Why is crypto NOT good
https://www.managementstudyguide.com/why-cryptocurrency-is-a-bad-investment.htm
Five Reasons Which Make Cryptocurrency a Bad Investment
2001-01-01
None
<div><div>
<p>The incredible rise in the price of cryptocurrencies in the past few months has caught the interest of almost every investor in the entire world. Even the most traditional investors have been introduced to the concept of cryptocurrencies. However, not all investors want to invest in it. For instance, Warren Buffet has famously stated that he or is his company will not invest in cryptocurrencies using any mechanism. Buffet clarified that he would not short them or take any position in them. This is because he believes that cryptocurrencies will ultimately come to a bad end.</p>
<p>Many orthodox investors share the same opinion with Warren Buffet. In the <a href="https://www.managementstudyguide.com/disadvantages-of-using-cryptocurrencies.htm">previous article</a>, we studied the disadvantages of using cryptocurrency from an end user’s point of view. In this article, we will have a closer look at why orthodox investors believe that investing in cryptocurrencies is a bad idea.</p>
<h3>1. Cryptocurrencies do not Generate Cash Flow</h3>
<p>Traditional investors consider a cash outflow to be an investment if it generated future cash inflows without the need to sell the asset. For instance, if a person buys a home, they can generate cash flow in the form of rent without having to sell the underlying asset.</p>
<p>Similarly, if an investor buys equity shares in the business, those shares generate cash flow in the form of dividends. However, when it comes to cryptocurrencies, there is no cash flow which is generated.</p>
<p>The only gain that the investor hopes to make is if they find someone who is willing to pay a higher price for the currency on the market. This makes cryptocurrency investors vulnerable to the whims of the marketplace.</p>
<p>The lack of periodic cash flows makes cryptocurrencies inherently speculative. Most people who hold these currencies are speculators hoping to make a quick buck.</p>
<p>Hence, according to orthodox investors, buying into cryptocurrencies is like buying into the greater fool theory! The only possible way to make money is to convince someone to buy the same asset at a greater price.</p>
<h3>2. Cryptocurrencies are not Backed by Tangible Assets</h3>
<p>Most orthodox investors believe that cryptocurrencies do not make good investments. However, a large portion of them also believes that cryptocurrencies do not make good currencies either. This is because, in order for currencies to be effective, they should have some underlying value.</p>
<p>Traditional currencies such as gold and silver had value because they were considered to be precious metals and emerged as currencies in almost all parts of the world. On the other hand, fiat currencies derive their value from the power of the government.</p>
<p>It is illegal to not accept these currencies in the country where they are issued. However, there is no tangible asset or government decree which assures the value of cryptocurrencies.</p>
<h3>3. Cryptocurrencies are Prone to Hoarding</h3>
<p>Another reason why cryptocurrencies are not considered to be good examples of currency is that they are prone to hoarding.</p>
<p>The job of a currency is to stay in circulation. Currencies enable the transaction of other goods and services. They are just the medium of exchange and do not represent value. However, when it comes to cryptocurrencies, investors want to hoard large amounts of them. This is because they believe that these currencies will increase in value over a period of time.</p>
<p>If an investor believes that their currency will triple in value in a couple of years, they are unlikely to spend it. Hence, it would be wrong to state that cryptocurrencies are the currency of the future. The way they are currently used hints at the fact that they are being used as speculative financial instruments.</p>
<h3>4. Cryptocurrencies are not Stable</h3>
<p>All currencies fluctuate in value. This is because the amount of money in circulation keeps om increasing or decreasing in comparison to the assets in the economy. On average, the United States dollar loses about 2% of its value each year because of inflation. This is normal for currencies.</p>
<p>However, cryptocurrencies take this instability to a whole new level. It is common for cryptocurrencies to lose 30% of their value within a single weekend.</p>
<p>In the past couple of years, cryptocurrencies have been extremely volatile. They have tripled in value only to come back tumbling down and then rising once again. Also, the drop in value gets triggered by seemingly meaningless events.</p>
<p>For instance, when Elon Musk tweeted negative views about cryptocurrencies, a lot of these currencies lost 30% to 40% of their valuation. This level of instability is extreme and hence cryptocurrencies cannot be considered to be a viable store of value.</p>
<h3>5. Cryptocurrencies are not Predictable</h3>
<p>Lastly, movements in the price of cryptocurrencies do not follow any fixed pattern. For instance, stocks seem to have a direct relation with GDP growth whereas bonds have an inverse relationship with interest rate growth. However, when it comes to cryptocurrencies the movements seem completely random. There is no significant correlation to any factor. Hence, cryptocurrency investors cannot keep track of the fundamentals because they do not know what these fundamentals are!</p>
<p>The above factors are significant and make cryptocurrencies unconventional at best and outright speculative at worst. It is for this reason that orthodox financial planners advise their clients to stay away from cryptocurrencies altogether. However, if the clients still want to invest, they are advised to use only a small percentage of their overall portfolio towards cryptocurrencies.</p>
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 5. Five Reasons Which Make Cryptocurrency a Bad Investment

 Five Reasons Which Make Cryptocurrency a Bad Investment

 The incredible rise in the price of cryptocurrencies in the past few months has caught the interest of almost every investor in the entire world. Even the most traditional investors have been introduced to the concept of cryptocurrencies. However, not all investors want to invest in it. For instance, Warren Buffet has famously stated that he or is his company will not invest in cryptocurrencies using any mechanism. Buffet clarified that he would not short them or take any position in them. This is because he believes that cryptocurrencies will ultimately come to a bad end.

 Many orthodox investors share the same opinion with Warren Buffet. In the previous article, we studied the disadvantages of using cryptocurrency from an end users point of view. In this article, we will have a closer look at why orthodox investors believe that investing in cryptocurrencies is a bad idea.

 1. Cryptocurrencies do not Generate Cash Flow

 Traditional investors consider a cash outflow to be an investment if it generated future cash inflows without the need to sell the asset. For instance, if a person buys a home, they can generate cash flow in the form of rent without having to sell the underlying asset.

 Similarly, if an investor buys equity shares in the business, those shares generate cash flow in the form of dividends. However, when it comes to cryptocurrencies, there is no cash flow which is generated.

 The only gain that the investor hopes to make is if they find someone who is willing to pay a higher price for the currency on the market. This makes cryptocurrency investors vulnerable to the whims of the marketplace.

 The lack of periodic cash flows makes cryptocurrencies inherently speculative. Most people who hold these currencies are speculators hoping to make a quick buck.

 Hence, according to orthodox investors, buying into cryptocurrencies is like buying into the greater fool theory! The only possible way to make money is to convince someone to buy the same asset at a greater price.

 2. Cryptocurrencies are not Backed by Tangible Assets

 Most orthodox investors believe that cryptocurrencies do not make good investments. However, a large portion of them also believes that cryptocurrencies do not make good currencies either. This is because, in order for currencies to be effective, they should have some underlying value.

 Traditional currencies such as gold and silver had value because they were considered to be precious metals and emerged as currencies in almost all parts of the world. On the other hand, fiat currencies derive their value from the power of the government.

 It is illegal to not accept these currencies in the country where they are issued. However, there is no tangible asset or government decree which assures the value of cryptocurrencies.

 3. Cryptocurrencies are Prone to Hoarding

 Another reason why cryptocurrencies are not considered to be good examples of currency is that they are prone to hoarding.

 The job of a currency is to stay in circulation. Currencies enable the transaction of other goods and services. They are just the medium of exchange and do not represent value. However, when it comes to cryptocurrencies, investors want to hoard large amounts of them. This is because they believe that these currencies will increase in value over a period of time.

 If an investor believes that their currency will triple in value in a couple of years, they are unlikely to spend it. Hence, it would be wrong to state that cryptocurrencies are the currency of the future. The way they are currently used hints at the fact that they are being used as speculative financial instruments.

 4. Cryptocurrencies are not Stable

 All currencies fluctuate in value. This is because the amount of money in circulation keeps om increasing or decreasing in comparison to the assets in the economy. On average, the United States dollar loses about 2% of its value each year because of inflation. This is normal for currencies.

 However, cryptocurrencies take this instability to a whole new level. It is common for cryptocurrencies to lose 30% of their value within a single weekend.

 In the past couple of years, cryptocurrencies have been extremely volatile. They have tripled in value only to come back tumbling down and then rising once again. Also, the drop in value gets triggered by seemingly meaningless events.

 For instance, when Elon Musk tweeted negative views about cryptocurrencies, a lot of these currencies lost 30% to 40% of their valuation. This level of instability is extreme and hence cryptocurrencies cannot be considered to be a viable store of value.

 5. Cryptocurrencies are not Predictable

 Lastly, movements in the price of cryptocurrencies do not follow any fixed pattern. For instance, stocks seem to have a direct relation with GDP growth whereas bonds have an inverse relationship with interest rate growth. However, when it comes to cryptocurrencies the movements seem completely random. There is no significant correlation to any factor. Hence, cryptocurrency investors cannot keep track of the fundamentals because they do not know what these fundamentals are!

 The above factors are significant and make cryptocurrencies unconventional at best and outright speculative at worst. It is for this reason that orthodox financial planners advise their clients to stay away from cryptocurrencies altogether. However, if the clients still want to invest, they are advised to use only a small percentage of their overall portfolio towards cryptocurrencies.


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 Authorship/Referencing - About the Author(s)

 The article is Written and Reviewed by Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.
 


 Cryptocurrency
 * Cryptocurrency - An Introduction
 * Advantages of Using Cryptocurrency
 * Disadvantages of Using Cryptocurrencies
 * Five Reasons Which Make Cryptocurrency a Bad Investment
 * Link Between Blockchain and Cryptocurrency
 * Proof of Work Mechanism in Cryptocurrency
 * Mining Pools in Cryptocurrency
 * The Proof of Stake Mechanism in Cryptocurrency
 * Proof of Importance in Cryptocurrency
 * Understanding Cryptocurrency Forks
 * What are Soft Forks?
 * What are Hard Forks?
 * Centralized Cryptocurrency Exchanges
 * Decentralized Crypto Exchanges
 * Smart Contracts in Cryptocurrency
 * Cryptocurrency Wallets - Meaning and Different Types of Wallets


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The incredible rise in the price of cryptocurrencies in the past few months has caught the interest of almost every investor in the entire world. Even the most traditional investors have been introduced to the concept of cryptocurrencies. However, not all investors want to invest in it. For instance, Warren Buffet has famously stated that he or is his company will not invest in cryptocurrencies using any mechanism. Buffet clarified that he would not short them or take any position in them. This is because he believes that cryptocurrencies will ultimately come to a bad end.
Many orthodox investors share the same opinion with Warren Buffet. In the previous article, we studied the disadvantages of using cryptocurrency from an end user’s point of view. In this article, we will have a closer look at why orthodox investors believe that investing in cryptocurrencies is a bad idea.
1. Cryptocurrencies do not Generate Cash Flow
Traditional investors consider a cash outflow to be an investment if it generated future cash inflows without the need to sell the asset. For instance, if a person buys a home, they can generate cash flow in the form of rent without having to sell the underlying asset.
Similarly, if an investor buys equity shares in the business, those shares generate cash flow in the form of dividends. However, when it comes to cryptocurrencies, there is no cash flow which is generated.
The only gain that the investor hopes to make is if they find someone who is willing to pay a higher price for the currency on the market. This makes cryptocurrency investors vulnerable to the whims of the marketplace.
The lack of periodic cash flows makes cryptocurrencies inherently speculative. Most people who hold these currencies are speculators hoping to make a quick buck.
Hence, according to orthodox investors, buying into cryptocurrencies is like buying into the greater fool theory! The only possible way to make money is to convince someone to buy the same asset at a greater price.
2. Cryptocurrencies are not Backed by Tangible Assets
Most orthodox investors believe that cryptocurrencies do not make good investments. However, a large portion of them also believes that cryptocurrencies do not make good currencies either. This is because, in order for currencies to be effective, they should have some underlying value.
Traditional currencies such as gold and silver had value because they were considered to be precious metals and emerged as currencies in almost all parts of the world. On the other hand, fiat currencies derive their value from the power of the government.
It is illegal to not accept these currencies in the country where they are issued. However, there is no tangible asset or government decree which assures the value of cryptocurrencies.
3. Cryptocurrencies are Prone to Hoarding
Another reason why cryptocurrencies are not considered to be good examples of currency is that they are prone to hoarding.
The job of a currency is to stay in circulation. Currencies enable the transaction of other goods and services. They are just the medium of exchange and do not represent value. However, when it comes to cryptocurrencies, investors want to hoard large amounts of them. This is because they believe that these currencies will increase in value over a period of time.
If an investor believes that their currency will triple in value in a couple of years, they are unlikely to spend it. Hence, it would be wrong to state that cryptocurrencies are the currency of the future. The way they are currently used hints at the fact that they are being used as speculative financial instruments.
4. Cryptocurrencies are not Stable
All currencies fluctuate in value. This is because the amount of money in circulation keeps om increasing or decreasing in comparison to the assets in the economy. On average, the United States dollar loses about 2% of its value each year because of inflation. This is normal for currencies.
However, cryptocurrencies take this instability to a whole new level. It is common for cryptocurrencies to lose 30% of their value within a single weekend.
In the past couple of years, cryptocurrencies have been extremely volatile. They have tripled in value only to come back tumbling down and then rising once again. Also, the drop in value gets triggered by seemingly meaningless events.
For instance, when Elon Musk tweeted negative views about cryptocurrencies, a lot of these currencies lost 30% to 40% of their valuation. This level of instability is extreme and hence cryptocurrencies cannot be considered to be a viable store of value.
5. Cryptocurrencies are not Predictable
Lastly, movements in the price of cryptocurrencies do not follow any fixed pattern. For instance, stocks seem to have a direct relation with GDP growth whereas bonds have an inverse relationship with interest rate growth. However, when it comes to cryptocurrencies the movements seem completely random. There is no significant correlation to any factor. Hence, cryptocurrency investors cannot keep track of the fundamentals because they do not know what these fundamentals are!
The above factors are significant and make cryptocurrencies unconventional at best and outright speculative at worst. It is for this reason that orthodox financial planners advise their clients to stay away from cryptocurrencies altogether. However, if the clients still want to invest, they are advised to use only a small percentage of their overall portfolio towards cryptocurrencies.
   Authorship/Referencing - About the Author(s)
 
The article is Written and Reviewed by Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.
Five Reasons Which Make Cryptocurrency a Bad Investment
https://www.managementstudyguide.com/why-cryptocurrency-is-a-bad-investment.htm
https://www.investopedia.com/tech/whats-environmental-impact-cryptocurrency/
What's the Environmental Impact of Cryptocurrency?
2022-12-19
Nathan Reiff
<div><div>
<p>
Many people are bullish about cryptocurrencies like Bitcoin, but detractors point to a major flaw—cryptocurrency mining is highly energy-intensive. While mining is just one method available to validate cryptocurrency transactions and mint new crypto coins, it's the method used by Bitcoin and Ethereum, the two leading cryptocurrencies.
</p>
<p>
Keep reading to find out how much energy is used by cryptocurrency mining, and understand the other environmental impacts of cryptocurrency. Learn about alternatives to crypto mining that use much less energy.
</p>
<div>
<h3>
Key Takeaways</h3>
<div>
<ul><li>Bitcoin and other proof-of-work cryptocurrencies require large amounts of energy—more than is used by entire countries—to perform the work associated with crypto mining.</li><li>The largest country for Bitcoin mining is the United States, which accounts for 37.84% of Bitcoin mining activities.</li><li>Nearly 38 kilotons of electronic waste are annually produced as a byproduct of Bitcoin mining.</li><li>Some cryptocurrencies do not use mining, but Bitcoin is unlikely to change its consensus algorithm.</li></ul></div>
</div>
<div>
<h4>
Bitcoin Mining Explained</h4>
</div>
<h2> Cryptocurrency Energy Consumption </h2>
<p>
There is no direct way to calculate how much energy is used for <a href="https://www.investopedia.com/terms/b/bitcoin.asp">Bitcoin</a> and cryptocurrency mining, but the figure can be estimated from the network's hashrate and the consumption by commercially-available mining rigs. For example, the Cambridge Bitcoin Electricity Consumption Index estimates that Bitcoin, the most widely-mined cryptocurrency network, used an estimated 85 Terawatt-hours (TWh) of electricity (0.38% of global electricity use) and about 218 TWh of energy (0.13% of global energy production) at the point of production—more than Belgium and Finland, using the latest country energy estimates from 2019.
</p>
<p>
Another estimate by Digiconomist, a <a href="https://www.investopedia.com/terms/d/digital-money.asp">cryptocurrency</a> analytics site, places the figure at 130.3 Terawatt-hours, based on energy consumption through July 9, 2022. This computes to around 1,455.8 kilowatt-hours of electricity per transaction, the same amount of power consumed by the average American household over 49.9 days.
</p>
<p>
<a href="https://www.investopedia.com/terms/e/ethereum.asp">Ethereum</a>, the second-largest cryptocurrency network, was estimated to use 62.77 Terawatt-hours of electricity per year, based on energy consumption through July 9, 2022. The average Ethereum transaction required 163 kilowatt-hours of electricity. However, since Ethereum rolled out its proof of work upgrade in September 2022, electrical energy requirements have dropped to 0.01 TWh per year, with one transaction using 0.03 kWh.
</p>
<div>
<p>More than 20,000 different cryptocurrencies and over 500 exchanges exist worldwide. None of the cryptocurrency energy use reports or calculations account for the energy expended to develop new coins or administer services for them.</p>
</div>
<p>
The amount of energy consumed by cryptocurrency mining will likely vary over time, assuming that prices and user adoption continue to vary. Cryptocurrency mining is a competitive process: as the value of the block reward increases, the incentives to start mining also go up. Higher cryptocurrency prices mean more energy being consumed by crypto networks.
</p>
<h2> Why Cryptocurrency Mining Requires Energy </h2>
<p>
The energy intensity of crypto mining is a feature, not a bug. Bitcoin mining is the automated process of validating Bitcoin transactions without the intervention of trusted third parties like banks.
</p>
<p>
The way the transaction validation process is designed uses <a href="https://www.investopedia.com/nfts-and-the-environment-5220221">large amounts of energy</a>—the network depends on the computational power of thousands of mining machines. This dependency maintains the security of cryptocurrency blockchains that use proof-of-work consensus.
</p>
<h2> Environmental Impacts of Cryptocurrency Mining </h2>
<p>
Calculating the carbon footprint of cryptocurrency is more complicated. Although fossil fuels are the predominant energy source in most countries where cryptocurrency is mined, miners must seek out the most inexpensive energy sources to remain profitable.
</p>
<p>
Digiconomist estimates that the Bitcoin network is responsible for about 73 million tons of carbon dioxide per year—equal to the amounts generated by Turkmenistan. Based on data through September 2022, Ethereum produced an estimated 35.4 million tons of carbon dioxide emissions before dropping to 0.01 million tons following its transition to proof of work.
</p>
<h3> Countries With the Largest Impact </h3>
<p>
Researchers at the University of Cambridge report that most Bitcoin mining occurs in the U.S., China, and Kazakhstan. According to the Center for Strategic and International Studies, about 76% of the energy consumed in China is generated from coal and crude oil. China's percent of the global hash rate is 21%.
</p>
<p>
About 38% of mining takes place in the U.S. The U.S. gets most of its electricity by burning fossil fuels, per 2019 data from the EIA. Kazakhstan accounts for 13% of the world's Bitcoin mining and mainly uses fossil fuels.
</p>
<p>
As a result, three <a href="https://www.investopedia.com/articles/investing/092915/5-countries-produce-most-carbon-dioxide-co2.asp">countries heavily dependent on fossil fuels</a> are responsible for around 72% of the world's Bitcoin mining.
</p>
<h3> Electronic Waste </h3>
<p>
Cryptocurrency mining also generates significant electronic waste, as mining hardware quickly becomes obsolete. This is especially true for <a href="https://www.investopedia.com/terms/a/asic.asp">Application-Specific Integrated Circuit</a> (ASIC) miners, which are specialized machines designed for mining the most popular cryptocurrencies. According to Digiconomist, the <a href="https://www.investopedia.com/tech/bitcoin-lightning-network-problems/">Bitcoin network</a> generates approximately 38 thousand tons of electronic waste annually.
</p>
<h2> Could Cryptocurrency Mining Use Less Energy? </h2>
<p>
Large-scale cryptocurrency miners are often located where energy is abundant, reliable, and cheap. But processing cryptocurrency transactions and minting new coins does not need to be energy-intensive.
</p>
<p>
The <a href="https://www.investopedia.com/terms/p/proof-stake-pos.asp">proof-of-stake</a> (PoS) method of validating cryptocurrency transactions and minting new coins is an alternative to cryptocurrency mining that does not use extensive computing power. The authority to validate transactions and operate the crypto network is instead granted based on the amount of cryptocurrency that a validator has "staked" or agreed not to trade or sell.
</p>
<p>
Other methods of validation, such as proof of history, proof of elapsed time, proof of burn, and proof of capacity, are also being developed. While Ethereum's developers have retired the blockchain's proof-of-work mechanism—with estimates calling for a 99.9% reduction in carbon emissions—there is no such objective in the Bitcoin community. Since Bitcoin is the most popular crypto, it means that mining, along with its enormous energy costs, is likely here to stay.<br />
</p>
<div>
<h2>Is Cryptocurrency Environmentally Friendly?</h2>
<p>Some cryptocurrencies have intense energy requirements, special equipment needs and generate lots of waste. In that sense, some are not environmentally friendly; However, it's important to remember the environmental costs of gathering natural resources and expending energy and electricity to make and maintain fiat currency and our current banking system.</p>
</div>
<div>
<h2>Can Bitcoin Become Environmentally Friendly?</h2>
<p>In short, because the validation process is energy-intensive, competitive, and rewards-based, it is unlikely that Bitcoin will reduce its energy footprint. Even after the last bitcoin is rewarded, the network will still require large amounts of electricity to validate transactions.</p>
</div>
<div>
<h2>How Much of Crypto is Renewable?</h2>
<p>There is currently not enough official information available to determine how much of the energy consumed by cryptocurrencies is from renewable sources.</p>
</div>
<p>
<em>Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.</em>
</p>
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 Table of Contents
 * Crypto Energy Consumption
 * Why Mining Requires Energy
 * Environmental Impacts of Mining
 * Developments in Mining
 * FAQs
 * Investopedia
 * Cryptocurrency

 What's the Environmental Impact of Cryptocurrency?

