Is Cryptocurrency Nothing But A Scam?

11 Jun 2024

Cryptocurrency has been the talk of the town for quite a few years, especially after the pandemic, with prices soaring to the moon after a brief fall. Most crypto "bros" are overtly emotional about any criticisms that come their way. Many of their arguments against the criticism are on how crypto, especially Bitcoin, can avoid another 2008 since it's decentralized.

Now, we all have come across various articles discussing problems with Bitcoin - a slow processing rate of 7 transactions per second, 120 gigabytes of chain, potential loss of transactions, risk of 51% attack, centralized mining, and advocacy, immutability leading to irreversible mistakes and frauds and the fact that it consumes more electricity per year than many countries.

Crypto holders talk about the potential use of Bitcoin as a currency, even going to the extent of harassing merchants into accepting Bitcoin as a payment option when the very fact that Bitcoin is deflationary - it is more valuable tomorrow than today due to its limited supply. Hence, as an individual, I am motivated to spend my fiat currency (which is inflationary) over my Bitcoins.

Also, millions of scams are happening with these so-called alt-coins that deserve a separate post.

These fanatics also talk about the revolutionary Ethereum that is supposed to solve the world's existing data problems. If you deep dive into the current use cases of most Ethereum-based startups, almost 99% of them are solvable using a centralized approach. I only know of one real-life use for "blockchain-related" technology - Git, which is based on Merkle Trees. It is a lifesaver for the IT industry and programmers.

New investors, especially people unfamiliar with blockchain technology or advanced finance, must be protected against scams that pay back early adopters with their money, much like any other Ponzi scheme.

Decentralized databases may find a unique and niche use case for a particular consortium of industries intrinsically motivated to pay for all the processing power to commission the blockchain and keep it running.

I only see cryptocurrency, particularly a stablecoin, as a store of value (because people, for some reason, believe it's valuable), much like gold. But hey! At least gold looks pretty, and you can hold gold bars in your hand and feel rich!

What do you think about cryptocurrency and blockchains? Have you found any use cases that have any potential? Let's discuss in the comments :)