Crypto Critics Explained
CoinBundle Team · Follow
Published in · 7 min read · Sep 20, 2018
It’s no surprise that people who understand and know how cryptocurrency works believe in its use and more importantly trust that it will be worth investing their hard-earned money in — but what about the rest? Unless you’ve been living under a crypto rock for the past few years, you’ll know that there’s a good amount of people who actually don’t trust cryptocurrency and refuse to engage in any activity that has to do with it. Before you start dismissing and ignoring these critics, make an effort to understand their point of view and where they’re coming from, as it will lead to a much more productive conversation. Let’s discuss some of the main reasons why crypto critics are so quick to dismiss cryptocurrency and all that it entails.
This is not financial investment advice.
This article discusses key aspects of why some people do not trust cryptocurrency.
In this article
- Crypto Has No Value
- It’s Not Backed By Government
- Security Issues
- Most People Don’t Understand It
One of the most popular reasons for critics to dismiss cryptocurrency is the notion that it doesn’t have any real value tied to it. While there are many people who believe that Bitcoin could one day replace gold in terms of value, others believe that it has no real value and will eventually be worth little to nothing. However, the same can also be said about other currencies like gold and fiat.
Gold, for example, is thought to have intrinsic value because of its applications in industries like dentistry and electronics. Some people even argue that dollar bills have intrinsic value, since they can be used as kindling or to write on. Yet, as you further analyze either of those claims, it becomes clear that gold and paper money don’t have that much intrinsic value either. What separates paper currencies and gold from digital assets, is the fact that the former are tangible assets which can be physically held and used.
So when someone claims that digital assets are inherently “valueless” and can’t accumulate much real value, just remind them that the same can be said about any paper currency that they might favor. Let’s take the U.S. Dollar for example, as it only takes about 5 cents to make a $1 bill. So where does the rest of the value come from, outside of the 5 cents that goes into its production? Well, that all comes from the trust that we as users give to paper currency for holding real value, which is why so many people argue that digital assets are valueless.
One of the most common reasons for why people don’t trust cryptocurrency is the assumption that it doesn’t hold any real value. However, the same can be argued about paper currency (which is just paper) but most crypto critics feel comfortable with being able to physically hold it.
The next reason as to why so many people don’t trust cryptocurrency is because it’s not backed by any government. One of cryptocurrency’s defining features is that it’s decentralized and does not need to be overseen by a governmental authority. While that may seem appealing to some, it’s actually a pretty big reason why some people stay away from crypto in the first place. As it turns out, some people feel much safer and more comfortable when their assets are always being overseen by the government, thus leading some people to stay away from crypto for that exact reason.
The real value of fiat money is protected by the credibility of the government and the central banks tasked with controlling money. Central banks are independent but actually have considerable political influence, essential to ensuring the value of fiat money. Countries that disregard the latest developments in monetary policy, like Venezuela, do that to their cost. For reasons which have to do with volatility and fluctuating prices, many crypto critics fear that there is a chance that their digital investments can completely diminish and nobody — not even the government — can save them.
It’s important to note, however, that cryptocurrency is still at a very young age in terms of its overall growth. In the event that someone you are talking to brings this up, remind them that it’s way too early to have a government or central authority get involved. In fact, we are already seeing and have seen some national governments issue their own cryptocurrency. Given how early it is, we can definitely expect more regulations to be made which could possibly involve government-backed cryptocurrencies.
Cryptocurrency is decentralized and does not require a central government to oversee its transactions. However, the fear of not having their assets tied back to the government is one reason why these critics don’t trust crypto.
For anyone who actually understands how cryptocurrency works — including blockchain technology — the biggest reason to not trust crypto comes from security issues that could leave their assets at risk of being stolen. Realistically, you can’t blame someone for believing this given the current narrative around hackers and digital security. On top of that, there are just as many people who don’t understand how blockchain technology works, preventing them from putting their faith in the overall concept.
If you’ve been keeping up with recent crypto news and headlines, then you’ve probably seen one of the many stories that detail recent hacks and stolen coins. Cash and electronic money are also subject to theft, but there’s no need for a private key with cash transactions and keys are much less important for electronic cash transactions. There are multiple layers of security that protect us. If people who only use cash and electronic cash payments take basic precautions to keep their assets safe, they’re in good hands.
Unfortunately, the same cannot be said about cryptocurrency. Someone who may not understand how risky it is to store their digital assets on an exchange or online wallet might actually fall victim to hacks or stolen identity. Keeping track of all your keys is something that an older investor may not have experience with, which would make them feel insecure about keeping their cryptocurrency in the hands of an exchange.
There are some people who actually understand how blockchain technology works, which is why they don’t trust cryptocurrency. The idea of having to keep track of all their keys and passcodes might discourage them from investing in the first place.
When it all comes down to identifying the biggest and most common reason why sceptics do not trust cryptocurrency, it has to be the fact that they simply don’t know how it works. To keep it simple, take your own situation as an example. If you are an adult who doesn’t have a ton of extra money laying around to invest, then you’re probably not going to pursue a relatively new investing avenue. Let’s face it, you wouldn’t have the time nor the desire to learn about an entirely new asset class, let alone taking the risk of putting your limited money into a space that hasn’t proven anything.
Yet, this is what separates many crypto investors from critics. People who invest their money into cryptocurrency must have a reason or desire to do so, whether that’s learning about a new investing opportunity, believing in the future of blockchain technology, or even just wanting to be a part of something that has a ton of potential. Those who don’t trust cryptocurrency refuse to accept its technological benefits, potential, or complexity. If someone admits that they simply don’t know enough about cryptocurrency to invest in it, can you really blame them?
On the other hand, if you come across someone who doesn’t trust cryptocurrency because they simply don’t want to, then it’s definitely because they don’t know how it works, which isn’t entirely their fault. As we mentioned earlier, cryptocurrency is still relatively new in terms of its overall exposure, so it makes sense for people to not have heard about it. Of course, as blockchain and cryptocurrency continue to gain popularity and legitimization, an increasing amount of younger people will soon gain this valuable experience needed to fully get involved. At the current rate that it’s growing, it’s just a matter of time before we see cryptocurrency and blockchain completely legitimized and used.
The fact of the matter is that most people don’t know how cryptocurrency works. As such, these people might critique cryptocurrency as being valueless, risky, and just not worth their time. Lack of awareness is one of the biggest reasons why people don’t trust crypto.
We are living in a unique time in the context of all human history. With a seemingly exponential rate of innovation and advancement, society is moving at an unprecedented pace that is susceptible to more changes than ever. Those unwilling to accept that long-standing institutions are starting to see their end are persistent in keeping things the way they are. So when someone tells you that they don’t trust cryptocurrency, present the facts that are currently taking place across the world. From financial adoption to its early stage in development, cryptocurrency is very well on its way to becoming the future of finance.
