It’s healthy to be sceptic about crypto. Economic bubbles, rug pulls, irresponsible exchanges, scams and disorganized government handling of crypto laws and regulation are a part of the crypto landscape. It’s a big mess and no place for the faint-hearted. But when will the general public believe in crypto?
We have given birth to something unique but it needs to grow up before we can expect the general public to take the crypto industry seriously. It is still a child and we need to be more lenient towards antics such as rug pulls, irresponsible exchanges and scams.
It is fair to say that blockchain technology have potential to grow into something fantastic and completely change our financial system. Crypto advocates are even saying that the entire banking system may get obsolete as middle men are not needed for economic transactions if blockchain technology grows up. Sayonara Mr. Bankman. But so far we are struggling parents who don’t know how to handle this young industry. No wonder people find the industry immature and unserious when it’s confusing to buy crypto and it takes a nerd to understand how a hot or cold digital wallet works. It’s nearly impossible to turn a crypto currency into a wrapped version and sending it to the correct address before being able to buy a certain token.
What’s more, before buying crypto we need to know where to go without getting scammed and we generally must go through a gnarly KYC process that involves taking embarrassing selfies. The slow and complicated process of transferring fiat cash from our bank is annoying. The learning curve is still too steep to easily turn a sceptic into a investor. Some say that governments are trying to protect the public from scams within the ecosystem, but in reality governments need to listen more closely to the needs of the industry. A sound economic environment within a nation is created with mature conversations between entrepreneurs, key players, investors and regulatory institutions. Not even the mighty China have been successful in banning Bitcoin. The decentralized nature of Bitcoin make it difficult to control and we do not want regulation that stifle innovation but the general public needs some structure. It’s confusing in crypto.
In a desperate attempt to know who is responsible for what governments try to claim some crypto currencies are securities and that some are commodities. This painstaking process may take years and hinder the development of the fourth industrial revolution that we are in. So far lack of government regulation and laws are not making it easier for the industry to grow up. I mean who would take a kid seriously if he or she is allowed to run amok?
It gets worse.
The so called stable coins and defi projects who offer sky high yields are increasingly seen as a threat to traditional finance and we don’t know how to regulate them either. Some exchanges crash and we are left standing wondering how to control what is happening. Hopefully Simon Dixon can help.
It is a problem that the crypto industry is ground-breaking. CBDCs can be a threat to fiat money. When we consider security breaches, coins stolen from wallets and crypto crashes I am starting to wonder whether the crypto industry really is healthy. Let’s be fair. It’s a high risk asset. Highly volatile.
Sure as we learn more about crypto we see the opportunities. But crypto is mostly a joke for those who do not live in the crypto ecosystem and hear about things like Satoshi Island being built and that Saudi Arabia is investing billions in the metaverse and hoping to create 42.000 virtual jobs. Meta and Instagram is also in the game along with google who is betting big on web 3 and on NFTs. It’s happening under the surface of traditional media and people miss out on information about what is coming in the future. The future is certainly a blockchain future in some way shape or form.
But the crypto industry needs help to grow into a healthy environment. Sound regulation is needed. Clear guidelines and easy to use wallets and exchanges. Sure much has happened in the last year that is tremendous for the industry. One of the world’s largest investment management corporation Blackrock has joined forces with Coinbase to offer crypto services to clients with trillions to spend. Trillions of US dollars! The industry will likely elevate fast in next bull market which may be in about 2 years.
But I guess that the general public will not believe in the crypto market until it has settled down. Settled down in a suburb… When the market is stable and boring. When the opportunity for great returns on investment has past. When the risk is low. That’s when the general public feel safe to invest. I guess that’s healthy.
Maybe it takes a rebel in believing in crypto. I know two things for sure.
Not investing is right. Investing after doing your own research is also right.
Have a great day!
Henrik