 By
 Nathan Reiff
 Full Bio
 Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
 Learn about our editorial policies
 Updated September 28, 2022
 Reviewed by
 Erika Rasure
 Reviewed by Erika Rasure
 Full Bio

 Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest.

 Learn about our Financial Review Board
 Fact checked by
 Suzanne Kvilhaug
 Fact checked by Suzanne Kvilhaug
 Full Bio
 Suzanne is a content marketer, writer, and fact-checker. She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies for financial brands.
 Learn about our editorial policies

 Many people are bullish about cryptocurrencies like Bitcoin, but detractors point to a major flaw—cryptocurrency mining is highly energy-intensive. While mining is just one method available to validate cryptocurrency transactions and mint new crypto coins, it's the method used by Bitcoin and Ethereum, the two leading cryptocurrencies.

 Keep reading to find out how much energy is used by cryptocurrency mining, and understand the other environmental impacts of cryptocurrency. Learn about alternatives to crypto mining that use much less energy.

 Key Takeaways

 * Bitcoin and other proof-of-work cryptocurrencies require large amounts of energy—more than is used by entire countries—to perform the work associated with crypto mining.
 * The largest country for Bitcoin mining is the United States, which accounts for 37.84% of Bitcoin mining activities.
 * Nearly 38 kilotons of electronic waste are annually produced as a byproduct of Bitcoin mining.
 * Some cryptocurrencies do not use mining, but Bitcoin is unlikely to change its consensus algorithm.
 1:30

 Bitcoin Mining Explained

 Cryptocurrency Energy Consumption

 There is no direct way to calculate how much energy is used for Bitcoin and cryptocurrency mining, but the figure can be estimated from the network's hashrate and the consumption by commercially-available mining rigs. For example, the Cambridge Bitcoin Electricity Consumption Index estimates that Bitcoin, the most widely-mined cryptocurrency network, used an estimated 85 Terawatt-hours (TWh) of electricity (0.38% of global electricity use) and about 218 TWh of energy (0.13% of global energy production) at the point of production—more than Belgium and Finland, using the latest country energy estimates from 2019.

 Another estimate by Digiconomist, a cryptocurrency analytics site, places the figure at 130.3 Terawatt-hours, based on energy consumption through July 9, 2022. This computes to around 1,455.8 kilowatt-hours of electricity per transaction, the same amount of power consumed by the average American household over 49.9 days.

 Ethereum, the second-largest cryptocurrency network, was estimated to use 62.77 Terawatt-hours of electricity per year, based on energy consumption through July 9, 2022. The average Ethereum transaction required 163 kilowatt-hours of electricity. However, since Ethereum rolled out its proof of work upgrade in September 2022, electrical energy requirements have dropped to 0.01 TWh per year, with one transaction using 0.03 kWh.

 More than 20,000 different cryptocurrencies and over 500 exchanges exist worldwide. None of the cryptocurrency energy use reports or calculations account for the energy expended to develop new coins or administer services for them.

 The amount of energy consumed by cryptocurrency mining will likely vary over time, assuming that prices and user adoption continue to vary. Cryptocurrency mining is a competitive process: as the value of the block reward increases, the incentives to start mining also go up. Higher cryptocurrency prices mean more energy being consumed by crypto networks.

 Why Cryptocurrency Mining Requires Energy

 The energy intensity of crypto mining is a feature, not a bug. Bitcoin mining is the automated process of validating Bitcoin transactions without the intervention of trusted third parties like banks.

 The way the transaction validation process is designed uses large amounts of energy—the network depends on the computational power of thousands of mining machines. This dependency maintains the security of cryptocurrency blockchains that use proof-of-work consensus.

 Environmental Impacts of Cryptocurrency Mining

 Calculating the carbon footprint of cryptocurrency is more complicated. Although fossil fuels are the predominant energy source in most countries where cryptocurrency is mined, miners must seek out the most inexpensive energy sources to remain profitable.

 Digiconomist estimates that the Bitcoin network is responsible for about 73 million tons of carbon dioxide per year—equal to the amounts generated by Turkmenistan. Based on data through September 2022, Ethereum produced an estimated 35.4 million tons of carbon dioxide emissions before dropping to 0.01 million tons following its transition to proof of work.

 Countries With the Largest Impact

 Researchers at the University of Cambridge report that most Bitcoin mining occurs in the U.S., China, and Kazakhstan. According to the Center for Strategic and International Studies, about 76% of the energy consumed in China is generated from coal and crude oil. China's percent of the global hash rate is 21%.

 About 38% of mining takes place in the U.S. The U.S. gets most of its electricity by burning fossil fuels, per 2019 data from the EIA. Kazakhstan accounts for 13% of the world's Bitcoin mining and mainly uses fossil fuels.

 As a result, three countries heavily dependent on fossil fuels are responsible for around 72% of the world's Bitcoin mining.

 Electronic Waste

 Cryptocurrency mining also generates significant electronic waste, as mining hardware quickly becomes obsolete. This is especially true for Application-Specific Integrated Circuit (ASIC) miners, which are specialized machines designed for mining the most popular cryptocurrencies. According to Digiconomist, the Bitcoin network generates approximately 38 thousand tons of electronic waste annually.

 Could Cryptocurrency Mining Use Less Energy?

 Large-scale cryptocurrency miners are often located where energy is abundant, reliable, and cheap. But processing cryptocurrency transactions and minting new coins does not need to be energy-intensive.

 The proof-of-stake (PoS) method of validating cryptocurrency transactions and minting new coins is an alternative to cryptocurrency mining that does not use extensive computing power. The authority to validate transactions and operate the crypto network is instead granted based on the amount of cryptocurrency that a validator has "staked" or agreed not to trade or sell.

 Other methods of validation, such as proof of history, proof of elapsed time, proof of burn, and proof of capacity, are also being developed. While Ethereum's developers have retired the blockchain's proof-of-work mechanism—with estimates calling for a 99.9% reduction in carbon emissions—there is no such objective in the Bitcoin community. Since Bitcoin is the most popular crypto, it means that mining, along with its enormous energy costs, is likely here to stay.

 Is Cryptocurrency Environmentally Friendly?

 Some cryptocurrencies have intense energy requirements, special equipment needs and generate lots of waste. In that sense, some are not environmentally friendly; However, it's important to remember the environmental costs of gathering natural resources and expending energy and electricity to make and maintain fiat currency and our current banking system.

 Can Bitcoin Become Environmentally Friendly?

 In short, because the validation process is energy-intensive, competitive, and rewards-based, it is unlikely that Bitcoin will reduce its energy footprint. Even after the last bitcoin is rewarded, the network will still require large amounts of electricity to validate transactions.

 How Much of Crypto is Renewable?

 There is currently not enough official information available to determine how much of the energy consumed by cryptocurrencies is from renewable sources.

 Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.

 Article Sources
 Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

 1. University of Cambridge Judge Business School. "Cambridge Bitcoin Electricity Consumption Index."

 2. Digiconomist. "Bitcoin Electronic Waste Monitor."

 3. University of Cambridge, Cambridge Centre for Alternative Finance. "Cambridge Bitcoin Electricity Consumption Index: Comparisons."

 4. Digiconomist. "Bitcoin Energy Consumption Index."

 5. Digiconomist. "Ethereum Energy Consumption Index."

 6. CoinMarketCap. "Today's Cryptocurrency Prices by Market Cap."

 7. Center for Strategic and International Studies. "How Is China’s Energy Footprint Changing?"

 8. University of Cambridge, Cambridge Centre for Alternative Finance. "Bitcoin Mining Map."

 9. U.S. Energy Information Administration. "United States."

 10. U.S. Energy Information Administration. "Kazakhstan."

 11. The Ethereum Foundation. "Ethereum's Energy Usage Will Soon Decrease by ~99.95%."

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Many people are bullish about cryptocurrencies like Bitcoin, but detractors point to a major flaw—cryptocurrency mining is highly energy-intensive. While mining is just one method available to validate cryptocurrency transactions and mint new crypto coins, it's the method used by Bitcoin and Ethereum, the two leading cryptocurrencies.
Keep reading to find out how much energy is used by cryptocurrency mining, and understand the other environmental impacts of cryptocurrency. Learn about alternatives to crypto mining that use much less energy.
Key Takeaways
 Bitcoin and other proof-of-work cryptocurrencies require large amounts of energy—more than is used by entire countries—to perform the work associated with crypto mining. The largest country for Bitcoin mining is the United States, which accounts for 37.84% of Bitcoin mining activities. Nearly 38 kilotons of electronic waste are annually produced as a byproduct of Bitcoin mining. Some cryptocurrencies do not use mining, but Bitcoin is unlikely to change its consensus algorithm.  
Bitcoin Mining Explained
 Cryptocurrency Energy Consumption 
There is no direct way to calculate how much energy is used for Bitcoin and cryptocurrency mining, but the figure can be estimated from the network's hashrate and the consumption by commercially-available mining rigs. For example, the Cambridge Bitcoin Electricity Consumption Index estimates that Bitcoin, the most widely-mined cryptocurrency network, used an estimated 85 Terawatt-hours (TWh) of electricity (0.38% of global electricity use) and about 218 TWh of energy (0.13% of global energy production) at the point of production—more than Belgium and Finland, using the latest country energy estimates from 2019.
Another estimate by Digiconomist, a cryptocurrency analytics site, places the figure at 130.3 Terawatt-hours, based on energy consumption through July 9, 2022. This computes to around 1,455.8 kilowatt-hours of electricity per transaction, the same amount of power consumed by the average American household over 49.9 days.
Ethereum, the second-largest cryptocurrency network, was estimated to use 62.77 Terawatt-hours of electricity per year, based on energy consumption through July 9, 2022. The average Ethereum transaction required 163 kilowatt-hours of electricity. However, since Ethereum rolled out its proof of work upgrade in September 2022, electrical energy requirements have dropped to 0.01 TWh per year, with one transaction using 0.03 kWh.
More than 20,000 different cryptocurrencies and over 500 exchanges exist worldwide. None of the cryptocurrency energy use reports or calculations account for the energy expended to develop new coins or administer services for them.
The amount of energy consumed by cryptocurrency mining will likely vary over time, assuming that prices and user adoption continue to vary. Cryptocurrency mining is a competitive process: as the value of the block reward increases, the incentives to start mining also go up. Higher cryptocurrency prices mean more energy being consumed by crypto networks.
 Why Cryptocurrency Mining Requires Energy 
The energy intensity of crypto mining is a feature, not a bug. Bitcoin mining is the automated process of validating Bitcoin transactions without the intervention of trusted third parties like banks.
The way the transaction validation process is designed uses large amounts of energy—the network depends on the computational power of thousands of mining machines. This dependency maintains the security of cryptocurrency blockchains that use proof-of-work consensus.
 Environmental Impacts of Cryptocurrency Mining 
Calculating the carbon footprint of cryptocurrency is more complicated. Although fossil fuels are the predominant energy source in most countries where cryptocurrency is mined, miners must seek out the most inexpensive energy sources to remain profitable.
Digiconomist estimates that the Bitcoin network is responsible for about 73 million tons of carbon dioxide per year—equal to the amounts generated by Turkmenistan. Based on data through September 2022, Ethereum produced an estimated 35.4 million tons of carbon dioxide emissions before dropping to 0.01 million tons following its transition to proof of work.
 Countries With the Largest Impact 
Researchers at the University of Cambridge report that most Bitcoin mining occurs in the U.S., China, and Kazakhstan. According to the Center for Strategic and International Studies, about 76% of the energy consumed in China is generated from coal and crude oil. China's percent of the global hash rate is 21%.
About 38% of mining takes place in the U.S. The U.S. gets most of its electricity by burning fossil fuels, per 2019 data from the EIA. Kazakhstan accounts for 13% of the world's Bitcoin mining and mainly uses fossil fuels.
As a result, three countries heavily dependent on fossil fuels are responsible for around 72% of the world's Bitcoin mining.
 Electronic Waste 
Cryptocurrency mining also generates significant electronic waste, as mining hardware quickly becomes obsolete. This is especially true for Application-Specific Integrated Circuit (ASIC) miners, which are specialized machines designed for mining the most popular cryptocurrencies. According to Digiconomist, the Bitcoin network generates approximately 38 thousand tons of electronic waste annually.
 Could Cryptocurrency Mining Use Less Energy? 
Large-scale cryptocurrency miners are often located where energy is abundant, reliable, and cheap. But processing cryptocurrency transactions and minting new coins does not need to be energy-intensive.
The proof-of-stake (PoS) method of validating cryptocurrency transactions and minting new coins is an alternative to cryptocurrency mining that does not use extensive computing power. The authority to validate transactions and operate the crypto network is instead granted based on the amount of cryptocurrency that a validator has "staked" or agreed not to trade or sell.
Other methods of validation, such as proof of history, proof of elapsed time, proof of burn, and proof of capacity, are also being developed. While Ethereum's developers have retired the blockchain's proof-of-work mechanism—with estimates calling for a 99.9% reduction in carbon emissions—there is no such objective in the Bitcoin community. Since Bitcoin is the most popular crypto, it means that mining, along with its enormous energy costs, is likely here to stay.
Is Cryptocurrency Environmentally Friendly?
Some cryptocurrencies have intense energy requirements, special equipment needs and generate lots of waste. In that sense, some are not environmentally friendly; However, it's important to remember the environmental costs of gathering natural resources and expending energy and electricity to make and maintain fiat currency and our current banking system.
Can Bitcoin Become Environmentally Friendly?
In short, because the validation process is energy-intensive, competitive, and rewards-based, it is unlikely that Bitcoin will reduce its energy footprint. Even after the last bitcoin is rewarded, the network will still require large amounts of electricity to validate transactions.
How Much of Crypto is Renewable?
There is currently not enough official information available to determine how much of the energy consumed by cryptocurrencies is from renewable sources.
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.
What's the Environmental Impact of Cryptocurrency?
https://www.investopedia.com/tech/whats-environmental-impact-cryptocurrency/
https://www.brookings.edu/opinions/five-myths-about-cryptocurrency/
Five myths about cryptocurrency
2021-05-24
Eswar Prasad
<div><div>
	<p>Bitcoin, the original cryptocurrency, was launched in 2009. Today, there are thousands of cryptocurrencies with a <a href="https://coinmarketcap.com/">total value</a> of about $2 trillion. The surge in their prices earlier this year <a href="https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html">minted</a> tens of thousands of cryptocurrency millionaires—at least on paper. Cryptocurrencies might turn out to be a massive speculative bubble that ends up hurting many naive investors. Indeed, many cryptocurrency fortunes have already evaporated with the recent <a href="https://www.washingtonpost.com/business/2021/05/19/cryptocurrency-bitcoin-selloff/?itid=lk_inline_manual_1usiness/2021/05/19/cryptocurrency-bitcoin-selloff/?itid=lk_inline_manual_1">plunge in prices</a>. But whatever their ultimate fate, the ingenious technological innovations underpinning them will transform the nature of money and finance.</p>
	
