Cryptocurrency isn’t the future of banking, it’s a financial fad only kept alive by the excitement of a new idea.
Cryptocurrencies are digital currencies powered by encryption algorithms, unlike the traditional currencies upheld by governments or banks. A collection of cryptocurrencies can form a ‘digital wallet’ allowing users to make payments through online systems. This means that cryptocurrency (or crypto) is not the central currency of any government’s monetary system but is simply worth whatever the market is paying at any given moment.
For this reason, crypto is unreliable as a monetary medium. Putting real money into crypto may resemble investing in foreign currency, but it lacks the safety mechanism that foreign currency is legitimized through governments, making it more volatile and speculative.
It doesn’t help that an investment in crypto has no real-world connection or value. There’s nothing tangible or easily definable with a crypto investment. Traditional currency is tangible through cash, which is monopolized by governmentally legitimized central banks which have reserve funds for all other banks in a nation. Cryptocurrency, on the other hand, isn’t investing into anything real at all.
On top of its already unreliable nature, the crypto market is full of scams, and even prominent influencers have taken part in fraudulent crypto-related practices costing their trusting fans large sums of money.
So why invest in cryptocurrency at all? For many, the stories of the lucky few who invested in the right cryptocurrency at the right time are enough to inspire confidence in this unstable market. After all, if these ordinary individuals became millionaires through this relatively new investment system, perhaps it’s worth a try.
But this idea just adds to the many lives that are ruined by crypto. Trusting an entirely digital, unlegislated currency – a currency with a value entirely dependent on the belief that one day it will be in wide use – is like investing in people’s future beliefs, yet the money that users can lose on this investment is real.
Crypto hasn’t gained popularity because it’s a solid idea. Despite what many will suggest, crypto is not the future of commerce. It simply sells a fiction that appears realistic. Because money is mostly represented virtually, an entirely digital currency may seem like a logical next step – but if it could ever compete with national currencies, the government would take it over, regulate it to death or ban it altogether.
The reason crypto remains a topic of conversation is because of its claim to be the currency of the future.
It’s exciting to see a fresh idea that could revolutionize human civilization. In 2007, the original iPhone normalised smartphones and changed the way humans think about communication. The prospect of bringing currency into ‘the future’ is an exciting one because it makes us think about the future of commerce.
As human beings, we’re always on the lookout for the next big thing. Neuroscience suggests that humans are always looking forward and are often unhappy with what they have in the moment. With cryptocurrency’s promise of being the future of commerce, it’s no wonder that it’s turned heads – especially when a few individuals have managed to strike it rich with crypto.
But a few lucky individuals and a bold promise aren’t enough to actually revolutionize the world. To do so, an idea has to prove why it’s an improvement over the former method; it had to show why it’s worth switching to for the average consumer.
Cryptocurrency doesn’t have this benefit. In a world increasingly reliant on technology, crypto is just an idea so tech-minded that it seems like it must be the way forward, even if it’s confusing and makes no sense to adopt whatsoever.
Cryptocurrency isn’t the currency of the future. It’s simply companies’ attempts to modernize commerce and to fix what isn’t broken.