This post contains affiliate links. As an Amazon Associate I earn from qualifying purchases.
Here we go again. Somebody excitedly drops $100 in cryptocurrency. They tell everyone about their newfound path to financial freedom. A beloved friend or relative sneers, scoffs, and says, “Crypto’s just a scam!”
Arguments ensue. Feelings are hurt. Results vary. Some people stick with it and make a huge fortune. Others give up. Is crypto a scam? Let’s evaluate the situation.
These are falsehoods that seem to prosper.
It’s Just A Phase
If it’s just a phase or a fad, it’s been a pretty long one. Bitcoin, the first cryptocurrency, was released in 2009 and has been going strong ever since.
It’s not just Bitcoin that has thrived. Other cryptocurrencies, known as altcoin – because they are alternatives to Bitcoin, have popped up and many of them are gaining in popularity and usage.
With more major corporations around the world embracing the digital coin trade and accepting such as payments, it doesn’t look like crypto is going anywhere.
Government Is Going To Stop It
Which government? Cryptocurrency is taxed like any other holding. It must be reported, and the government gets what it decides is its share from the value thereof. If a government can tax something, it’s not likely to be outlawed soon.
Several major world banks recognize crypto as a tradeable currency. PayPal accepts it as payment. The government would look foolish to go against such powerful acceptance.
The government couldn’t stop it any more than it could stop the Internet. It could try to outlaw it, but those feeble efforts went nowhere.
It’s Going To Crash
It would take a concerted world-wide unanimous effort to crash all digital currencies. The blockchain technology that holds it is extremely secure.
The online platforms and wallets that store digital coins are too numerous and have security levels from mediocre to extreme.
There are too many coin miners across the world. Stopping all of them at once would require a nuclear holocaust.
It’s Not Real
*sigh* This one floats around the Internet and across the land through the hands and mouths of the ignorant. These people believe that if they can’t stick it in their pocket, it doesn’t exist.
Digital currency is its own economy that, like fiat currency, is kept in check by the makers/miners. The government controls how many dollars or Euros to release each year for their economy to stay on track. Coin developers determine how much of their currency can be mined during any time period.
If you own a bitcoin and I want a bitcoin, and I own a diamond ring that you want, I may accept your bitcoin in exchange for my ring. A nontangible asset has been exchanged for a physical, touchable item. The bitcoin, therefore, is a real asset because it has demonstrated a real worth.
It maintains its value when I use the bitcoin to buy a used car from someone else. If people are willing to accept it as currency, then currency it is.
Crypto Is A Ponzi Scam
You’d think this argument would be dead by now, but it isn’t. You can find this argument written by so-called experts in the trading and marketing industries.
Ponzi scam is a fancy word for a pyramid scheme. It means that somebody convinces someone else to invest money in a nonexistent product or service. The new person then convinces others to place their money. People at the top have millions while the newcomers are ripped off and have nothing in return.
According to the financial dictionary, The Ponzi scam is a fraudulent investment scheme. Investors are promised very high returns by the promoter. The original investors often realize these high returns because their payouts are funded by cash from new investors. New investors’ cash is used to pay out the original investors. The investors’ funds are usually not applied to the stated purpose.
These believers say the developer has created a fake currency and convinced others, (miners), to make it. The miners get money from the buyers. The miners then give money to the developer, and the users at the bottom just have invisible useless coinage.
The fallacy of this argument lies in the fact that millions of users actually buy and sell with these invisible coins. Sure, the fiat value of the digital coins goes up and down, but that happens with the actual fiat currencies of the world. It happens with precious gems and metals.
Haters gonna hate, but the truth is cryptocurrency is not a scam! It’s here for keeps.
Too Many People Use It
Since you obviously have Internet access, chances are solid that you know someone who uses cryptocurrency. Maybe they just invest a smidgen; maybe they’re hardcore. Maybe they’ve lost out on fiat value due to poor investment decisions; maybe they’ve made thousands.
PayPal, Microsoft, the World Bank, and other major corporations use it. That’s a lot of faith! That’s a lot of people!
Governments Acknowledge Crypto Has Value
If they tax it, it has value. Cryptocurrency has fiat value and trade value. Make sure you mention your holdings to your tax return preparers!
Governments realize that you can buy and sell with cryptocurrency. It’s a liquid asset. Like dollars or pounds in a savings account, digital coin is a taxable holding.
Blockchain Technology Is Highly Secure
Major corporations across the world are switching, if they haven’t already switched, to the highly secure blockchain for their digital data storage and transfer.
Blockchain companies are being born at a rapid pace and implementing the technology for the small and the great entities that want to have the highest security possible.
Governments, banks, credit companies, software agencies, etc., are moving to blockchain. Blockchain is therefore trustworthy and tightly secure. Visa trusts it. I trust it. You can too. If you don’t, that’s too bad, because it’s here to stay and growing exponentially.
Is Crypto A Scam? NO!!
Where do you stand? Are you a naysayer or an investor? Share your reasons in the comments below!