<h2>Myth No. 1</h2>
<h3><strong>A cryptocurrency is real money that can be used for payments.</strong></h3>
<p>Cryptocurrencies such as bitcoin and Ethereum were designed as a way to make payments without relying on traditional modes such as currency notes, debit cards, credit cards or checks. The bitcoin <a href="https://bitcoin.org/bitcoin.pdf">white paper</a>, which set off the cryptocurrency revolution, envisions an electronic payment system that allows “any two willing parties to transact directly with each other without the need for a trusted third party,” cutting governments and banks out of the financial loop. The website Pymnts <a href="https://www.pymnts.com/blockchain/2021/the-future-of-payments-is-blockchain/#:~:text=It%20is%20all%20about%20the,faster%2C%20more%20secure%20and%20decentralized.">claims</a>, “Blockchain IS the future of the payments industry,” a reference to the computational technology that undergirds cryptocurrencies.</p>
<p>In fact, it has become very expensive and slow to conduct transactions using cryptocurrencies. It takes about <a href="https://www.bitcoin.com/get-started/how-bitcoin-transactions-work/">10 minutes</a> for a bitcoin transaction to be validated, and the <a href="https://bitinfocharts.com/comparison/bitcoin-transactionfees.html">average fee</a> for just one transaction was recently about $20. Ethereum, the second-largest cryptocurrency, processes transactions slightly faster but also has <a href="https://ycharts.com/indicators/ethereum_average_transaction_fee">high fees</a>.</p>
<p>Moreover, <a href="https://coinmarketcap.com/currencies/bitcoin/">wild swings</a> in the values of most cryptocurrencies make them unreliable as a means of payment. In late April, the price of a Dogecoin was 20 cents. It tripled in the next two weeks and then fell to half that peak value ten days later. It is as though a $10 bill could buy you just a cup of coffee one day and a lavish meal at a fancy restaurant just a few weeks later. Even on a calmer, more typical day, the value of a major cryptocurrency such as Ethereum might fluctuate by 10 percent or more, making it too unstable to be practical. Recently, Elon Musk announced that Tesla <a href="https://www.washingtonpost.com/business/2021/05/19/cryptocurrency-bitcoin-selloff/?itid=lk_inline_manual_1nation/2021/05/13/bitcoin-tesla-elon-musk-climate/?itid=lk_inline_manual_9">would no longer accept bitcoin</a> as a form of payment, reversing a policy it had implemented earlier in the year. The value of a single coin almost immediately plummeted. A Chinese <a href="https://www.ft.com/content/c4c29bb3-c8ee-454c-a2dd-eac9f644007f">crackdown</a> on cryptocurrencies then briefly took another one-third off the price in just one day.</p>
<h2>Myth No. 2</h2>
<h3><strong>Cryptocurrencies are a good investment.</strong></h3>
<p>Investment funds in bitcoin and other cryptocurrencies have proliferated. Even <a href="https://news.yahoo.com/goldman-sachs-offers-bitcoin-derivatives-200048988.html">major banks</a> such as Goldman Sachs and Morgan Stanley are getting into the game. And you would certainly have made a <a href="https://www.cryptocurrencychart.com/top-return-on-investment/year">fantastic return</a> if you had bought any of the major cryptocurrencies last year. A <a href="https://www.fool.com/investing/2021/05/15/bitcoin-vs-ethereum-vs-dogecoin-which-one-is-right/">typical article</a> in the Motley Fool debates not whether cryptocurrencies are a good investment but “which one is right for you.” The website Business Mole <a href="http://www.businessmole.com/7-reasons-you-should-start-investing-in-cryptocurrency-and-securities/">claims</a>: “Even with adjustments made, Bitcoin and Ethereum are very profitable. It’s simple.”</p>
<p>But beware. Part of the allure seems to be that, like gold, the supply of most cryptocurrencies is tightly controlled (by the computer programs that manage them). For instance, about 18.5 million bitcoin have been <a href="https://www.blockchain.com/charts/total-bitcoins">created so far</a>, and there will eventually be a maximum of 21 million bitcoin. This is a cap set by the computer program that manages the supply of the currency.</p>
<p>Scarcity by itself is not, however, enough to create value—there has to be demand. Since cryptocurrencies cannot easily be used to make most payments and have no other intrinsic uses, the only reason they have value is because many people seem to think they are good investments. If that changed, their value could quickly drop to nothing.</p>
<h2>Myth No. 3</h2>
<h3><strong>Bitcoin is fading. Meme coins are the future.</strong></h3>
<p>Bitcoin is <a href="https://www.techrepublic.com/article/theres-more-to-cryptocurrency-than-bitcoin-5-other-digital-coins-to-consider/">now seen</a> as the granddaddy of cryptocurrencies, and investors (or speculators, more precisely) are piling into other cryptocurrencies such as Dogecoin. In 2019, <a href="https://www.investopedia.com/why-bitcoin-s-market-power-is-fading-as-crypto-ecosystem-matures-4773205">Investopedia claimed</a> that bitcoin was “losing its power as the driving force of the cryptocurrency world.” “<a href="https://www.forbes.com/sites/billybambrough/2021/04/16/bitcoin-and-ethereum-are-being-left-in-the-dust-by-dogecoin-as-the-memecoin-price-suddenly-rockets-300/?sh=41d636a93a91">Bitcoin And Ethereum Are Being Left In The Dust By Dogecoin</a>,” reads a recent Forbes headline.</p>
<p><a href="https://dogecoin.com/">Dogecoin</a> and other such cryptocurrencies, which are simply built around memes (Dogecoin, with its Shiba Inu dog mascot, references the “doge” meme), don’t even make a pretense of being usable in financial transactions. And there is no clear constraint on the supply of these coins, so their prices surge or crash on random events such as <a href="https://www.msn.com/en-us/autos/news/dogecoin-surges-after-elon-musk-hints-tesla-could-accept-the-meme-coin-as-payment/ar-BB1gBc8d">tweets from Musk</a>. The valuations of meme currencies seem to be based entirely on the <a href="http://bogan.dyson.cornell.edu/doc/Hartford/Bogan-9_GreaterFools.pdf">“greater fool” theory</a>—all you need to do to profit from your investment is to find an even greater fool willing to pay a higher price than you paid for the digital coins.</p>
<p>Bitcoin’s technology does seem outdated compared with some of the <a href="https://investorplace.com/2021/02/crypto-better-than-bitcoin-6-other-cryptocurrencies-you-should-consider/">newer cryptocurrencies</a> that enable greater anonymity for users, faster transaction processing and more sophisticated technical features that facilitate automatic processing of complex financial transactions. For all its flaws, however, bitcoin remains <a href="https://coinmarketcap.com/">dominant</a>: It accounts for nearly half of the total value of all cryptocurrencies.</p>
<h2>Myth No. 4</h2>
<h3><strong>Cryptocurrencies will displace the dollar.</strong></h3>
<p>Morgan Stanley’s chief global strategist, Ruchir Sharma, has <a href="https://www.ft.com/content/ea33b688-12e0-459c-80c5-2efba58e6f1a">argued</a> that bitcoin could end the dollar’s reign—or at least that the “digital currency poses a significant threat to [the] greenback’s supremacy.” A Financial Times headline proposes, even more ominously, that “<a href="https://www.ft.com/content/16a37710-cbff-41b1-af96-7dc8b2de0c43">Bitcoin’s rise reflects America’s decline</a>.”</p>
<p>Cryptocurrencies are not backed by anything other than the faith of the people who own them. The dollar, by contrast, is backed by the U.S. government. Investors still trust the dollar, even in hard times. As one illustration, domestic and foreign investors continue to eagerly snap up <a href="https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124">trillions of dollars in U.S. Treasury securities</a> even at low interest rates.</p>
<p>New cryptocurrencies called <a href="https://www.coindesk.com/what-are-stablecoins">stablecoins</a> aim to have stable values and therefore make it easier to conduct digital payments. Facebook plans to issue its own cryptocurrency, called <a href="https://www.diem.com/en-us/">Diem</a>, that will be backed one for one with U.S. dollars, giving it a stable value. But the value of stablecoins comes precisely from their backing by government-issued currencies. So while dollars might become less important in making payments, the primacy of the U.S. dollar as a store of value will not be challenged.</p>
<h2>Myth No. 5</h2>
<h3><strong>Cryptocurrencies are just a fad and will fade away</strong>.</h3>
<p>Warren Buffett <a href="https://markets.businessinsider.com/currencies/news/warren-buffett-best-quotes-bitcoin-cryptocurrencies-investing-rat-poison-squared-2021-1-1029974898">has</a> compared cryptocurrencies to the 17th-century Dutch tulip craze, while Bank of England Governor Andrew Bailey <a href="https://www.msn.com/en-us/money/other/boe-e2-80-99s-bailey-says-only-buy-crypto-if-ready-to-lose-it-all/ar-BB1gqwaU">cautioned</a>, “Buy them only if you’re prepared to lose all your money.” Economist Nouriel Roubini <a href="https://www.cnbc.com/2018/10/11/roubini-bitcoin-is-mother-of-all-scams.html">called</a> bitcoin “the mother or father of all scams” and even criticized its underlying technology.</p>
<p>Cryptocurrencies may or may not persevere as speculative investment vehicles, but they are triggering <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674258440">transformative changes to money and finance</a>. As the technology matures, stablecoins will hasten the ascendance of digital payments, ushering out paper currency. The prospect of competition from such private currencies has prodded central banks around the world to design <a href="https://www.cnbc.com/2021/04/19/central-bank-digital-currency-is-the-next-major-financial-disruptor.html">digital versions</a> of their currencies. The Bahamas has already rolled out a central bank digital currency, while countries like China, Japan and Sweden are conducting experiments with their own official digital money. The dollar bills in your wallet—if you still have any—could soon become relics.</p>
<p>Even transactions such as buying a car or a house could soon be managed through <a href="https://corporatefinanceinstitute.com/resources/knowledge/deals/smart-contracts/">computer programs</a> run on cryptocurrency platforms. Digital tokens representing money and other assets could ease electronic transactions that involve transfers of assets and payments, often without trusted third parties such as real estate settlement attorneys. Governments will still be needed to enforce contractual obligations and property rights, but software could someday take the place of other intermediaries, including bankers, accountants and lawyers.</p>
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 Op-Ed

 Five myths about cryptocurrency

 Eswar Prasad Monday, May 24, 2021
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 Editor's Note:

 This op-ed was originally published by The Washington Post.

 Bitcoin, the original cryptocurrency, was launched in 2009. Today, there are thousands of cryptocurrencies with a total value of about $2 trillion. The surge in their prices earlier this year minted tens of thousands of cryptocurrency millionaires—at least on paper. Cryptocurrencies might turn out to be a massive speculative bubble that ends up hurting many naive investors. Indeed, many cryptocurrency fortunes have already evaporated with the recent plunge in prices. But whatever their ultimate fate, the ingenious technological innovations underpinning them will transform the nature of money and finance.

 Eswar Prasad

 Senior Fellow - Global Economy and Development

 EswarSPrasad

 Myth No. 1

 A cryptocurrency is real money that can be used for payments.

 Cryptocurrencies such as bitcoin and Ethereum were designed as a way to make payments without relying on traditional modes such as currency notes, debit cards, credit cards or checks. The bitcoin white paper, which set off the cryptocurrency revolution, envisions an electronic payment system that allows “any two willing parties to transact directly with each other without the need for a trusted third party,” cutting governments and banks out of the financial loop. The website Pymnts claims, “Blockchain IS the future of the payments industry,” a reference to the computational technology that undergirds cryptocurrencies.

 In fact, it has become very expensive and slow to conduct transactions using cryptocurrencies. It takes about 10 minutes for a bitcoin transaction to be validated, and the average fee for just one transaction was recently about $20. Ethereum, the second-largest cryptocurrency, processes transactions slightly faster but also has high fees.

 Moreover, wild swings in the values of most cryptocurrencies make them unreliable as a means of payment. In late April, the price of a Dogecoin was 20 cents. It tripled in the next two weeks and then fell to half that peak value ten days later. It is as though a $10 bill could buy you just a cup of coffee one day and a lavish meal at a fancy restaurant just a few weeks later. Even on a calmer, more typical day, the value of a major cryptocurrency such as Ethereum might fluctuate by 10 percent or more, making it too unstable to be practical. Recently, Elon Musk announced that Tesla would no longer accept bitcoin as a form of payment, reversing a policy it had implemented earlier in the year. The value of a single coin almost immediately plummeted. A Chinese crackdown on cryptocurrencies then briefly took another one-third off the price in just one day.

 Myth No. 2

 Cryptocurrencies are a good investment.

 Investment funds in bitcoin and other cryptocurrencies have proliferated. Even major banks such as Goldman Sachs and Morgan Stanley are getting into the game. And you would certainly have made a fantastic return if you had bought any of the major cryptocurrencies last year. A typical article in the Motley Fool debates not whether cryptocurrencies are a good investment but “which one is right for you.” The website Business Mole claims: “Even with adjustments made, Bitcoin and Ethereum are very profitable. It’s simple.”

 But beware. Part of the allure seems to be that, like gold, the supply of most cryptocurrencies is tightly controlled (by the computer programs that manage them). For instance, about 18.5 million bitcoin have been created so far, and there will eventually be a maximum of 21 million bitcoin. This is a cap set by the computer program that manages the supply of the currency.

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 Scarcity by itself is not, however, enough to create value—there has to be demand. Since cryptocurrencies cannot easily be used to make most payments and have no other intrinsic uses, the only reason they have value is because many people seem to think they are good investments. If that changed, their value could quickly drop to nothing.

 Myth No. 3

 Bitcoin is fading. Meme coins are the future.

 Bitcoin is now seen as the granddaddy of cryptocurrencies, and investors (or speculators, more precisely) are piling into other cryptocurrencies such as Dogecoin. In 2019, Investopedia claimed that bitcoin was “losing its power as the driving force of the cryptocurrency world.” “Bitcoin And Ethereum Are Being Left In The Dust By Dogecoin,” reads a recent Forbes headline.

 Dogecoin and other such cryptocurrencies, which are simply built around memes (Dogecoin, with its Shiba Inu dog mascot, references the “doge” meme), don’t even make a pretense of being usable in financial transactions. And there is no clear constraint on the supply of these coins, so their prices surge or crash on random events such as tweets from Musk. The valuations of meme currencies seem to be based entirely on the “greater fool” theory—all you need to do to profit from your investment is to find an even greater fool willing to pay a higher price than you paid for the digital coins.

 Bitcoin’s technology does seem outdated compared with some of the newer cryptocurrencies that enable greater anonymity for users, faster transaction processing and more sophisticated technical features that facilitate automatic processing of complex financial transactions. For all its flaws, however, bitcoin remains dominant: It accounts for nearly half of the total value of all cryptocurrencies.

 Myth No. 4

 Cryptocurrencies will displace the dollar.

 Morgan Stanley’s chief global strategist, Ruchir Sharma, has argued that bitcoin could end the dollar’s reign—or at least that the “digital currency poses a significant threat to [the] greenback’s supremacy.” A Financial Times headline proposes, even more ominously, that “Bitcoin’s rise reflects America’s decline.”

 Cryptocurrencies are not backed by anything other than the faith of the people who own them. The dollar, by contrast, is backed by the U.S. government. Investors still trust the dollar, even in hard times. As one illustration, domestic and foreign investors continue to eagerly snap up trillions of dollars in U.S. Treasury securities even at low interest rates.

 New cryptocurrencies called stablecoins aim to have stable values and therefore make it easier to conduct digital payments. Facebook plans to issue its own cryptocurrency, called Diem, that will be backed one for one with U.S. dollars, giving it a stable value. But the value of stablecoins comes precisely from their backing by government-issued currencies. So while dollars might become less important in making payments, the primacy of the U.S. dollar as a store of value will not be challenged.

 Myth No. 5

 Cryptocurrencies are just a fad and will fade away.

 Warren Buffett has compared cryptocurrencies to the 17th-century Dutch tulip craze, while Bank of England Governor Andrew Bailey cautioned, “Buy them only if you’re prepared to lose all your money.” Economist Nouriel Roubini called bitcoin “the mother or father of all scams” and even criticized its underlying technology.

 Cryptocurrencies may or may not persevere as speculative investment vehicles, but they are triggering transformative changes to money and finance. As the technology matures, stablecoins will hasten the ascendance of digital payments, ushering out paper currency. The prospect of competition from such private currencies has prodded central banks around the world to design digital versions of their currencies. The Bahamas has already rolled out a central bank digital currency, while countries like China, Japan and Sweden are conducting experiments with their own official digital money. The dollar bills in your wallet—if you still have any—could soon become relics.

 Even transactions such as buying a car or a house could soon be managed through computer programs run on cryptocurrency platforms. Digital tokens representing money and other assets could ease electronic transactions that involve transfers of assets and payments, often without trusted third parties such as real estate settlement attorneys. Governments will still be needed to enforce contractual obligations and property rights, but software could someday take the place of other intermediaries, including bankers, accountants and lawyers.

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Bitcoin, the original cryptocurrency, was launched in 2009. Today, there are thousands of cryptocurrencies with a total value of about $2 trillion. The surge in their prices earlier this year minted tens of thousands of cryptocurrency millionaires—at least on paper. Cryptocurrencies might turn out to be a massive speculative bubble that ends up hurting many naive investors. Indeed, many cryptocurrency fortunes have already evaporated with the recent plunge in prices. But whatever their ultimate fate, the ingenious technological innovations underpinning them will transform the nature of money and finance.
	
