocurrency is defined as decentralized digital money, based on blockchain technology according to Forbes. There's already a couple of words that are unfamiliar, at least they were to me when I first heard of cryptocurrency. These words are decentralized and blockchain. Decentralized means equality. In other words cryptocurrency is a form of currency that anyone can use and can not be controlled by one nation. Blockchain is a database where data is stored on a database and it helps to exchange cryptocurrency. So in conclusion, cryptocurrency is aiming to become a equal form of currency.


How is Cryptocurrency already a big thing?


While approximately 90% of American's have not bought crypto, cryptocurrency is already becoming the new form of currency. There are at least 3 examples of the growing presence of crypto.

  1. The first example of cryptocurrency being a more popular form of currency is in various countries that have already implemented crypto as a form of currency. Countries such as America, China, and Japan have already been incorporating Bitcoin, just one o many types of crypto, onto their balance sheets.

  2. Companies like Tesla have also incorporated cryptocurrency into their business plans by allowing customers to buy goods in exchange for Bitcoin.

  3. The last example of crypto being a big form of currency is through apps such as Paypal and CashApp that allow their customers to invest in crypto. This in turn causes people to have the opportunity to cash out their profits and therefore allows the government to tax the profits similar to selling stocks or a house.

If this does not convince you that crypto is having a much bigger presence in our lives then I don't know what else I can say. Now it is just a matter of expansion. Right now cryptocurrency is in the early stages of its life, even though its been around for 12 years, which means that there is a lot of growth. The part that sold me the most on cryptocurrency becoming a popular form of currency was when I heard that other countries are investing in Bitcoin like they do with precious metals. Not only have countries been adding cryptocurrency to their balance sheets but more and more large companies are too. As more companies use Bitcoin to diversify, Bitcoin will grow even more.


Opposing Side of Cryptocurrency

For those of you skeptical about cryptocurrency becoming more than just the latest trend, I guess I can highlight a few of the biggest points made by people who despise crypto. These are lack of security in crypto, crypto being bad for the environment/energy waster, and crypto has no future since there is no value. Now lets dig deeper into these reasons so I can rip apart each one :)


1.Security



This is perhaps the biggest argument opponents make when making the case against crypto and it is invalid since everything can be hacked into and stolen. Digital wallets that banks provide so you don't have to carry cash is no different then having a crypto wallet that stores your crypto. Now at this point someone may argue that banks have insurance and you are able to be insured up to 250k by the FDIC if the bank goes bankrupt, but the same is also done for crypto as well. In fact the most popular crypto wallet/investing company Coinbase is also FDIC insured. I find this concern to be outdated since security is an everything problem and to make the argument that you should not invest in crypto due to security reasons is a weak argument. The same could be said for anything. For example a person could argue you should not invest in the stock market because your brokerage account could be hacked into and your money could be stolen. Everything can be hacked into. In fact a popular YouTuber had his families house, car, phones, and more hacked into and the people on the other end took over the whole house by turning on and off lights, the car, fridge, furnace (because the hack happened in the middle of winter in Ohio), etc. But despite all of that, millions of people still use technology on a daily basis. And just like banks, brokerage firms, and many others, cryptocurrency is evolving and constantly improving its security measures.


2. Energy waster

Opponents also argue that crypto is an energy waster which is a terribly weak argument since mining for precious metals is just as much of a waste of energy and you need to create buildings to store gold whereas crypto is online. In addition, people who mine crypto mainly do so from home via a computer system which relies on electricity and as we all know electricity has been making the shift towards more sustainable electricity. This shift to sustainable electricity will mean that the negative effects of mining crypto will fade away whereas precious metals negative impacts will always exist. And yes I mean always. This is because in order to get gold you have to DIG into the earth and slowly deplete Earth of it's natural resources. Yes precious metals are naturally made... that's why they are precious since they are something man kind did not make and it is used to create goods.


3.Lack of value/crypto has no future

While some may argue that cryptos are worthless and other materials such as precious metals are better, I disagree. While crypto is digital that does not mean it does not have value. The main reason why crypto has value is due to supply and demand. If we look at Bitcoin one bitcoin costs over 55k. That may be way overvalued to some people for something that you can't even see but that doesn't change the fact that it has value. The reason why it is so expensive is due to basic laws of supply and demand. There is too little supply and far too much demand for Bitcoin, thus creating the price tag. And if crypto had no future then why are major banks such as JPMorgan beginning to invest in it??? If crypto had no future then why are other countries using crypto as a form of currency to BUY goods????? So yea, you can not tell me crypto does not have value or a future because the FUTURE is here! Crypto has so much room to grow and it is already proving its value in the financial world.


Another thing to note about these 3 concerns is that they are not new. Since crypto was first introduced in 2009, all 3 these concerns have existed and all these years crypto still is around. This proves the resiliency of crypto and is another reason why cryptocurrency is destined to be the next form of currency.


Concluding thoughts


As you know by now I am a strong supporter of cryptocurrency and its future which is why I have begun to slowly invest in crypto myself. And while I do not have thousands in crypto, I am definitely going to slowly be adding more funds to my account to diversify my investments more. When the major banks begin to incorporate crypto onto their balance sheets (which JPMorgan has already begun to invest in Bitcoin) and implement crypto services onto their product list, then crypto will be mainstream. But until then I believe we are seeing the beginning of the next wave of currency.


Thanks for reading and make sure to follow @thoughts_with_yilan or subscribe to stay up to date!


*Disclaimer: I am not a financial advisor and this is for entertainment purposes ONLY. Make sure to do your own research as this is just about what I have learned and my opinions.*

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