Myth No. 1
 A cryptocurrency is real money that can be used for payments. 
Cryptocurrencies such as bitcoin and Ethereum were designed as a way to make payments without relying on traditional modes such as currency notes, debit cards, credit cards or checks. The bitcoin white paper, which set off the cryptocurrency revolution, envisions an electronic payment system that allows “any two willing parties to transact directly with each other without the need for a trusted third party,” cutting governments and banks out of the financial loop. The website Pymnts claims, “Blockchain IS the future of the payments industry,” a reference to the computational technology that undergirds cryptocurrencies.
In fact, it has become very expensive and slow to conduct transactions using cryptocurrencies. It takes about 10 minutes for a bitcoin transaction to be validated, and the average fee for just one transaction was recently about $20. Ethereum, the second-largest cryptocurrency, processes transactions slightly faster but also has high fees.
Moreover, wild swings in the values of most cryptocurrencies make them unreliable as a means of payment. In late April, the price of a Dogecoin was 20 cents. It tripled in the next two weeks and then fell to half that peak value ten days later. It is as though a $10 bill could buy you just a cup of coffee one day and a lavish meal at a fancy restaurant just a few weeks later. Even on a calmer, more typical day, the value of a major cryptocurrency such as Ethereum might fluctuate by 10 percent or more, making it too unstable to be practical. Recently, Elon Musk announced that Tesla would no longer accept bitcoin as a form of payment, reversing a policy it had implemented earlier in the year. The value of a single coin almost immediately plummeted. A Chinese crackdown on cryptocurrencies then briefly took another one-third off the price in just one day.
Myth No. 2
 Cryptocurrencies are a good investment. 
Investment funds in bitcoin and other cryptocurrencies have proliferated. Even major banks such as Goldman Sachs and Morgan Stanley are getting into the game. And you would certainly have made a fantastic return if you had bought any of the major cryptocurrencies last year. A typical article in the Motley Fool debates not whether cryptocurrencies are a good investment but “which one is right for you.” The website Business Mole claims: “Even with adjustments made, Bitcoin and Ethereum are very profitable. It’s simple.”
But beware. Part of the allure seems to be that, like gold, the supply of most cryptocurrencies is tightly controlled (by the computer programs that manage them). For instance, about 18.5 million bitcoin have been created so far, and there will eventually be a maximum of 21 million bitcoin. This is a cap set by the computer program that manages the supply of the currency.
Scarcity by itself is not, however, enough to create value—there has to be demand. Since cryptocurrencies cannot easily be used to make most payments and have no other intrinsic uses, the only reason they have value is because many people seem to think they are good investments. If that changed, their value could quickly drop to nothing.
Myth No. 3
 Bitcoin is fading. Meme coins are the future. 
Bitcoin is now seen as the granddaddy of cryptocurrencies, and investors (or speculators, more precisely) are piling into other cryptocurrencies such as Dogecoin. In 2019, Investopedia claimed that bitcoin was “losing its power as the driving force of the cryptocurrency world.” “Bitcoin And Ethereum Are Being Left In The Dust By Dogecoin,” reads a recent Forbes headline.
 Dogecoin and other such cryptocurrencies, which are simply built around memes (Dogecoin, with its Shiba Inu dog mascot, references the “doge” meme), don’t even make a pretense of being usable in financial transactions. And there is no clear constraint on the supply of these coins, so their prices surge or crash on random events such as tweets from Musk. The valuations of meme currencies seem to be based entirely on the “greater fool” theory—all you need to do to profit from your investment is to find an even greater fool willing to pay a higher price than you paid for the digital coins.
Bitcoin’s technology does seem outdated compared with some of the newer cryptocurrencies that enable greater anonymity for users, faster transaction processing and more sophisticated technical features that facilitate automatic processing of complex financial transactions. For all its flaws, however, bitcoin remains dominant: It accounts for nearly half of the total value of all cryptocurrencies.
Myth No. 4
 Cryptocurrencies will displace the dollar. 
Morgan Stanley’s chief global strategist, Ruchir Sharma, has argued that bitcoin could end the dollar’s reign—or at least that the “digital currency poses a significant threat to [the] greenback’s supremacy.” A Financial Times headline proposes, even more ominously, that “Bitcoin’s rise reflects America’s decline.”
Cryptocurrencies are not backed by anything other than the faith of the people who own them. The dollar, by contrast, is backed by the U.S. government. Investors still trust the dollar, even in hard times. As one illustration, domestic and foreign investors continue to eagerly snap up trillions of dollars in U.S. Treasury securities even at low interest rates.
New cryptocurrencies called stablecoins aim to have stable values and therefore make it easier to conduct digital payments. Facebook plans to issue its own cryptocurrency, called Diem, that will be backed one for one with U.S. dollars, giving it a stable value. But the value of stablecoins comes precisely from their backing by government-issued currencies. So while dollars might become less important in making payments, the primacy of the U.S. dollar as a store of value will not be challenged.
Myth No. 5
 Cryptocurrencies are just a fad and will fade away.
Warren Buffett has compared cryptocurrencies to the 17th-century Dutch tulip craze, while Bank of England Governor Andrew Bailey cautioned, “Buy them only if you’re prepared to lose all your money.” Economist Nouriel Roubini called bitcoin “the mother or father of all scams” and even criticized its underlying technology.
Cryptocurrencies may or may not persevere as speculative investment vehicles, but they are triggering transformative changes to money and finance. As the technology matures, stablecoins will hasten the ascendance of digital payments, ushering out paper currency. The prospect of competition from such private currencies has prodded central banks around the world to design digital versions of their currencies. The Bahamas has already rolled out a central bank digital currency, while countries like China, Japan and Sweden are conducting experiments with their own official digital money. The dollar bills in your wallet—if you still have any—could soon become relics.
Even transactions such as buying a car or a house could soon be managed through computer programs run on cryptocurrency platforms. Digital tokens representing money and other assets could ease electronic transactions that involve transfers of assets and payments, often without trusted third parties such as real estate settlement attorneys. Governments will still be needed to enforce contractual obligations and property rights, but software could someday take the place of other intermediaries, including bankers, accountants and lawyers.
Five myths about cryptocurrency
https://www.brookings.edu/opinions/five-myths-about-cryptocurrency/
https://www.nasdaq.com/articles/understanding-the-wealth-creating-power-of-cryptocurrency
Understanding the Wealth-Creating Power of Cryptocurrency
2022-06-09
InvestorPlace
<div><div>
<p><a href="https://investorplace.com?utm_source=Nasdaq&amp;utm_medium=referral">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a></p><p>Well, one thing is for sure: Nothing is going to be the same in the crypto market after this year.</p>
<p>Perhaps the most jarring example of the bearish crypto market this year has been the complete collapse of <b>Terra </b>(<b>LUNA</b>).</p><p>
	Source: StockCharts
</p><p>As you can see, it’s not pretty. The coin lost 98% of its value or around $40 billion, in a matter of hours.</p><p>While this drop was shocking for a lot of crypto investors (and rightfully so), it just goes to show that value destruction can happen to even the biggest cryptos out there.</p><p>The sister token to <strong>TerraUSD</strong> (<strong>UST</strong>) – an algorithmic stablecoin pegged the U.S. Dollar – exposed a major fault within the crypto industry: under-collateralization.</p><p>However, my team and I don’t see this as fault. Instead, we see it as an opportunity of what to look for and what to avoid.</p>
<p>I firmly believe cryptos and blockchain in general represent some of the most promising innovations of our time. But just like the internet before it, this shift won’t happen overnight.</p><p>Long-term, I am extremely bullish on cryptocurrencies. But this cryptocurrency bubble must reach its natural conclusion the same way the dot-com boom of 2000 did — with an enormous crash.</p><p>While this may be the beginnings of “the big one” for cryptocurrencies, this crash isn’t the end. It’s far from it.</p><h3>The Cryptocurrency Revolution Has Begun</h3><p>This is <strong>the beginning of the Cryptocurrency Revolution</strong>. It’s the end of bad cryptos just built on hype and the emergence of strong ones made with world-changing tech.</p><p>We have strong cause to believe this, including using Gartner’s “Hype Cycle.” It teaches us that new technologies go through five phases:</p>
<ol><li><strong>Technology Trigger — </strong>A new breakthrough technology emerges. New companies are born. Early VC investors pour money into those businesses. And a small wave of early adopters take advantage of this new tech.</li>
<li><strong>Peak of Inflated Expectations — </strong>Mass media coverage begins. Tons of new companies emerge, all hoping to capitalize on the trend. Everyone starts hyping up the tech as the “next big thing.” And more and more mainstream folks begin hopping on board.</li>
<li><strong>Trough of Disillusionment — </strong>First-generation products based on the tech disappoint. New companies start to fail. The media talks about those failures. The hype train fades, and new VC money comes into the space as sky-high expectations crash down.</li>
<li><strong>Slope of Enlightenment — </strong>The mainstream media forgets about the new tech. But the companies that remain work to finetune it and develop second- and third-generation products with much clearer value props and use cases.</li>
<li><strong>Plateau of Productivity — </strong>The masses begin using the tech. And the companies in the space enter a prolonged period of durable growth.</li>
</ol><p>The stages are represented graphically in the following chart.</p><p>We believe cryptos are somewhere in the “Peak of Inflated Expectations” phase. Big-name cryptocurrencies will begin to fail, and the mainstream media will begin writing about these failures.</p><p>Over the coming months to years, we’ll enter the “Trough of Disillusionment.” This is where thousands of cryptos will fail. And several hundred billion dollars of value will be wiped out.</p><p>Investors who are smart here <strong>will make millions</strong>.</p><h3>Big Money’s Emergence</h3><p>After the Trough of Disillusionment comes the Slope of Entitlement, swiftly followed by the Plateau of Productivity. The big money is made in these phases.</p><p>There, the wheat is separated from the chaff, and true visionaries and innovators in a new technology emerge.</p>
<p>During the internet era, this durable growth phase started in 2003. In that time, companies like <strong>Amazon</strong> (NASDAQ:<strong><a href="https://investorplace.com/stock-quotes/amzn-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>AMZN</strong></a></strong>), <strong>Netflix</strong> (NASDAQ:<strong><a href="https://investorplace.com/stock-quotes/nflx-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>NFLX</strong></a></strong>), Facebook and <strong>Alphabet</strong> (NASDAQ:<strong><a href="https://investorplace.com/stock-quotes/googl-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>GOOGL</strong></a></strong>) used the internet to create second- and third-generation products and services that would go on to change the world.</p><p>Cryptos will follow the same path.</p><p>You could do a lot worse than buying Bitcoin at this price. But there’s a much bigger opportunity at hand…</p><p>Indeed, you could do <strong>much better</strong> in several of Bitcoin’s smaller cryptocurrency “cousins.”</p><p>In fact, there are a handful of very small coins that could soar more than 31 times that of Bitcoin.</p><p>That’s right. If you’re poised to make $10,000 in BTC, you could make 31 times that — $310,000 — in its tiny cousins.</p>
<p>Or if you’re poised to make $100,000 in BTC, you could make $3.1 million instead.</p><p>The million-dollar question is: <strong>What are the best cryptocurrencies to buy today that have enormous long-term upside potential?</strong> These are the ones that could help you achieve total financial freedom in a very short time.</p><p>I urge you to learn about this huge story. I’ll teach you about the transformative technology of altcoins. And I’ll share how to leverage this undercurrent of cryptocurrency innovation to set yourself up for life-changing returns.</p><h3>Cryptocurrency Offers the Fastest Legal Way to Get Rich</h3><p>Right now, there’s a fuse being lit under the altcoin market. And it’ll set off one of the largest explosions of wealth in modern history. People who invest modest stakes in altcoins will make millions of dollars.</p><p>To truly realize the magnitude of this opportunity, you must understand that altcoins are different than how most perceive them.</p>
<p>These assets aren’t “fantasy internet money.” And many are about to skyrocket thousands of percent.</p><p>They’re investments in one of the most valuable, most revolutionary technologies ever created.</p><p>And they’ll generate a <strong>multi-trillion-dollar</strong> tsunami of wealth for their owners.</p><p>Remember; the underlying technology behind Bitcoin and altcoins is the <strong>blockchain</strong>.</p><p>You can think of cryptocurrency and the blockchain like a virtual ledger.</p>
<p>But I prefer to say blockchain technologies are just really, really, really valuable software programs.</p><p>Now, if you’ve paid attention to the stock market over the past 30 years, you should be ready to jump out of your chair and buy altcoins with both hands right now.</p><p>That’s because software programs are the oil of the 21st century. They are one of the greatest forces for wealth creation on Earth.</p><p>In the 20th century, the discovery of oil deposits around the world minted millionaires faster than anyone could count.</p><p>It was one of the fastest, biggest accumulations of wealth in history. People went from being broke to having more money than their grandkids could ever spend virtually overnight.</p>
<h3>Wealth Creation on Steroids</h3><p>When I say software programs are of the greatest forces for wealth creation, I’m not talking about conventional wealth creation. That takes 30 years to save up $1 million.</p><p>I’m talking about wealth creation on steroids, where Investors can make $30 million in one year. I know that sounds outlandish, but let’s look at the amazing facts right in front of us.</p><p>Bill Gates became one of the world’s richest men because of software programs. Just think about the <strong>Microsoft</strong> (NASDAQ:<strong><a href="https://investorplace.com/stock-quotes/msft-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>MSFT</strong></a></strong>) spreadsheet program we call “Excel.”</p><p>How much time did Excel save the human race — a billion years, 10 billion years?</p><p>Excel is now the world’s most popular spreadsheet program. By allowing us to automate calculations and financial analysis, it has saved us incredible amounts of time. We no longer have to do single calculations by hand.</p>
<p>One person running Excel can do the work of a million accountants from days past.</p><p>Software programs have incredible power. And it’s spread across all industries.</p><h3>Software’s Far Reach</h3><p>Over the past 30 years, software programs have created an explosion of efficiency and human productivity. Great software can help you make smart business decisions, find travel deals, talk to loved ones, and get a cheap ride home.</p><p>It has massively improved our ability to communicate, share information, complete transactions, and gather and analyze data.</p><p>Think about health care, education, transportation, manufacturing, energy production, food production, retail, banking, you name it. Computer programs have allowed us to do it all much more efficiently.</p>
<p>Good software has saved us so much time, money and frustration. It’s no wonder it’s kicked off one of the largest, fastest accumulations of wealth in human history.</p><p>In 1986, computer program leader Microsoft went public. Shares are up more than 1,185% since then.</p><p>Computer program leader <strong>Oracle</strong> (NYSE:<a href="https://investorplace.com/stock-quotes/orcl-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>ORCL</strong></a>) went public in 1986 as well. Oracle founder Larry Ellison is one of the world’s richest people, worth over $90 billion.</p><p>In 1998, Larry Page and Sergey Brin founded Google and created the world’s most valuable search engine program. Both are now worth more than $90 billion each. And their early backers made billions, as well.</p><p>Software programs have become the world’s ultimate wealth creators. That’s because we all place enormous value on their ability to save us time and headaches. And it’s also because they’ve made us <strong>massively</strong> more productive.</p>
<p>Which brings me to my million-dollar point.</p><p>Blockchain technology is about to unleash an epic new wave of computer program wealth.</p><p>Real altcoins aren’t anything like “fantasy internet money,” as they’re portrayed in the press. Investments in the best of them are investments in the next generation of revolutionary software programs.</p><h3>Blockchain: A Transformational Technology Taking Shape</h3><p>Big picture, blockchain allows for disintermediation across all industries. It’s arguably the most disruptive technology since the internet. And at its core is its centralized and immutable ledger.</p><p>This ledger enables innately untrustworthy entities to create trustworthy systems, all without the need for any central authority.</p><p>Blockchain enables folks to remove the middleman from legacy systems and replace them with a collective ledger.</p>
<p>Now… why would we do that? Because middlemen are often unnecessary profit-takers.</p><p>Further, they’re sometimes subject to corruption (see: the financial crisis of ‘08).</p><p>By removing and replacing them with an automated and incorruptible technology, we can make today’s systems and processes cheaper, faster, and more trustworthy.</p><h3>Huge Potential Underlying Cryptocurrency and the Blockchain</h3><p>The applications here are theoretically infinite. One that Wall Street is currently drooling over is decentralized finance (DeFi). With cryptocurrency, we can create a new era of finance that doesn’t involve big banks as profit-taking intermediaries.</p><p>And DeFi is the future.</p><p>After all, it’s intended to disintermediate banks, like <strong>Goldman Sachs</strong> (NYSE:<strong><a href="https://investorplace.com/stock-quotes/gs-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>GS</strong></a></strong>), <strong>JPMorgan</strong> (NYSE:<strong><a href="https://investorplace.com/stock-quotes/jpm-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>JPM</strong></a></strong>), and <strong>Wells Fargo</strong> (NYSE:<strong><a href="https://investorplace.com/stock-quotes/wfc-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>WFC</strong></a></strong>). Those are multi-hundred-billion-dollar companies. The disruption opportunity is huge.</p>
<p>But there’s a much, much bigger opportunity in disintermediating technology titans like Alphabet and Amazon, who are trillion-dollar companies.</p><p>That’s why I love the idea of “dApps,” or decentralized applications.</p><p>DApps are software applications built on the blockchain. And this can be anything. Think a video media application like YouTube, a driver-rider app like <strong>Uber</strong> (NYSE:<strong><a href="https://investorplace.com/stock-quotes/uber-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>UBER</strong></a></strong>), a music streaming app like <strong>Spotify</strong> (NYSE:<strong><a href="https://investorplace.com/stock-quotes/spot-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>SPOT</strong></a></strong>).</p><p>These apps are coded on the blockchain. And therefore, there’s no central authority that “runs” and profits from the app, either via subscription sales or digital ads. By removing that central authority, dApps create a new generation of truly free software applications.</p><p>Oftentimes, these dApps have underlying cryptocurrencies. They’re used as a form of in-app currency or incentive token for developers and blockchain participants.</p>
<p>The appreciating value for these cryptos represents the economic value of the dApp. Instead of developers profiting from digital ad sales, they make money by owning the dApp’s cryptocurrency. And that rises in value as more folks use the platform.</p><p>I firmly believe that dApps will disrupt everything. The future YouTubes, Ubers and Spotifys will be dApps. In fact, most, if not all, apps in the future will be dApps.</p><h3>The Final Word on Cryptocurrency</h3><p>During the internet craze of the late ‘90s and early aughts, the companies that succeeded did something very simple.</p><p>They didn’t reinvent the wheel or create brand-new industries.</p><p>They just <strong>digitized what was already working</strong> in the physical world.</p><p>Malls were working. So, Amazon digitized malls and turned into the “digital mall.”</p>
<p>Movie theaters were working. So, Netflix digitized movie theaters and turned into the “digital movie theater.”</p><p>The “winning playbook” in the dot-com boom was astoundingly simple. Find something that’s working in the physical economy and digitize it.</p><p>And the “winning playbook” in the Cryptocurrency Boom will be equally simple. Find something that’s working in the digital economy and decentralize it. The cryptocurrencies that do <strong>this</strong> the best will turn into 100X investment opportunities over the next decade.</p><p>When you shift your perspective on altcoins, you realize that they’re not fantasy internet money. They’re investments in systems that make our lives easier, more productive, and more efficient.</p><p>Investing in the best altcoins now is like taking an early stake in <strong>Adobe </strong>(NASDAQ:<strong><a href="https://investorplace.com/stock-quotes/adbe-stock-quote/?utm_source=Nasdaq&amp;utm_medium=referral"><strong>ADBE</strong></a></strong>) in 1998. It created the hugely popular “PDF” program. And the stock has soared 3,809% since then.</p>
<p>That’s why we’ll be holding an <a href="https://signup.investorplace.com/?cid=MKT639400&amp;eid=MKT642395">emergency briefing</a> on <strong>June 14 at 7 p.m. Eastern</strong>. We’ll discuss how the phenomenon plaguing the crypto markets recently could spark the minting of a new wave of millionaires.</p><p>Despite all the negative headlines we’ve been seeing, a new day is dawning. And a select few off-the-radar coins will emerge as the new leaders of the cryptocurrency markets.</p><p>If you want to get ahead of this phenomenon, <a href="https://signup.investorplace.com/?cid=MKT639400&amp;eid=MKT642395">sign up for my free Crypto in Crisis event now!</a></p>
<p>On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.	</p><p>The post <a href="https://investorplace.com/hypergrowthinvesting/2022/06/understanding-the-wealth-creating-power-of-cryptocurrency/?utm_source=Nasdaq&amp;utm_medium=referral">Understanding the Wealth-Creating Power of Cryptocurrency</a> appeared first on <a href="https://investorplace.com?utm_source=Nasdaq&amp;utm_medium=referral">InvestorPlace</a>.</p>
<p>The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.</p>
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 Understanding the Wealth-Creating Power of Cryptocurrency

 June 09, 2022 — 03:08 pm EDT

 Written by Luke Lango for InvestorPlace ->

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 InvestorPlace - Stock Market News, Stock Advice & Trading Tips

 Well, one thing is for sure: Nothing is going to be the same in the crypto market after this year.

 Perhaps the most jarring example of the bearish crypto market this year has been the complete collapse of Terra (LUNA).

 Source: StockCharts

 As you can see, it’s not pretty. The coin lost 98% of its value or around $40 billion, in a matter of hours.

 While this drop was shocking for a lot of crypto investors (and rightfully so), it just goes to show that value destruction can happen to even the biggest cryptos out there.

 The sister token to TerraUSD (UST) – an algorithmic stablecoin pegged the U.S. Dollar – exposed a major fault within the crypto industry: under-collateralization.

 However, my team and I don’t see this as fault. Instead, we see it as an opportunity of what to look for and what to avoid.

 I firmly believe cryptos and blockchain in general represent some of the most promising innovations of our time. But just like the internet before it, this shift won’t happen overnight.

 Long-term, I am extremely bullish on cryptocurrencies. But this cryptocurrency bubble must reach its natural conclusion the same way the dot-com boom of 2000 did — with an enormous crash.

 While this may be the beginnings of “the big one” for cryptocurrencies, this crash isn’t the end. It’s far from it.

 The Cryptocurrency Revolution Has Begun

 This is the beginning of the Cryptocurrency Revolution. It’s the end of bad cryptos just built on hype and the emergence of strong ones made with world-changing tech.

 We have strong cause to believe this, including using Gartner’s “Hype Cycle.” It teaches us that new technologies go through five phases:

 1. Technology Trigger — A new breakthrough technology emerges. New companies are born. Early VC investors pour money into those businesses. And a small wave of early adopters take advantage of this new tech.
 2. Peak of Inflated Expectations — Mass media coverage begins. Tons of new companies emerge, all hoping to capitalize on the trend. Everyone starts hyping up the tech as the “next big thing.” And more and more mainstream folks begin hopping on board.
 3. Trough of Disillusionment — First-generation products based on the tech disappoint. New companies start to fail. The media talks about those failures. The hype train fades, and new VC money comes into the space as sky-high expectations crash down.
 4. Slope of Enlightenment — The mainstream media forgets about the new tech. But the companies that remain work to finetune it and develop second- and third-generation products with much clearer value props and use cases.
 5. Plateau of Productivity — The masses begin using the tech. And the companies in the space enter a prolonged period of durable growth.

 The stages are represented graphically in the following chart.

 We believe cryptos are somewhere in the “Peak of Inflated Expectations” phase. Big-name cryptocurrencies will begin to fail, and the mainstream media will begin writing about these failures.

 Over the coming months to years, we’ll enter the “Trough of Disillusionment.” This is where thousands of cryptos will fail. And several hundred billion dollars of value will be wiped out.

 Investors who are smart here will make millions.

 Big Money’s Emergence

 After the Trough of Disillusionment comes the Slope of Entitlement, swiftly followed by the Plateau of Productivity. The big money is made in these phases.

 There, the wheat is separated from the chaff, and true visionaries and innovators in a new technology emerge.

 During the internet era, this durable growth phase started in 2003. In that time, companies like Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), Facebook and Alphabet (NASDAQ:GOOGL) used the internet to create second- and third-generation products and services that would go on to change the world.

 Cryptos will follow the same path.

 You could do a lot worse than buying Bitcoin at this price. But there’s a much bigger opportunity at hand…

 Indeed, you could do much better in several of Bitcoin’s smaller cryptocurrency “cousins.”

 In fact, there are a handful of very small coins that could soar more than 31 times that of Bitcoin.

 That’s right. If you’re poised to make $10,000 in BTC, you could make 31 times that — $310,000 — in its tiny cousins.

 Or if you’re poised to make $100,000 in BTC, you could make $3.1 million instead.

 The million-dollar question is: What are the best cryptocurrencies to buy today that have enormous long-term upside potential? These are the ones that could help you achieve total financial freedom in a very short time.

 I urge you to learn about this huge story. I’ll teach you about the transformative technology of altcoins. And I’ll share how to leverage this undercurrent of cryptocurrency innovation to set yourself up for life-changing returns.

 Cryptocurrency Offers the Fastest Legal Way to Get Rich

 Right now, there’s a fuse being lit under the altcoin market. And it’ll set off one of the largest explosions of wealth in modern history. People who invest modest stakes in altcoins will make millions of dollars.

 To truly realize the magnitude of this opportunity, you must understand that altcoins are different than how most perceive them.

 These assets aren’t “fantasy internet money.” And many are about to skyrocket thousands of percent.

 They’re investments in one of the most valuable, most revolutionary technologies ever created.

 And they’ll generate a multi-trillion-dollar tsunami of wealth for their owners.

 Remember; the underlying technology behind Bitcoin and altcoins is the blockchain.

 You can think of cryptocurrency and the blockchain like a virtual ledger.

 But I prefer to say blockchain technologies are just really, really, really valuable software programs.

 Now, if you’ve paid attention to the stock market over the past 30 years, you should be ready to jump out of your chair and buy altcoins with both hands right now.

 That’s because software programs are the oil of the 21st century. They are one of the greatest forces for wealth creation on Earth.

 In the 20th century, the discovery of oil deposits around the world minted millionaires faster than anyone could count.

 It was one of the fastest, biggest accumulations of wealth in history. People went from being broke to having more money than their grandkids could ever spend virtually overnight.

 Wealth Creation on Steroids

 When I say software programs are of the greatest forces for wealth creation, I’m not talking about conventional wealth creation. That takes 30 years to save up $1 million.

 I’m talking about wealth creation on steroids, where Investors can make $30 million in one year. I know that sounds outlandish, but let’s look at the amazing facts right in front of us.

 Bill Gates became one of the world’s richest men because of software programs. Just think about the Microsoft (NASDAQ:MSFT) spreadsheet program we call “Excel.”

 How much time did Excel save the human race — a billion years, 10 billion years?

 Excel is now the world’s most popular spreadsheet program. By allowing us to automate calculations and financial analysis, it has saved us incredible amounts of time. We no longer have to do single calculations by hand.

 One person running Excel can do the work of a million accountants from days past.

 Software programs have incredible power. And it’s spread across all industries.

 Software’s Far Reach

 Over the past 30 years, software programs have created an explosion of efficiency and human productivity. Great software can help you make smart business decisions, find travel deals, talk to loved ones, and get a cheap ride home.

 It has massively improved our ability to communicate, share information, complete transactions, and gather and analyze data.

 Think about health care, education, transportation, manufacturing, energy production, food production, retail, banking, you name it. Computer programs have allowed us to do it all much more efficiently.

 Good software has saved us so much time, money and frustration. It’s no wonder it’s kicked off one of the largest, fastest accumulations of wealth in human history.

 In 1986, computer program leader Microsoft went public. Shares are up more than 1,185% since then.

 Computer program leader Oracle (NYSE:ORCL) went public in 1986 as well. Oracle founder Larry Ellison is one of the world’s richest people, worth over $90 billion.

 In 1998, Larry Page and Sergey Brin founded Google and created the world’s most valuable search engine program. Both are now worth more than $90 billion each. And their early backers made billions, as well.

 Software programs have become the world’s ultimate wealth creators. That’s because we all place enormous value on their ability to save us time and headaches. And it’s also because they’ve made us massively more productive.

 Which brings me to my million-dollar point.

 Blockchain technology is about to unleash an epic new wave of computer program wealth.

 Real altcoins aren’t anything like “fantasy internet money,” as they’re portrayed in the press. Investments in the best of them are investments in the next generation of revolutionary software programs.

 Blockchain: A Transformational Technology Taking Shape

 Big picture, blockchain allows for disintermediation across all industries. It’s arguably the most disruptive technology since the internet. And at its core is its centralized and immutable ledger.

 This ledger enables innately untrustworthy entities to create trustworthy systems, all without the need for any central authority.

 Blockchain enables folks to remove the middleman from legacy systems and replace them with a collective ledger.

 Now… why would we do that? Because middlemen are often unnecessary profit-takers.

 Further, they’re sometimes subject to corruption (see: the financial crisis of ‘08).

 By removing and replacing them with an automated and incorruptible technology, we can make today’s systems and processes cheaper, faster, and more trustworthy.

 Huge Potential Underlying Cryptocurrency and the Blockchain

 The applications here are theoretically infinite. One that Wall Street is currently drooling over is decentralized finance (DeFi). With cryptocurrency, we can create a new era of finance that doesn’t involve big banks as profit-taking intermediaries.

 And DeFi is the future.

 After all, it’s intended to disintermediate banks, like Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), and Wells Fargo (NYSE:WFC). Those are multi-hundred-billion-dollar companies. The disruption opportunity is huge.

 But there’s a much, much bigger opportunity in disintermediating technology titans like Alphabet and Amazon, who are trillion-dollar companies.

 That’s why I love the idea of “dApps,” or decentralized applications.

 DApps are software applications built on the blockchain. And this can be anything. Think a video media application like YouTube, a driver-rider app like Uber (NYSE:UBER), a music streaming app like Spotify (NYSE:SPOT).

 These apps are coded on the blockchain. And therefore, there’s no central authority that “runs” and profits from the app, either via subscription sales or digital ads. By removing that central authority, dApps create a new generation of truly free software applications.

 Oftentimes, these dApps have underlying cryptocurrencies. They’re used as a form of in-app currency or incentive token for developers and blockchain participants.

 The appreciating value for these cryptos represents the economic value of the dApp. Instead of developers profiting from digital ad sales, they make money by owning the dApp’s cryptocurrency. And that rises in value as more folks use the platform.

 I firmly believe that dApps will disrupt everything. The future YouTubes, Ubers and Spotifys will be dApps. In fact, most, if not all, apps in the future will be dApps.

 The Final Word on Cryptocurrency

 During the internet craze of the late ‘90s and early aughts, the companies that succeeded did something very simple.

 They didn’t reinvent the wheel or create brand-new industries.

 They just digitized what was already working in the physical world.

 Malls were working. So, Amazon digitized malls and turned into the “digital mall.”

 Movie theaters were working. So, Netflix digitized movie theaters and turned into the “digital movie theater.”

 The “winning playbook” in the dot-com boom was astoundingly simple. Find something that’s working in the physical economy and digitize it.

 And the “winning playbook” in the Cryptocurrency Boom will be equally simple. Find something that’s working in the digital economy and decentralize it. The cryptocurrencies that do this the best will turn into 100X investment opportunities over the next decade.

 When you shift your perspective on altcoins, you realize that they’re not fantasy internet money. They’re investments in systems that make our lives easier, more productive, and more efficient.

 Investing in the best altcoins now is like taking an early stake in Adobe (NASDAQ:ADBE) in 1998. It created the hugely popular “PDF” program. And the stock has soared 3,809% since then.

 That’s why we’ll be holding an emergency briefing on June 14 at 7 p.m. Eastern. We’ll discuss how the phenomenon plaguing the crypto markets recently could spark the minting of a new wave of millionaires.

 Despite all the negative headlines we’ve been seeing, a new day is dawning. And a select few off-the-radar coins will emerge as the new leaders of the cryptocurrency markets.

 If you want to get ahead of this phenomenon, sign up for my free Crypto in Crisis event now!

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 On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

 The post Understanding the Wealth-Creating Power of Cryptocurrency appeared first on InvestorPlace.

 The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips  Well, one thing is for sure: Nothing is going to be the same in the crypto market after this year.
Perhaps the most jarring example of the bearish crypto market this year has been the complete collapse of Terra (LUNA). 
	Source: StockCharts
 As you can see, it’s not pretty. The coin lost 98% of its value or around $40 billion, in a matter of hours. While this drop was shocking for a lot of crypto investors (and rightfully so), it just goes to show that value destruction can happen to even the biggest cryptos out there. The sister token to TerraUSD (UST) – an algorithmic stablecoin pegged the U.S. Dollar – exposed a major fault within the crypto industry: under-collateralization. However, my team and I don’t see this as fault. Instead, we see it as an opportunity of what to look for and what to avoid.
I firmly believe cryptos and blockchain in general represent some of the most promising innovations of our time. But just like the internet before it, this shift won’t happen overnight. Long-term, I am extremely bullish on cryptocurrencies. But this cryptocurrency bubble must reach its natural conclusion the same way the dot-com boom of 2000 did — with an enormous crash. While this may be the beginnings of “the big one” for cryptocurrencies, this crash isn’t the end. It’s far from it. The Cryptocurrency Revolution Has Begun This is the beginning of the Cryptocurrency Revolution. It’s the end of bad cryptos just built on hype and the emergence of strong ones made with world-changing tech. We have strong cause to believe this, including using Gartner’s “Hype Cycle.” It teaches us that new technologies go through five phases:
  Technology Trigger — A new breakthrough technology emerges. New companies are born. Early VC investors pour money into those businesses. And a small wave of early adopters take advantage of this new tech.
 Peak of Inflated Expectations — Mass media coverage begins. Tons of new companies emerge, all hoping to capitalize on the trend. Everyone starts hyping up the tech as the “next big thing.” And more and more mainstream folks begin hopping on board.
 Trough of Disillusionment — First-generation products based on the tech disappoint. New companies start to fail. The media talks about those failures. The hype train fades, and new VC money comes into the space as sky-high expectations crash down.
 Slope of Enlightenment — The mainstream media forgets about the new tech. But the companies that remain work to finetune it and develop second- and third-generation products with much clearer value props and use cases.
 Plateau of Productivity — The masses begin using the tech. And the companies in the space enter a prolonged period of durable growth.
 The stages are represented graphically in the following chart. We believe cryptos are somewhere in the “Peak of Inflated Expectations” phase. Big-name cryptocurrencies will begin to fail, and the mainstream media will begin writing about these failures. Over the coming months to years, we’ll enter the “Trough of Disillusionment.” This is where thousands of cryptos will fail. And several hundred billion dollars of value will be wiped out. Investors who are smart here will make millions. Big Money’s Emergence After the Trough of Disillusionment comes the Slope of Entitlement, swiftly followed by the Plateau of Productivity. The big money is made in these phases. There, the wheat is separated from the chaff, and true visionaries and innovators in a new technology emerge.
During the internet era, this durable growth phase started in 2003. In that time, companies like Amazon (NASDAQ:  AMZN  ), Netflix (NASDAQ:  NFLX  ), Facebook and Alphabet (NASDAQ:  GOOGL  ) used the internet to create second- and third-generation products and services that would go on to change the world. Cryptos will follow the same path. You could do a lot worse than buying Bitcoin at this price. But there’s a much bigger opportunity at hand… Indeed, you could do much better in several of Bitcoin’s smaller cryptocurrency “cousins.” In fact, there are a handful of very small coins that could soar more than 31 times that of Bitcoin. That’s right. If you’re poised to make $10,000 in BTC, you could make 31 times that — $310,000 — in its tiny cousins.
Or if you’re poised to make $100,000 in BTC, you could make $3.1 million instead. The million-dollar question is: What are the best cryptocurrencies to buy today that have enormous long-term upside potential? These are the ones that could help you achieve total financial freedom in a very short time. I urge you to learn about this huge story. I’ll teach you about the transformative technology of altcoins. And I’ll share how to leverage this undercurrent of cryptocurrency innovation to set yourself up for life-changing returns. Cryptocurrency Offers the Fastest Legal Way to Get Rich Right now, there’s a fuse being lit under the altcoin market. And it’ll set off one of the largest explosions of wealth in modern history. People who invest modest stakes in altcoins will make millions of dollars. To truly realize the magnitude of this opportunity, you must understand that altcoins are different than how most perceive them.
These assets aren’t “fantasy internet money.” And many are about to skyrocket thousands of percent. They’re investments in one of the most valuable, most revolutionary technologies ever created. And they’ll generate a multi-trillion-dollar tsunami of wealth for their owners. Remember; the underlying technology behind Bitcoin and altcoins is the blockchain. You can think of cryptocurrency and the blockchain like a virtual ledger.
But I prefer to say blockchain technologies are just really, really, really valuable software programs. Now, if you’ve paid attention to the stock market over the past 30 years, you should be ready to jump out of your chair and buy altcoins with both hands right now. That’s because software programs are the oil of the 21st century. They are one of the greatest forces for wealth creation on Earth. In the 20th century, the discovery of oil deposits around the world minted millionaires faster than anyone could count. It was one of the fastest, biggest accumulations of wealth in history. People went from being broke to having more money than their grandkids could ever spend virtually overnight.
Wealth Creation on Steroids When I say software programs are of the greatest forces for wealth creation, I’m not talking about conventional wealth creation. That takes 30 years to save up $1 million. I’m talking about wealth creation on steroids, where Investors can make $30 million in one year. I know that sounds outlandish, but let’s look at the amazing facts right in front of us. Bill Gates became one of the world’s richest men because of software programs. Just think about the Microsoft (NASDAQ:  MSFT  ) spreadsheet program we call “Excel.” How much time did Excel save the human race — a billion years, 10 billion years? Excel is now the world’s most popular spreadsheet program. By allowing us to automate calculations and financial analysis, it has saved us incredible amounts of time. We no longer have to do single calculations by hand.
One person running Excel can do the work of a million accountants from days past. Software programs have incredible power. And it’s spread across all industries. Software’s Far Reach Over the past 30 years, software programs have created an explosion of efficiency and human productivity. Great software can help you make smart business decisions, find travel deals, talk to loved ones, and get a cheap ride home. It has massively improved our ability to communicate, share information, complete transactions, and gather and analyze data. Think about health care, education, transportation, manufacturing, energy production, food production, retail, banking, you name it. Computer programs have allowed us to do it all much more efficiently.
Good software has saved us so much time, money and frustration. It’s no wonder it’s kicked off one of the largest, fastest accumulations of wealth in human history. In 1986, computer program leader Microsoft went public. Shares are up more than 1,185% since then. Computer program leader Oracle (NYSE: ORCL ) went public in 1986 as well. Oracle founder Larry Ellison is one of the world’s richest people, worth over $90 billion. In 1998, Larry Page and Sergey Brin founded Google and created the world’s most valuable search engine program. Both are now worth more than $90 billion each. And their early backers made billions, as well. Software programs have become the world’s ultimate wealth creators. That’s because we all place enormous value on their ability to save us time and headaches. And it’s also because they’ve made us massively more productive.
Which brings me to my million-dollar point. Blockchain technology is about to unleash an epic new wave of computer program wealth. Real altcoins aren’t anything like “fantasy internet money,” as they’re portrayed in the press. Investments in the best of them are investments in the next generation of revolutionary software programs. Blockchain: A Transformational Technology Taking Shape Big picture, blockchain allows for disintermediation across all industries. It’s arguably the most disruptive technology since the internet. And at its core is its centralized and immutable ledger. This ledger enables innately untrustworthy entities to create trustworthy systems, all without the need for any central authority. Blockchain enables folks to remove the middleman from legacy systems and replace them with a collective ledger.
Now… why would we do that? Because middlemen are often unnecessary profit-takers. Further, they’re sometimes subject to corruption (see: the financial crisis of ‘08). By removing and replacing them with an automated and incorruptible technology, we can make today’s systems and processes cheaper, faster, and more trustworthy. Huge Potential Underlying Cryptocurrency and the Blockchain The applications here are theoretically infinite. One that Wall Street is currently drooling over is decentralized finance (DeFi). With cryptocurrency, we can create a new era of finance that doesn’t involve big banks as profit-taking intermediaries. And DeFi is the future. After all, it’s intended to disintermediate banks, like Goldman Sachs (NYSE:  GS  ), JPMorgan (NYSE:  JPM  ), and Wells Fargo (NYSE:  WFC  ). Those are multi-hundred-billion-dollar companies. The disruption opportunity is huge.
But there’s a much, much bigger opportunity in disintermediating technology titans like Alphabet and Amazon, who are trillion-dollar companies. That’s why I love the idea of “dApps,” or decentralized applications. DApps are software applications built on the blockchain. And this can be anything. Think a video media application like YouTube, a driver-rider app like Uber (NYSE:  UBER  ), a music streaming app like Spotify (NYSE:  SPOT  ). These apps are coded on the blockchain. And therefore, there’s no central authority that “runs” and profits from the app, either via subscription sales or digital ads. By removing that central authority, dApps create a new generation of truly free software applications. Oftentimes, these dApps have underlying cryptocurrencies. They’re used as a form of in-app currency or incentive token for developers and blockchain participants.
The appreciating value for these cryptos represents the economic value of the dApp. Instead of developers profiting from digital ad sales, they make money by owning the dApp’s cryptocurrency. And that rises in value as more folks use the platform. I firmly believe that dApps will disrupt everything. The future YouTubes, Ubers and Spotifys will be dApps. In fact, most, if not all, apps in the future will be dApps. The Final Word on Cryptocurrency During the internet craze of the late ‘90s and early aughts, the companies that succeeded did something very simple. They didn’t reinvent the wheel or create brand-new industries. They just digitized what was already working in the physical world. Malls were working. So, Amazon digitized malls and turned into the “digital mall.”
Movie theaters were working. So, Netflix digitized movie theaters and turned into the “digital movie theater.” The “winning playbook” in the dot-com boom was astoundingly simple. Find something that’s working in the physical economy and digitize it. And the “winning playbook” in the Cryptocurrency Boom will be equally simple. Find something that’s working in the digital economy and decentralize it. The cryptocurrencies that do this the best will turn into 100X investment opportunities over the next decade. When you shift your perspective on altcoins, you realize that they’re not fantasy internet money. They’re investments in systems that make our lives easier, more productive, and more efficient. Investing in the best altcoins now is like taking an early stake in Adobe (NASDAQ:  ADBE  ) in 1998. It created the hugely popular “PDF” program. And the stock has soared 3,809% since then.
That’s why we’ll be holding an emergency briefing on June 14 at 7 p.m. Eastern. We’ll discuss how the phenomenon plaguing the crypto markets recently could spark the minting of a new wave of millionaires. Despite all the negative headlines we’ve been seeing, a new day is dawning. And a select few off-the-radar coins will emerge as the new leaders of the cryptocurrency markets. If you want to get ahead of this phenomenon, sign up for my free Crypto in Crisis event now! 
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.	 The post Understanding the Wealth-Creating Power of Cryptocurrency appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Understanding the Wealth-Creating Power of Cryptocurrency
https://www.nasdaq.com/articles/understanding-the-wealth-creating-power-of-cryptocurrency
https://icoholder.com/blog/how-to-make-money-with-cryptocurrency/
10 No-Brainer Ways of How to Make Money With Cryptocurrency
2018-12-13
ICOholder
<div><div><p>Everyone gets into the cryptocurrency field to make money, but not all end up doing that. A lot of people either simply give up along the way or fall into some sort trap with the rising cases of crypto scams.</p><p>Truth be told, there are quite a handful of methods you can make <a href="https://icoholder.com/blog/how-to-make-money-with-bitcoin/">legitimate money with cryptocurrencies</a> other than the obvious way of trading. We, therefore, decided to explore some of the proven ways of how to make money with cryptocurrency; we found quite a few, but be assured that you’ll find them very impressive.</p><p>Without further ado, below are 10 ways to make money with cryptocurrency today.</p><h2><strong>Way#1. <a href="https://icoholder.com/en/l/gyb7b">Buy</a> and HODL</strong></h2><p>This is the most common <a href="https://icoholder.com/blog/how-to-earn-bitcoins-fast/">way of earning money from cryptocurrencies</a>. Most investors buy coins such as <a href="https://icoholder.com/en/l/gyb7b">Bitcoin</a>, Litecoin, <a href="https://icoholder.com/en/l/gyb7b">Ethereum</a>, Ripple, and more and wait until their value rise. Once their market prices rise, they sell at a profit.</p><p>This investing strategy requires one to identify more stable and volatile assets that can shift in value rapidly, resulting in regular profits. Assets such as <a href="https://icoholder.com/en/l/gyb7b">Bitcoin</a> and <a href="https://icoholder.com/en/l/gyb7b">Ethereum</a> have been known to maintain regular price fluctuations; they can, therefore, be considered a safe investment in this regard. However, you’re welcomed to trade any asset you feel is going to rise in value; all you need to do is to analyze each asset you invest in before committing to <a href="https://www.investopedia.com/terms/h/hodl.asp">HODLing</a> it.</p><p>Also, you don’t need to buy the most expensive assets for you to make profits. There are thousands of small altcoins that have decent price shifts; consider having a mix of all coins that have a promising future value and are not just popular in the exchanges.</p><h2><strong>Way#2. Earn Cryptocurrency Dividends</strong></h2><p><a href="https://icoholder.com/en/l/gyb7b"></a></p><p>Did you know that you can buy cryptos and hold them for the dividend? Well, there are a number of coins that will get you paid for simply buying and holding their digital assets. The best thing about these coins paying a dividend to holders is you don’t even have to stake them, especially in a wallet. </p><p>A few examples of coins that pay out dividends include COSS, CEFF, NEO, KUCOIN, and more.</p><p>Just like the conventional stocks, not all of these coins, are suitable for your portfolio; you’ll need to analyze and pick out what seems to align with your investment objectives.</p><h3><strong>Way#3. Run Cryptocurrency Master Nodes</strong></h3><p>What is a crypto <a href="https://www.investopedia.com/terms/m/master-node-cryptocurrency.asp">master node</a>?</p><p>These are full nodes that motivate operators of the various nodes to execute their roles in operating a blockchain. In other words, a master node is a cryptocurrency full node or computer wallet that maintains a real-time record of a blockchain’s activities.</p><p>The idea behind master nodes is a bit technical in nature, but below is a simplified explanation:</p><p>Running crypto master nodes is one of the most popular ways of earning passive income in this space. But how exactly do you make money from this?</p><p>Allow me…</p><p>Many cryptocurrencies pay node operators to maintain a real-time record of their activities on their native blockchains. Since the process is complex and requires one to maintain a certain minimum number of coins under their master nodes, crypto platforms prefer outsourcing the service to master node operators at a fee. </p><p>Examples of proof of stake cryptos that have master nodes include DASH and PIVX.</p><h2><strong>Way#4. Stake Cryptos</strong></h2><p>This is another method of earning money from cryptocurrencies; it offers a double earning potential through price appreciation and dividend payout from selected coins for <a href="https://www.investopedia.com/terms/p/proof-stake-pos.asp">staking</a> (or proof-of-stake) their digital assets.</p><p>Staking involves holding coins in a live wallet, thus allowing you to <a href="https://www.creditdonkey.com/how-to-stake-ethereum.html">earn additional coins</a> for securing that particular crypto network.</p><p>Some examples of coins that can be staked include NAV Coin, PIVX, Neblio, Decred, and many more.</p><h2><b>Way#5. Day Trading</b></h2><p>More than 80% of cryptocurrency investors believe that the only effective way (if not the only way) to earn money in this space is through <a href="https://www.merriam-webster.com/dictionary/day%20trader">day trading</a>. </p><p>But what most of them don’t know is that day trading is more than just holding an asset until its value rises; it takes a lot to be a day trader, but most importantly, you need to have the proper analytical and technical skills. </p><p>You’ll need to analyze market charts on the performance of the listed assets; this is perhaps the most involving way of earning from cryptos but I believe one of the most rewarding.</p><p>You can start day trading on any exchange today; all you need to do is to sign up, buy some assets, analyze, and you’re all set.</p><p>You an also start trading through an automatic trading platform like <a href="https://learnbonds.com/bitcoin-profit">bitcoin profit</a>  which allows users to decipher the signals emitted by the trends on bitcoin and other cryptocurrencies and start perform successful small trader.</p><p>Tip: If you’re going to be a day trader, consider mastering the art of analyzing stocks using the <a href="https://www.investopedia.com/ask/answers/difference-between-fundamental-and-technical-analysis/">technical and fundamental methods</a>; they are widely used to evaluate all traded assets.</p><h2><b>Way#6. Help Out with Cryptocurrency Microtasks</b></h2><p>If you have extra time, you can also do some small tasks for individuals or cryptocurrency platforms and get paid for it. The tasks can widely vary; it could be apps testing, adverts viewing, taking surveys, watching videos, and more. </p><p>You can get microtasks from sites such as <a href="https://icoholder.com/en/l/gyb7b">Bitcoin</a>s Rewards, Coinbucks, or Bituro.</p><h2><b></b></h2><h2><b>Way#7. Work for Cryptocurrency Companies</b></h2><p>This is a common way of earning from the sector. Anyone can work for a cryptocurrency company at any capacity; you can be a digital marketer, content creator, web designer, among other things. All you have to do is to identify their needs and show them how your skills can help solve a problem. </p><p>The best thing about working for crypto platforms is that you’re likely to work remotely, allowing you to benefit from the flexibility of working from your own space.</p><p>Other than that, most crypto firms offer very competitive packages, and if you happen to come by a chance to work with any legit ones, don’t hesitate to take up the opportunity.</p><p>Below are a few examples of platforms that pay in digital assets for services rendered:</p><ul><li>Coinality</li><li>bitWAGE</li><li>Jobsfor<a href="https://icoholder.com/en/l/gyb7b">Bitcoin</a></li><li>Angle.co</li><li>XBTFreelancer</li><li>Coinworker</li><li>21.co</li></ul><p>These companies offer their compensation in terms of cryptos; this, therefore, means that the value of your earnings can more than double in value within days if not hours.</p><h2><b>Way#8. Crypto Arbitrage</b></h2><p>The cryptocurrency sector is largely unregulated; this has resulted in a lot of variations in terms of assets valuation, pricing of products, and so on. Most exchanges decide for themselves the prices their assets at are listed, and this has brought avoid the difference in the volatility and liquidity of assets. If well researched, one can make a kill from these price variations through buying from cheap sources and selling on overpriced exchanges. This is pretty much what describes arbitrage.</p><p>If you get your act together, you can find anything between 5% – 30% in price spreads across various exchanges. Consider signing up on various platforms and compare asset prices to find any meaningful variations to capitalize on.</p><h2><b>Way#9. Cryptocurrency Faucets</b></h2><p>Crypto faucets are not that popular, but a very viable mean of income generating. <a href="https://icoholder.com/en/l/gyb7b">Bitcoin</a> faucets are the most popular ones and they are basically a reward system that runs in the form of a website or application that offers rewards to qualified users in form of a Satoshi. A Satoshi is a hundredth of a millionth BTC; a reward awarded for completing a task such as a capture or any other as may be required by the application or website.</p><p>The tasks may also be in form of fun activities such as playing games, watching videos, viewing certain ads. Each task that’s accomplished earns you a small portion of <a href="https://icoholder.com/en/l/gyb7b">Bitcoin</a>. You may need to complete quite a number of tasks to be able to make any tangible income from cryptocurrency faucets.</p><p>You can check out some faucets right <a href="https://faucethub.io/faucets/BTC">here</a>.</p><h2><b> Way#10. Create Cryptocurrency Content</b></h2><p>Over the last decade, content has become one of the most effective ways of communicating any message to your existing or potential clients. If you need to launch a new product or services, content is the best way to do that.</p><p>The crypto sector, especially, relies on content marketing a lot due to the fact that most projects are virtual. It may, therefore, not be possible to use conventional marketing ways to reach the target audience. And this is where the opportunity lies; you can  create video content, infographics, or written content for various cryptocurrency brands.</p><p>Some of the websites that offer regular gigs for content creators in the cryptocurrency space include Yours, Y’alls, and Steemit.</p><h2><b>Bonus: Way#11</b></h2><p>Incorporate cryptocurrency as one of your payment methods</p><p>If you’re a merchant, you stand a chance of earning handsomely from accepting crypto payments. Statistics show that some cryptos have risen in market value within a day by 1000s in percentage increase, very few investments make it to 100% in years.</p><p>All you need to do is to identify the best channel for accepting crypto payments; here are a few to get you started:</p><ul><li>CoinBank</li><li>BitPay</li><li>CoinGate</li><li>SpectroCoin</li></ul><p>…and more.</p><h2><b>Conclusion</b></h2><p>So, can you make money with cryptocurrency? Well, there, you now have your answer.</p><p>You now have 11 ways of how to make money with cryptocurrency; try the ones that work for you and see their impact. </p><p>And if you’ve tried any of the above mentioned or different ways, please share with us in the comments section.</p></div>||||I|||| BTC: $23024.1 (-1.2%)
 ETH: $1637.6 (-1.6%)
 Market Cap: $1068.5B (-1.4%)
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 How to Make Money with Cryptocurrency – 10 Easy Ways

 How to Make Money with Cryptocurrency – 10 Easy Ways

 Everyone gets into the cryptocurrency field to make money, but not all end up doing that. A lot of people either simply give up along the way or fall into some sort trap with the rising cases of crypto scams.

 Truth be told, there are quite a handful of methods you can make legitimate money with cryptocurrencies other than the obvious way of trading. We, therefore, decided to explore some of the proven ways of how to make money with cryptocurrency; we found quite a few, but be assured that you’ll find them very impressive.

 Without further ado, below are 10 ways to make money with cryptocurrency today.

 Way#1. Buy and HODL

 This is the most common way of earning money from cryptocurrencies . Most investors buy coins such as Bitcoin , Litecoin, Ethereum , Ripple, and more and wait until their value rise. Once their market prices rise, they sell at a profit.

 This investing strategy requires one to identify more stable and volatile assets that can shift in value rapidly, resulting in regular profits. Assets such as Bitcoin and Ethereum have been known to maintain regular price fluctuations; they can, therefore, be considered a safe investment in this regard. However, you’re welcomed to trade any asset you feel is going to rise in value; all you need to do is to analyze each asset you invest in before committing to HODLing it.

 Also, you don’t need to buy the most expensive assets for you to make profits. There are thousands of small altcoins that have decent price shifts; consider having a mix of all coins that have a promising future value and are not just popular in the exchanges.

 Way#2. Earn Cryptocurrency Dividends

 Did you know that you can buy cryptos and hold them for the dividend? Well, there are a number of coins that will get you paid for simply buying and holding their digital assets. The best thing about these coins paying a dividend to holders is you don’t even have to stake them, especially in a wallet.

 A few examples of coins that pay out dividends include COSS, CEFF, NEO, KUCOIN, and more.

 Just like the conventional stocks, not all of these coins, are suitable for your portfolio; you’ll need to analyze and pick out what seems to align with your investment objectives.

 Way#3. Run Cryptocurrency Master Nodes

 What is a crypto master node ?

 These are full nodes that motivate operators of the various nodes to execute their roles in operating a blockchain. In other words, a master node is a cryptocurrency full node or computer wallet that maintains a real-time record of a blockchain’s activities.

 The idea behind master nodes is a bit technical in nature, but below is a simplified explanation:

 Buying Shares, and 'Interest-Bearing Accounts' of the Future | DASH: Detailed" width="780" height="439" src="https://www.youtube.com/embed/4GRrLiTCq5M?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen>

 Running crypto master nodes is one of the most popular ways of earning passive income in this space. But how exactly do you make money from this?

 Allow me…

 Many cryptocurrencies pay node operators to maintain a real-time record of their activities on their native blockchains. Since the process is complex and requires one to maintain a certain minimum number of coins under their master nodes, crypto platforms prefer outsourcing the service to master node operators at a fee.

 Examples of proof of stake cryptos that have master nodes include DASH and PIVX.

 Way#4. Stake Cryptos

 This is another method of earning money from cryptocurrencies; it offers a double earning potential through price appreciation and dividend payout from selected coins for staking (or proof-of-stake) their digital assets.

 Staking involves holding coins in a live wallet, thus allowing you to earn additional coins for securing that particular crypto network.

 Some examples of coins that can be staked include NAV Coin, PIVX, Neblio, Decred, and many more.

 Way#5. Day Trading

 More than 80% of cryptocurrency investors believe that the only effective way (if not the only way) to earn money in this space is through day trading .

 But what most of them don’t know is that day trading is more than just holding an asset until its value rises; it takes a lot to be a day trader, but most importantly, you need to have the proper analytical and technical skills.

 You’ll need to analyze market charts on the performance of the listed assets; this is perhaps the most involving way of earning from cryptos but I believe one of the most rewarding.

 You can start day trading on any exchange today; all you need to do is to sign up, buy some assets, analyze, and you’re all set.

 You an also start trading through an automatic trading platform like bitcoin profit which allows users to decipher the signals emitted by the trends on bitcoin and other cryptocurrencies and start perform successful small trader.

 Tip: If you’re going to be a day trader, consider mastering the art of analyzing stocks using the technical and fundamental methods ; they are widely used to evaluate all traded assets.

 Way#6. Help Out with Cryptocurrency Microtasks

 If you have extra time, you can also do some small tasks for individuals or cryptocurrency platforms and get paid for it. The tasks can widely vary; it could be apps testing, adverts viewing, taking surveys, watching videos, and more.

 You can get microtasks from sites such as Bitcoin s Rewards, Coinbucks, or Bituro.

 Way#7. Work for Cryptocurrency Companies

 This is a common way of earning from the sector. Anyone can work for a cryptocurrency company at any capacity; you can be a digital marketer, content creator, web designer, among other things. All you have to do is to identify their needs and show them how your skills can help solve a problem.

 The best thing about working for crypto platforms is that you’re likely to work remotely, allowing you to benefit from the flexibility of working from your own space.

 Other than that, most crypto firms offer very competitive packages, and if you happen to come by a chance to work with any legit ones, don’t hesitate to take up the opportunity.

 Below are a few examples of platforms that pay in digital assets for services rendered:

 * Coinality
 * bitWAGE
 * Jobsfor Bitcoin
 * Angle.co
 * XBTFreelancer
 * Coinworker
 * 21.co

 These companies offer their compensation in terms of cryptos; this, therefore, means that the value of your earnings can more than double in value within days if not hours.

 Way#8. Crypto Arbitrage

 The cryptocurrency sector is largely unregulated; this has resulted in a lot of variations in terms of assets valuation, pricing of products, and so on. Most exchanges decide for themselves the prices their assets at are listed, and this has brought avoid the difference in the volatility and liquidity of assets. If well researched, one can make a kill from these price variations through buying from cheap sources and selling on overpriced exchanges. This is pretty much what describes arbitrage.

 If you get your act together, you can find anything between 5% – 30% in price spreads across various exchanges. Consider signing up on various platforms and compare asset prices to find any meaningful variations to capitalize on.

 Way#9. Cryptocurrency Faucets

 Crypto faucets are not that popular, but a very viable mean of income generating. Bitcoin faucets are the most popular ones and they are basically a reward system that runs in the form of a website or application that offers rewards to qualified users in form of a Satoshi. A Satoshi is a hundredth of a millionth BTC; a reward awarded for completing a task such as a capture or any other as may be required by the application or website.

 The tasks may also be in form of fun activities such as playing games, watching videos, viewing certain ads. Each task that’s accomplished earns you a small portion of Bitcoin . You may need to complete quite a number of tasks to be able to make any tangible income from cryptocurrency faucets.

 You can check out some faucets right here .

 Way#10. Create Cryptocurrency Content

 Over the last decade, content has become one of the most effective ways of communicating any message to your existing or potential clients. If you need to launch a new product or services, content is the best way to do that.

 The crypto sector, especially, relies on content marketing a lot due to the fact that most projects are virtual. It may, therefore, not be possible to use conventional marketing ways to reach the target audience. And this is where the opportunity lies; you can create video content, infographics, or written content for various cryptocurrency brands.

 Some of the websites that offer regular gigs for content creators in the cryptocurrency space include Yours, Y’alls, and Steemit.

 Bonus: Way#11

 Incorporate cryptocurrency as one of your payment methods

 If you’re a merchant, you stand a chance of earning handsomely from accepting crypto payments. Statistics show that some cryptos have risen in market value within a day by 1000s in percentage increase, very few investments make it to 100% in years.

 All you need to do is to identify the best channel for accepting crypto payments; here are a few to get you started:

 * CoinBank
 * BitPay
 * CoinGate
 * SpectroCoin

 …and more.

 Conclusion

 So, can you make money with cryptocurrency? Well, there, you now have your answer.

 You now have 11 ways of how to make money with cryptocurrency; try the ones that work for you and see their impact.

 And if you’ve tried any of the above mentioned or different ways, please share with us in the comments section.

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 45 Comments

 1. Ethereum USD Live Price
 September 8, 2020 at 9:02 am

 Fantastic blog post. Really helpful tips to Make Money with Cryptocurrency. Thanks for sharing

 Reply
 1. Smith Williams
 July 6, 2021 at 11:24 pm

 Wonderful tips. You can recovery your stolen bitcoins or funds with the help of remotespytech (at) g-m-a-I-l.. What a remarkable service, help in times of need

 Reply
 2. Cindy
 February 11, 2021 at 3:38 am

 What is #1 HODL and how do I do it? Credibility of your article is pretty weak if you can’t even spell..

 Reply
 1. Chad
 March 2, 2021 at 10:55 pm

 Cindy. Sorry to break it to you. But YOU are the fool here. There are no misspellings here whatsoever. HODL is a ubiquitous term now acronym that stands for “Hold On for Dear Life. Years ago a crypto trader was writing to someone quickly telling them to buy Bitcoin and hold it until the price increases. In his haste HE misspelled the word hold , hodl. This funny mistake gave birth to HODL, which 99% of anyone who knows crypto has already heard of before. You my dear are the rare 1% who apparently have not.

 Reply
 1. Bevels
 April 4, 2021 at 12:03 am

 Cindy went awfully quiet :’-()

 Reply
 2. Philip
 April 26, 2021 at 9:47 am

 I figured it out myself, and I never heard the term, for sure I heard Hold ,Buy and Hold stocks etc. Better to ask ,Was that a mistake? Instead of being arrogant; there is much to learn about Crypto,I’m finding out , (:

 Reply
 2. Anya Foxx
 October 15, 2021 at 5:55 am

 Its an intentional misspelling of hold, but it means Hold On for Dear Life.. meaning don’t sell at the first sign of profit.

 Reply
 3. Richard
 October 20, 2021 at 1:09 am

 Are you slow?

 Reply
 4. Kalpesh
 December 1, 2021 at 5:00 am

 HODL is a term derived from a misspelling of “hold” that refers to buy-and-hold strategies in the context of bitcoin and other cryptocurrencies.

 Reply
 5. Rooshl
 January 2, 2022 at 4:43 pm

 Do you even HODL bro?

 Reply
 6. wqd
 January 28, 2022 at 2:16 pm

 :-))

 Reply
 7. KEITH
 February 1, 2022 at 3:29 am

 He did spell it correctly for starters, why do people comment on post rudely but have no idea what the person is even talking about.
 Typical simp or woman.
 What is HODLING?
 At 10:03 a.m. UTC on Dec. 18, Bitcointalk forum user GameKyuubi posted “I AM HODLING”—a drunk, semi-coherent, typo-laden rant about the user’s poor trading skills and determination to simply hold his Bitcoin from that point on. “I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e,” GameKyuubi wrote about the now-famous misspelling of “holding.” “WHY AM I HOLDING? I’LL TELL YOU WHY,” he continued. “It’s because I’m a bad trader and I KNOW I’M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro.”

 Reply
 3. rose
 March 17, 2021 at 3:01 pm

 I was reached out to on Instagram by a trader who specializes in crypto-investment.his company was on the cutting edge and used the latest technology and could offer guaranteed returns. I invested and used their online platform. I could see my investments were resulting in good profits. I invested more and till date i never regretted investing with them.you can try them out as well at stratsminingdotcom . you will definitely be wowed about this i promise you

 Reply
 1. Usman
 October 16, 2021 at 9:45 pm

 How?

 Reply
 4. Vik
 April 4, 2021 at 3:41 am

 To be frank, this is the year of the bull for crypto. Day trading will make you tens of thousands every month if not millions. Once in a lifetime opportunity. Please do all you can to learn day trade crypto and make all the money/crypto you can, because this won’t last. I’m gobsmacked how people are still missing out.

 Reply
 1. Blake Neumeister
 August 26, 2021 at 5:22 am

 Day trading is very difficult and takes years of experience to become profcient.

 Reply
 5. Marina Teramond
 April 10, 2021 at 3:51 am

 what assets can be used to make a profit? will bitcoin fall? will I be able to make a profit on the dividends? thanks for the information

 Reply
 1. Troy
 April 27, 2021 at 4:03 pm

 There are no dividends or assets. You only make money on the next people that come in after you. Like MLM.

 Reply
 2. Troy Carlson
 April 27, 2021 at 4:03 pm

 There are no dividends or assets. You only make money on the next people that come in after you. Like MLM.

 Reply
 6. Oscar
 April 13, 2021 at 7:17 pm

 This is so exciting, I myself own 0.5 bitcoin, at age 63 !

 Reply
 1. Amir
 November 8, 2021 at 6:12 am

 How do you own”0.5″ of bitcoin??

 Reply
 7. Max
 May 11, 2021 at 3:03 pm

 Plz i need some more explanation to get to know more about cryptocurrency i have got a clue still not convinced i have known it well can i have to know it better please your concern will be highly valued

 Reply
 8. Dana
 May 12, 2021 at 7:32 pm

 Where do I find Jason’s methods?

 Reply
 9. beliebtesten spiele
 May 14, 2021 at 6:58 pm

 Ist Ihr Girokonto bei PayPal registriert und
 verifiziert, können Sie an der Online Casino Kasse eine Zahlung mit PayPal vornehmen, ohne direkt Ihre Bankdaten angeben zu müssen. PayPal fungiert als Drittanbieter zwischen Ihrer gewählten Zahlungsart, per exemplum
 Ihrem Girokonto und dem Zahlungsempfänger. Wenn Sie diesen Link klicken,
 wird ein Opt-Out-Cookie erstellt und in Ihrem Browser gespeichert.
 Wenn Sie die Spielgewinne für die anderen Spiele verwenden möchten, empfehlen wir, diese in der Hauptwährung des Glücksspielanbieters,
 beim Sie sich registriert haben, zu halten. One Touch ist ein modernes
 Feature, dabei die Verbraucher, die die spezielle Anwendung heruntergeladen haben,
 in Anwendungen teilnehmender Händler grundsätzlich
 mit nur einem Tastendruck bezahlen können. Der Zahlungsdienst bietet zahlreiche einzigartige Features für die registrierten Kunden,
 darunter PayPal One Touch. Beim amerikanischen Zahlungsdienst brauchen Sie sich keine Sorgen ca.
 Sicherheit Ihrer Online Zahlungen lösbar. Das Unternehmen aus der Silicon Valley erkannte früh die Bedeutung einer App
 für Zahlungen mithilfe Handy oder Tablet.

 Reply
 10. Wow, I enjoy reading this article, God Bless You Regards from Panama 🇵🇦
 May 26, 2021 at 6:38 am

 Wow, I enjoy reading this article, God Bless You
 Regards from Panama 🇵🇦

 Reply
 11. Baxter82
 June 15, 2021 at 4:39 am

 the wisest thing on anyone list should be multiple stream of income which is why I have always reckon with kloviactools and they have never failed me

 Reply
 12. Shekh Asif
 June 26, 2021 at 8:32 am

 Appreciated on your article writing… Really very good information sharing. Thank you for the sharing information with the people.

 Reply
 13. AMIT
 July 3, 2021 at 6:22 am

 how to start trading. can anyone explain

 Reply
 1. Einsfard
 July 23, 2021 at 12:12 pm

 You will need to learn Technical Analysis, so you won’t lose all your money to the market

 Reply
 14. Einsfard
 July 23, 2021 at 12:13 pm

 You will need to learn Technical Analysis, so you won’t lose all your money to the market

 Reply
 15. Whiteplainsconsulting
 July 30, 2021 at 4:38 pm

 Crypto space is an unpredictable and volatile market; thus, you generally have to face challenges and risks. There are no certifications of benefit, yet people, who contribute, remembering the benefit and the risk factor, get the greatest benefits through cryptographic money exchanging. Thanks for sharing informative blog.

 Reply
 16. John Simpsom
 August 26, 2021 at 5:19 am

 You lost me at “get paid in crypto which means double your earnings in days, if not hours.”

 100% returns in hours… really….? Crypto isn’t magic. It’s actually very hard to make consistent money.

 Reply
 17. John Simpson
 August 26, 2021 at 5:20 am

 You lost me at “get paid in crypto which means double your earnings in days, if not hours.”

 100% returns in hours… really….? Crypto isn’t magic. It’s actually very hard to make consistent money.

 Reply
 18. Bob S
 September 20, 2021 at 11:49 pm

 Very good article, looking to get into trading crypto currency, or maybe even penny stocks.
 Can anyone recommend a good 101 guide?

 Reply
 19. Bob P S
 September 20, 2021 at 11:50 pm

 Very good article, looking to get into trading crypto currency, or maybe even penny stocks.
 Can anyone recommend a good 101 guide?

 Reply
 20. Jack Reynolds
 September 27, 2021 at 8:06 am

 The cyrpto market has been unstable. People ask themselves if this is the right time to invest? before jumping into conclusion I think you should take a look at things first. BTC is the best cryptocurrency to make earnings due to the recent outbreak. Sometimes when we have that specific money that we want to invest in a particular thing, we always lose focus and then invest or spend the money wrongly. Investors who bought early are still in profit despite the recent price crash and they also earn by tradlng…

 Reply
 21. Brian
 September 28, 2021 at 5:23 pm

 Lol cmon Chad, nit everyone knows what hodl means, a good thing there are more people learning the word. That only means that more people are getting into cryptos now, and not to late.

 Reply
 22. Gopi patel
 October 5, 2021 at 11:25 am

 The author of this post has undoubtedly done a great job by shaping this article on such an uncommon yet untouched topic. There are not many posts to be seen on this topic and hence whenever I came across this one, I didn’t think twice before reading it. The language of this post is extremely clear and easy to understand and this is possibly the USP of this post.

 Reply
 23. getsocialguide
 November 5, 2021 at 1:01 pm

 enjoy reading this article, God Bless You, Thanks

 Reply
 24. Donald
 December 5, 2021 at 3:28 am

 How can I understand crypto pls.

 Reply
 25. Ed Manger
 January 7, 2022 at 1:39 am

 I’m an old dinosaur that’s not very technically smart. I’m absolutely amazed with the earnings I see people making with crypto and NFTs is it too late to get started.
 Is just investing in crypto worth it or am I waisting my time and money.

 Reply
 26. Renny
 April 25, 2022 at 8:23 am

 Very interesting! I really desire to make passive income out of this whole thing. I’m on ground zero, what exactly do I need to begin this whole cryptocurrency thing. I was drawn into this research on getting to hear about NFT. Please help a brother in need.

 Reply
 27. Jim Smith
 July 11, 2022 at 10:01 am

 I love reading your blogs. You share every piece of information related to the topic. You have a great knowledge of everything. I also remember a blog that is related to earning crypto. You must visit the site once for more information.

 Reply
 28. Maurice Smith
 August 20, 2022 at 9:36 am

 Could we be seeing the historical cliche that is ‘the top of the market’?
 It may not be ‘the shoe-shine boy giving stock tips’….no this is worse…inexperienced people getting involved in something they don’t understand but assume they’ve a good chance of making money by doing very little! Remember one thing: winners will show off, losers will slink away…so there is a distorted impression about the money being made. These days it seems journalists no longer state that 80% of day-traders lose everything….
 And that will be worse now, with the casual utilisation of eye-watering leverage…
 It will all end in tears.

 Reply
 29. Maxwell
 December 9, 2022 at 4:22 am

 Are you currently searching for a good account manager to help you manage your funds and guarantee your profit? Then contact Mr. Adam Wilson , he understands the market trend and loves to help people from their financial issues. If interested contact
 adamwilson. trading at consultant com

 Reply

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Everyone gets into the cryptocurrency field to make money, but not all end up doing that. A lot of people either simply give up along the way or fall into some sort trap with the rising cases of crypto scams. Truth be told, there are quite a handful of methods you can make legitimate money with cryptocurrencies other than the obvious way of trading. We, therefore, decided to explore some of the proven ways of how to make money with cryptocurrency; we found quite a few, but be assured that you’ll find them very impressive. Without further ado, below are 10 ways to make money with cryptocurrency today.  Way#1. Buy and HODL  This is the most common way of earning money from cryptocurrencies. Most investors buy coins such as Bitcoin, Litecoin, Ethereum, Ripple, and more and wait until their value rise. Once their market prices rise, they sell at a profit. This investing strategy requires one to identify more stable and volatile assets that can shift in value rapidly, resulting in regular profits. Assets such as Bitcoin and Ethereum have been known to maintain regular price fluctuations; they can, therefore, be considered a safe investment in this regard. However, you’re welcomed to trade any asset you feel is going to rise in value; all you need to do is to analyze each asset you invest in before committing to HODLing it. Also, you don’t need to buy the most expensive assets for you to make profits. There are thousands of small altcoins that have decent price shifts; consider having a mix of all coins that have a promising future value and are not just popular in the exchanges.  Way#2. Earn Cryptocurrency Dividends      Did you know that you can buy cryptos and hold them for the dividend? Well, there are a number of coins that will get you paid for simply buying and holding their digital assets. The best thing about these coins paying a dividend to holders is you don’t even have to stake them, especially in a wallet.  A few examples of coins that pay out dividends include COSS, CEFF, NEO, KUCOIN, and more. Just like the conventional stocks, not all of these coins, are suitable for your portfolio; you’ll need to analyze and pick out what seems to align with your investment objectives.  Way#3. Run Cryptocurrency Master Nodes  What is a crypto master node? These are full nodes that motivate operators of the various nodes to execute their roles in operating a blockchain. In other words, a master node is a cryptocurrency full node or computer wallet that maintains a real-time record of a blockchain’s activities. The idea behind master nodes is a bit technical in nature, but below is a simplified explanation: Running crypto master nodes is one of the most popular ways of earning passive income in this space. But how exactly do you make money from this? Allow me… Many cryptocurrencies pay node operators to maintain a real-time record of their activities on their native blockchains. Since the process is complex and requires one to maintain a certain minimum number of coins under their master nodes, crypto platforms prefer outsourcing the service to master node operators at a fee.  Examples of proof of stake cryptos that have master nodes include DASH and PIVX.  Way#4. Stake Cryptos  This is another method of earning money from cryptocurrencies; it offers a double earning potential through price appreciation and dividend payout from selected coins for staking (or proof-of-stake) their digital assets. Staking involves holding coins in a live wallet, thus allowing you to earn additional coins for securing that particular crypto network. Some examples of coins that can be staked include NAV Coin, PIVX, Neblio, Decred, and many more.  Way#5. Day Trading  More than 80% of cryptocurrency investors believe that the only effective way (if not the only way) to earn money in this space is through day trading.  But what most of them don’t know is that day trading is more than just holding an asset until its value rises; it takes a lot to be a day trader, but most importantly, you need to have the proper analytical and technical skills.  You’ll need to analyze market charts on the performance of the listed assets; this is perhaps the most involving way of earning from cryptos but I believe one of the most rewarding. You can start day trading on any exchange today; all you need to do is to sign up, buy some assets, analyze, and you’re all set. You an also start trading through an automatic trading platform like bitcoin profit  which allows users to decipher the signals emitted by the trends on bitcoin and other cryptocurrencies and start perform successful small trader. Tip: If you’re going to be a day trader, consider mastering the art of analyzing stocks using the technical and fundamental methods; they are widely used to evaluate all traded assets.  Way#6. Help Out with Cryptocurrency Microtasks  If you have extra time, you can also do some small tasks for individuals or cryptocurrency platforms and get paid for it. The tasks can widely vary; it could be apps testing, adverts viewing, taking surveys, watching videos, and more.  You can get microtasks from sites such as Bitcoins Rewards, Coinbucks, or Bituro.      Way#7. Work for Cryptocurrency Companies  This is a common way of earning from the sector. Anyone can work for a cryptocurrency company at any capacity; you can be a digital marketer, content creator, web designer, among other things. All you have to do is to identify their needs and show them how your skills can help solve a problem.  The best thing about working for crypto platforms is that you’re likely to work remotely, allowing you to benefit from the flexibility of working from your own space. Other than that, most crypto firms offer very competitive packages, and if you happen to come by a chance to work with any legit ones, don’t hesitate to take up the opportunity. Below are a few examples of platforms that pay in digital assets for services rendered:  Coinality bitWAGE JobsforBitcoin  Angle.co XBTFreelancer Coinworker 21.co  These companies offer their compensation in terms of cryptos; this, therefore, means that the value of your earnings can more than double in value within days if not hours.  Way#8. Crypto Arbitrage  The cryptocurrency sector is largely unregulated; this has resulted in a lot of variations in terms of assets valuation, pricing of products, and so on. Most exchanges decide for themselves the prices their assets at are listed, and this has brought avoid the difference in the volatility and liquidity of assets. If well researched, one can make a kill from these price variations through buying from cheap sources and selling on overpriced exchanges. This is pretty much what describes arbitrage. If you get your act together, you can find anything between 5% – 30% in price spreads across various exchanges. Consider signing up on various platforms and compare asset prices to find any meaningful variations to capitalize on.  Way#9. Cryptocurrency Faucets  Crypto faucets are not that popular, but a very viable mean of income generating. Bitcoin faucets are the most popular ones and they are basically a reward system that runs in the form of a website or application that offers rewards to qualified users in form of a Satoshi. A Satoshi is a hundredth of a millionth BTC; a reward awarded for completing a task such as a capture or any other as may be required by the application or website. The tasks may also be in form of fun activities such as playing games, watching videos, viewing certain ads. Each task that’s accomplished earns you a small portion of Bitcoin. You may need to complete quite a number of tasks to be able to make any tangible income from cryptocurrency faucets. You can check out some faucets right here.   Way#10. Create Cryptocurrency Content  Over the last decade, content has become one of the most effective ways of communicating any message to your existing or potential clients. If you need to launch a new product or services, content is the best way to do that. The crypto sector, especially, relies on content marketing a lot due to the fact that most projects are virtual. It may, therefore, not be possible to use conventional marketing ways to reach the target audience. And this is where the opportunity lies; you can  create video content, infographics, or written content for various cryptocurrency brands. Some of the websites that offer regular gigs for content creators in the cryptocurrency space include Yours, Y’alls, and Steemit.  Bonus: Way#11  Incorporate cryptocurrency as one of your payment methods If you’re a merchant, you stand a chance of earning handsomely from accepting crypto payments. Statistics show that some cryptos have risen in market value within a day by 1000s in percentage increase, very few investments make it to 100% in years. All you need to do is to identify the best channel for accepting crypto payments; here are a few to get you started:  CoinBank BitPay CoinGate SpectroCoin  …and more.  Conclusion  So, can you make money with cryptocurrency? Well, there, you now have your answer. You now have 11 ways of how to make money with cryptocurrency; try the ones that work for you and see their impact.  And if you’ve tried any of the above mentioned or different ways, please share with us in the comments section.
10 No-Brainer Ways of How to Make Money With Cryptocurrency
https://icoholder.com/blog/how-to-make-money-with-cryptocurrency/
https://marginalrevolution.com/marginalrevolution/2021/02/the-demand-for-crypto.html
The demand for crypto - Marginal REVOLUTION
2021-02-19
Tyler Cowen
<div><div>
 <main>
 
 
 <article>
 
 <div>
 <p>Here is an email from a loyal <strong>MR</strong> reader:</p>
<blockquote><p>I’ve been importing a few things for a new business. Such a huge opportunity for crypto. And not just for Nigerians.</p>
<p>The payments are a real pain. Many vendors already accept bitcoin. And you could eventually use smart contracts to provide a version of Alibaba Trade Assurance that works for places other than China and with every vendor. The language barrier makes it seem like you are answering an email about a Nigerian Prince, so some kind of escrow to build trust will expand who is comfortable importing.</p>
<p>I’m doing this because it is about 40% of the price to import yourself for the products I need rather than buy from someone on Amazon (who probably bought from a similar exporter). There are very real barriers to be knocked down and eliminate a whole host of middlemen in many products.</p>
<p>I will definitely be using crypto payments for future transactions. The convenience of crypto increases a lot as you do larger orders and build trust with suppliers.</p></blockquote>
 </div>
 
</article>
 </main> 
 </div>||||I|||| Toggle navigation
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 The demand for crypto

 by Tyler Cowen February 19, 2021 at 2:43 am in
 * Economics

 Here is an email from a loyal MR reader:

 I’ve been importing a few things for a new business. Such a huge opportunity for crypto. And not just for Nigerians.

 The payments are a real pain. Many vendors already accept bitcoin. And you could eventually use smart contracts to provide a version of Alibaba Trade Assurance that works for places other than China and with every vendor. The language barrier makes it seem like you are answering an email about a Nigerian Prince, so some kind of escrow to build trust will expand who is comfortable importing.

 I’m doing this because it is about 40% of the price to import yourself for the products I need rather than buy from someone on Amazon (who probably bought from a similar exporter). There are very real barriers to be knocked down and eliminate a whole host of middlemen in many products.

 I will definitely be using crypto payments for future transactions. The convenience of crypto increases a lot as you do larger orders and build trust with suppliers.

 * 91 Comments
 * Facebook
 * Twitter
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 * print

 Comments Sort by Top Sort by Recent Sort by Controversial

 Moreno Klausz

 2021-02-19 03:11:48
 13 1
 
 Hide Replies
 #

 Sure, but if your profit margin is 10% and bitcoin can have daily swings of more than 10%...

 Zaua

 2021-02-19 08:14:37
 5 0
 
 #

 Also, the average Bitcoin transaction fee is also over $20 right now, so it’d really only be useful for pretty large orders.

 dan1111

 2021-02-19 04:34:51
 2 0
 
 Hide Replies
 #

 This is a real problem, but in a difficult business environment like Nigeria, with high transaction costs and various barriers to doing business, it is probably a better problem than the alternative problems that are available.

 dan1111

 2021-02-19 05:50:34
 12 0
 
 #

 What happened to all those Apple Store gift cards I sent you already?

 There you are

 2021-02-19 09:35:22
 8 0
 
 #

 I've been trying to get a hold of you for years

 BC

 2021-02-19 07:08:10
 2 0
 
 #

 Bitcoin price risk falls mainly on the vendors, who are the ones accepting payment in bitcoin, right? I assume that the products are still priced in USD, just transacted in bitcoin at the spot rate at time of transaction.

 Bitcoin price risk should be hedgeable through bitcoin futures, which exist. As Matt Levine has pointed out, getting cryptofinance to work seems to involve a lot of relearning traditional finance.

 Chris

 2021-02-19 07:33:23
 2 0
 
 Hide Replies
 #

 You can't do smart contracts on Bitcoin, so there is a reason he is talking generically about crypto and not bitcoin specifically.

 Also, wild swings aren't a barrier if you are using escrow, you can transfer the money at current exchange rates once goods are received.

 JWatts

 2021-02-19 09:02:06
 2 0
 
 #

 "Also, wild swings aren't a barrier if you are using escrow, you can transfer the money at current exchange rates once goods are received."

 It still seems that wild swings are a barrier. If you spend time negotiating a deal with a 10% margin and the bit coin drops 10% making the deal worthless, you've wasted the time. That's a real cost that businesses would have to bear.

 Granted, you could just negotiate the deal in dollars and transact in bitcoin, but even in that case if one of the two participants is sitting on a pile of bit coins, a drop means they have less money and may not be able to afford the deal after the price swing.

 Bitcoin Help Desk

 2021-02-19 12:37:53
 1 0
 
 #

 One easy solution is what's called a 'multisig' wallet. This is not a smart contract, but rather an address with a flexible number of authorized participants.

 "2 of 3" multi-signature = seller has one key, buyer has one key, and trusted intermediary has 3rd key. Voluntarily choose the 3rd. Or have it be 3 of 5, with 3 trusted intermediaries along with buyer and seller. These come with their own risks, but it's functionally escrow.

 If good received and buyer is happy, buyer and seller agree to release funds to buyer's personal address. If there's a dispute, the 3rd party can mediate and resolve accordingly.

 Michel

 2021-02-19 09:39:07
 1 0
 
 Hide Replies
 #

 Hey guys, this 10% swing will be in your favor half the time.

 dan1111

 2021-02-19 14:13:58
 1 0
 
 #

 Yeah, but risk stemming from price fluctuations still imposes a real cost on business.

 Bitcoin Help Desk

 2021-02-19 12:34:56
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 This presents an entrepreneurial opportunity. If a biz wants to quicken payments via crypto but avoid exchange rate risk, that's a service to provide!

 This is partly what traditional finance does. New players, or old players, can offer these services. Perhaps unregulated at first, but that's how all technology starts.

 Elder Millenial

 2021-02-19 17:57:08
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 They could just use a stable coin pegged to the dollar.

 Bitcoin Help Desk

 2021-02-19 20:43:41
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 Depends on the stablecoin, as some may not have final settlement.

 Bitcoin is final. This is often missed. Remember the guy day trading and both when he lost and when he won, he called his bank to have his initial ACH transfer to the brokerage reversed because "it wasn't me!"

 The Original D

 2021-02-19 21:35:04
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 He said crypto, not Bitcoin. Don't fall into the trap of thinking they're the same.

 PS Buy Ethereum and then don't look at it for 10 years.

 Pepe Santos

 2021-02-19 04:55:59
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 With an extra margin of 40% off the wholesale price, a 10% swing is more than manageable.

 If Bitcoin is too much of a rodeo for you, there are stablecoins like Tyler's favorite Diem.

 JWatts

 2021-02-19 09:03:23
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 " a 10% swing is more than manageable."

 Sure it's manageable, but it's an extra cost.

 Erwin

 2021-02-19 03:11:05
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 I'm pro-crypto but it needs to be more user friendly. I don't want to lose my life savings because I forget my password or because I fat fingered the wrong thing. Then again, even Citibank using the traditional banking system couldn't get a do-over from a judge on their oopsies. Matt Levine's take (note the screenshot of the very ugly Oracle app which makes this very possible):

 https://www.bloomberg.com/opinion/articles/2021-02-17/citi-can-t-have-its-900-million-back

 William

 2021-02-19 08:32:35
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 Every time I read Matt Levine I'm blown away by how much better he is than any other writer on the same topic. For example, a couple days ago the much-praised Zeynep Tufekci write a shockingly ignorant article on the Gamestop saga for The Atlantic. She forced the entire story to fit her existing narrative (the little guy always gets screwed) and clearly didn't understand the basic facts of what happened. Anyone who had been reading Levine would know that she had no idea what she was talking about.

 Alan Goldhammer

 2021-02-19 08:45:54
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 The ubiquitous Zeynep Tufecki is a perfect guest for a Conversations with Tyler. Perhaps she considers herself to be the fountain of all knowledge. Perhaps she and Scott Alexander can be interviewed together!

 William

 2021-02-19 11:04:00
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 I agree, I think she would be an interesting guest. I don't have anything against her and I understand she has a strong history of accurate predictions. Perhaps her notoriety has gone to her head, or maybe she just has certain blind spots. Either way, her analysis of Gamestop (https://www.theatlantic.com/technology/archive/2021/02/gamestop-mess-shows-internet-rigged-too/618040/) is embarrassing in a way that you generally see from people who see every issue as a way to confirm their partisan priors.

 Bitcoin Help Desk

 2021-02-19 12:39:32
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 This is entrepreneurial opportunity. Hard to use? No instructions in your language? Great, a company can form and help you along the way, for a fee. Don't trust them? Find another new company to provide insurance against the first. It's opportunity all the way down, so long as the marginal benefit (cost, speed, transaction finality, etc...) exceeds current alternatives.

 Will1

 2021-02-19 06:05:54
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 I am dumb. Can someone less dumb explain how crypto currency ameliorates this guy's problems dealing with importers in a low trust environment?

 Benjamin Cole aka The Tin-Foil Hat Economist

 2021-02-19 06:54:14
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 Well, you see, if someone is hip enough to work in Bitcoin....meaning they might be a dodgy regarding authorities, and so there is honor among thieves.

 Tom T.

 2021-02-19 09:32:44
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 I'm not following either. You're introducing an extra level of significant currency risk in exchange for ... what?

 Allen Derper

 2021-02-19 09:55:47
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 Transaction fees for international wire transfers can be huge, at least when I've used them (for example with wells fargo bank).

 Perhaps in developing countries, the transfer fees can be even larger.

 Ricardo

 2021-02-19 12:16:27
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 International wire transfers cost $30-40 to send if you shop around. If you are importing $5,000 worth of goods, that's already less than 1%. Yes, there can be a haircut on the exchange rate as well but exporters in good regulatory environments should be able to open foreign currency accounts to receive payments in major currencies like USD.

 Wire transfers are intended for large business transactions in which the service fee winds up being negligible. If you need to send a few hundred dollars somewhere, there is a highly competitive market for online remittance services.

 Tom T.

 2021-02-19 10:57:58
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 OK, that's helpful. Thanks.

 Tony Cohen

 2021-02-19 06:13:13
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 Perhaps this is just sour grapes on me not buying crypto when I could have, but I always personally thought theft was an under-explored concern. Assets in banks and other instructions have protections. If I had a lot of gold in a safe it might be hard to physically move it in secret, but crypto. You just go to someone's house, threaten them for their password and then....? I'm just a regular guy. I like that money is traceable. (Perhaps me being an American means I am completely overlooking the potential for currency devaluation of people from other countries)

 dan1111

 2021-02-19 06:46:23
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 I agree that crypto is not safer than other options available in countries with strong financial institutions. It's less clear that this is true with the options available in Nigeria, though. Also, there is a difference between holding lots of assets in Bitcoin and using it as a transaction mechanism.

 Glenn

 2021-02-19 14:48:53
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 "...when I could have..." You still can. You pretty much always can.

 Zaua

 2021-02-19 08:07:41
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 How can smart contracts serve an escrow function? What if the seller ships a brick instead of the product? What if the buyer lies and said he got a brick? You’d still need a human to adjudicate that dispute.

 Bill

 2021-02-19 09:39:52
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 That's true. But you don't need the paperwork that has to travel with the product...like bills of lading, etc. And, you do need inspectors at the port, etc. Where crypto works well is in the contract and assurance area. But, even with contracts, there is always room for interpretation of terms, or gaps in specification. So, bottom line: you can get the efficiency of blockchain, electronic contracts, etc. without bitcoin. As Nouriel Roubini pointed out:

 "Even referring to crypto as assets is a misnomer. Most assets have a stream of income (stocks, bonds, commercial real estate) or a use (housing) or some other utility (fiat currency provides liquidity and can be used for payments). Gold has no income but it has industrial uses. It also has utility as a store of value and a hedge against inflation, currency debasement and tail risks.

 Crypto has no income, no utility, no payment or other services. It isn’t even anonymous because the underlying blockchain technology makes it easy to trace payments. It is only a play on a speculative asset bubble, worse than tulip-mania as flowers had and still have utility. Its store of value against tail risks is unproven. And worse: some cryptos, dubbed “shitcoins”, are financial scams in the first place or debased daily by their sponsor. Bitcoin’s price is highly volatile, and claims of misbehaviour, including pump and dump, spoofing, wash trading and front-running by exchanges, are widespread." https://www.ft.com/content/9be5ad05-b17a-4449-807b-5dbcb5ef8170

 Catinthehat

 2021-02-19 11:04:11
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 This is true of other mainstream payments like Venmo and Cash app.
 Say you buy concert tickets and pay with Venmo, but the seller sends you nothing.
 You have no recourse and the transaction cannot be reversed.
 The seller walks away with your money. You need a court order to Identify his/her account and by the time it happens he is long gone.

 Ricardo

 2021-02-19 12:04:47
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 Anyone who uses Venmo for commercial transactions is asking for trouble. The use case for Venmo is for people who know each other who want to split a restaurant bill or pool money together for an event. It is P2P, not P2B.

 For P2B, we already have Visa and Mastercard, which offer fraud protection and theoretically no transaction fees for purchasers. If you are a small business who doesn't want the hassle of opening a merchant account with Visa or Mastercard, there is PayPal.

 Catinthehat

 2021-02-19 15:40:45
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 My only point was that no recourse is not confined to only crypto transactions. It occurs with non crypto payment methods used by millions of Americans, as i mentioned above same with Zelle, which is supported by major banks. The transaction cannot be reversed or contested.
 Paypal charges fees.

 Shade

 2021-02-19 08:10:01
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 Ridiculous comments on lack of state trust as usual. The reason their is a window here is because of regular restrictions of trade (both financial and physical) imposed by the Nigerian government and various taxes on such transations. Crypto, in this sense, is just money laundering.

 "You can make excess profits with crime" - News @11

 Reason

 2021-02-19 09:55:03
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 Bingo. The use case for cryptocurrency is to avoid laws. Be they trade laws, tax laws, or criminal laws.

 I’m not a statist, but I think that a functioning and consistent legal framework is important.

 Cryptocurrency is not consistent with other payment options. It does not comply with many local countries at all, and is not in full compliance with the laws of any country.

 I do not understand how the major industrialized countries have not put effort into bringing cryptocurrency into compliance with their laws.

 Catinthehat

 2021-02-19 10:45:51
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 Some of them did. It’s banned in China and soon India. In the US you have to declare crypto transactions on your tax return.

 Reason

 2021-02-19 11:45:09
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 "In the US you have to declare crypto transactions on your tax return."

 That's hardly full compliance. How did the KoC function with your counterparty? I'm sure the answer is : it did not.

 Shade

 2021-02-19 08:11:05
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 I deserve a whipping for using their and not there....

 Good manners

 2021-02-19 10:16:58
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 Rather than saying somebody’s Comments are ridiculous would you consider saying something like: my views on this matter are or this is how I see it.

 You may not realize it but when you use terms like ridiculous It comes across as trolling and creates an atmosphere were people do not want to post their ideas.

 Bob

 2021-02-19 10:02:45
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 It's not difficult to find people who believe blockchains will solve their problems: What is difficult is to first figure out if they will really solve them, and then building whatever is necessary to make sure it really happens. There are a variety of problems that are, at the current time, still thoroughly unsolved, and they tend to ruin the vast majority of wishful usages.

 But places that are bullish in cryptocurrencies, like this blog, spend very little time discussing said limitations, and therefore even people that are supposedly well read will end up posting things like the OP's request, which land face-first into those limitations.

 We'd not take it seriously if someone's hopes for airplanes involved crossing the Atlantic in 2 hours while using only 2 gallons of jet fuel. If your hope for self driving cars also require that the cars cost $7, we'd roll our eyes. But when someone wishes for trustless environments that support reliable delivery of goods, they go into the Marginal Revolution front page.

 It's not that that wishlist would take, say, someone to invest 50 million dollars building tech: It'd require advancements we can't even smell.

 JSK

 2021-02-19 03:27:55
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 " build trust with suppliers"

 weird. the whole usp of crypto is "trustlessness".

 dan1111

 2021-02-19 04:23:46
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 It's not a contradiction. Trustlessness builds trust.

 Being assured of payment without having to trust the buyer enables a transaction to happen that otherwise would not. And once transactions start occurring, they know you are legit, and a relationship of trust can build, which may include engagement in other, more "trusting" ways.

 If there is no reliable way to make the transaction without trust in the first place, it's much harder for that relationship to develop.

 dan1111

 2021-02-19 06:19:58
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 Yeah. The mechanism I described isn't new or limited to cryptocurrencies. Written contracts between parties are another example. But crypto may be providing a guarantee where other options are not available.

 Skeptical ( but well read ) American

 2021-02-19 09:49:41
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 ... L/C

 Way back half-a-millennium ago the Venetions ( guys from Venice ) developed the means for businesses to conduct transactions across borders.

 To me, as L/C points out, this is just another electronic version of it.

 JSK

 2021-02-19 08:35:12
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 Yeah but once you establish trust, doesn't that limit the scope and usefulness of bitcoin in a relative sense? Which is in contradiction to:
 "The convenience of crypto increases a lot as you do larger orders and build trust with suppliers."

 dan1111

 2021-02-19 09:02:00
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 I think it depends on how you read that sentence. I read it as "the larger your orders, the bigger the trust problem becomes".

 Ricardo

 2021-02-19 10:34:47
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 Wasn't the whole point of PayPal to solve the above problems all the way back in the 1990s? Why did they fail and why are we expecting cryptocurrencies to do a better job?

 As Zaua and Bill pointed out, escrow requires a trusted mediator and once you interject such a figure into the transaction, the decentralized and pseudonymous nature of cryptocurrency is defeated. If the argument for cryptocurrency is that it allows SMEs in completely corrupt and unstable countries to run export businesses, that's something but, again, these businesses are not going to be completely off the grid since they rely on the guarantee provided by mediators and their goods are going to be regularly transiting through the country's airports and seaports. The tax man can always show up to the owner's house and say, "that's a nice car you got parked out front and we see large quantities of your goods shipping out every day. Can you show me your books and explain where all the revenue from your exports shows up? And while we are on the topic of exports, can you show your export license?" Cryptocurrency isn't going to solve basic problems of cumbersome regulations and kleptocratic states.

 Ed

 2021-02-19 19:14:36
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 > Wasn't the whole point of PayPal to solve the above problems all the way back in the 1990s? Why did they fail and why are we expecting cryptocurrencies to do a better job?

 PayPal has a server you can unplug/point a gun at.

 Crypto doesn't have that single point of failure so it will succeed or fail in a new way at least

 The Boy Plunger

 2021-02-19 02:53:55
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 Will be fun to see this chart play out—what’s the sound of one hand clapping? We will see it graphed.

 John From London

 2021-02-19 04:04:44
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 I’m afraid the comment says more about the lack of insight of the Loyal Reader, than the efficacy of crypto.

 I agree that a crypto contract is a use case, but the medium of exchange is not.

 There are plenty of payment platforms with inbuilt insurance (e.g. PayPal) and plenty focused on same day cross border payments (e.g. Transferwise) that don’t require the merchant to take underlying price risk and integrate directly into the merchant’s bank (and can thus be used for solvency or leverage covenants).

 PS: these platforms also don’t require 78,000,000,000,000,000 watt hours.

 Rahul

 2021-02-19 04:48:33
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 Im curious what sort of products "loyal reader" buys where most vendors accept Bitcoin.

 Ive never seen a business vendor that accepted crypto currency.

 Heejak

 2021-02-19 10:33:14
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 Are you regularly operating as a buyer in markets comparable to Nigeria? One could imagine that the same vendor offers payment options differently over markets.

 N.N

 2021-02-19 04:21:38
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 John from England's Capital:

 R.E. Paypal, Nigerians are banned...apparently while 'Black Lives Matter' to American corps, Nigerian businesses do not.

 Transferwise is banned by the government.

 Crypto is the best option out of many terrible choices caused by people profiling Nigerians and the government being Statist.

 Do y'all have some gunboats you can lend to open up trade? Return to Palmerstonian tradition ):

 John from London

 2021-02-19 05:04:21
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 The current use case is that helps consenting adults transact illegally. Got it.

 I see the purpose in having a payment network that is detached from arbitrary local laws (and monetary and fiscal politics). However, it does not solve the practical problem of converting Bitcoin to Nigerian dollars in specie.

 I so want to be crypto believer. The best use case is to hedge against massive fiscal, monetary or legislative shocks.

 dan1111

 2021-02-19 05:49:37
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 Is the OP transacting illegally by using Bitcoin? I don't think so.

 Because Bitcoin is hard to effectively ban, it is more likely to remain legal, as countries are less likely to try to ban it. And permission is not needed to enter the market in the first place. Additionally, I think the decentralisation makes it less likely that a corrupt government could scapegoat it or try to extract rents from it.

 Even if it is banned, "off the books payment within a broken regulatory system" is quite a distinct use case from "using Bitcoin to buy heroin". Technically "illegal" activity is the norm in a place like Nigeria, where sources estimate that the informal economy makes up 2/3 of economic activity.

 dan1111

 2021-02-19 04:33:00
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 So the advantage of crypto is, basically, that it is not banned. But that is a non-trivial benefit--and it is something intrinsic to crypto's core technology, since decentralization makes it pretty much impossible to effectively ban.

 Ricardo

 2021-02-19 11:42:28
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 You can't ban crypto but you can regulate companies in the formal sector who accept crypto as payment for goods and services and you can also regulate or outright ban services that allow exchanging crypto for hard currency.

 The only reason we haven't seen more movement on this front is that so few legitimate businesses are interesting in accepting cryptocurrencies except as a gimmick or publicity stunt. Microsoft, Tesla and handful of others are the exception that proves the rule. Once bitcoin poses a genuine money laundering risk in a place like the U.S., you will almost certainly see KYC rules and suspicious transaction reporting follow on any business that accepts bitcoin. At that point, compliance won't be worth the headache.

 rayward

 2021-02-19 06:40:32
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 One commenter mentioned PayPal. Google PayPal complaints and marvel at the volume of them, mostly by small businesses that rely on payment from PayPal attributable to internet commerce. Or more accurately, withholding payment. I get it: PayPal is providing a service that greatly facilitates trade related to internet commerce. But it is a mostly unregulated service that can be devastating to a small business that depends on a steady cash flow.

 Walter

 2021-02-19 08:27:05
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 "Google PayPal complaints and marvel at the volume of them"
 True, but where do I go to Google the Bitcoin complaints? At least PayPal provides complaint mechanisms and has an organizational structure that can address them.

 ed baker

 2021-02-19 19:06:51
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 Cold comfort when those mechanisms and structures suck

 Benjamin Cole aka The Tin-Foil Hat Economist

 2021-02-19 06:52:12
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 I have had good luck with PayPal.

 I am not affiliated in any way with them.

 I always wonder what the big hoopla over Bitcoin is, when you can work through PayPal.

 PayPal does place a hold on the money.

 On the other hand owning Bitcoin strikes me as a bit risky.

 Alan Goldhammer

 2021-02-19 08:48:40
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 I too have had good luck with PayPal. I've not had a hold on any transactions to date and can easily transfer money to my bank account. I am the treasurer of our local citizens association and we get 60% of dues from PayPal without a glitch.

 Ricardo

 2021-02-19 12:28:35
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 Yes but the complaints are related to the fact that PayPal offers precisely the sort of dispute resolution and mediation services that are necessary in low-trust environments. Smart contracts are not useful here*. If you want fraud protection, you have to give up a degree of anonymity and forget the whole idea of decentralization. If you don't want fraud protection, well, good luck.

 * I've never fully understood smart contracts but my understanding is that they are a clever solution to a very limited set of problems. For instance, if I want someone to give me the prime factors of a huge number, I can write a contract in a standardized programming language that effectively says, "whoever gives a set of numbers that this program all confirms to be prime and that, when multiplied together, give the answer 'n' gets to claim the ether contained in the attached wallet." That is pretty clever but is very limited in scope.

 Phinton

 2021-02-19 11:52:46
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 I buy a lot of machines (fabrication) and supplies from China. Trust isn't really an issue. They will usually overwhelm you with photographs of what you have purchased on a shipping pallet. That includes photos of the invoice stuck to the machine, serial numbers, etc. And the photos will show the pallet at each step of the way: First, everthing placed on the pallet. Then everything placed in boxes and pictures before the lids are closed, etc. And then a picture after the pallet is wrapped.

 Part of this is because they don't trust YOU and they don't want you to claim something wasn't in the box.

 But the payment via paypal is no problem--they will just add 4-5%. Often there are two payments: 25-50% (negotiable) at order, and then the balance upon shipping.

 Most vendors in China will also ask what price they should declare on the customs forms. If the purchase is under $800, then duty is usually zero. If the purchase is $10K, but they note $5K on the customs forms, then you could save on duty. But US import duty on most machines is low around 1 to 1.5%, because the US gov believes importing machines will result in economic activity and thus it's a good thing.

 In short, a vendor in China has never cheated me, shorted me, or delivered anything too far off from what I expected. Paypal was quick and easy. And if the 4-5% is too much, then do a wire transfer. A wire xfer to China is no problem 80% of the time. 20% of the time will require 1-2 hours (mostly hold time) on the phone or a visit to the bank.

 dan1111

 2021-02-19 04:41:18
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 I have been relatively skeptical about cryptocurrencies, but this sounds like an important, beneficial use case (and one that was not on my radar). Very interesting post.

 Crypto Enthusiast

 2021-02-19 13:11:41
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 There is certainly demand for decentralized banking. Btc is an important step towards a fully digitized economy, but there are other cryptocurrencies that function better for day to day transactions. Nano has no fees, it’s decentralized and isn’t mined, which eliminates concerns of energy usage or a 51% attack from coordinated miners.

 rayward

 2021-02-19 05:35:55
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 The loyal MR reader hits on something that I have emphasized again and again: trust. Trust is the essential ingredient for trade. It's what different people (from different countries, cultures, etc.) have in common that provides the trust that facilitates growth in trade. Will crypto serve this essential function? I suspect the cheerleaders for crypto care less about the rise of crypto than they do about the fall of currencies issued and regulated by government, such as the Dollar. Of course, the Dollar has served as the primary reserve currency for a very long time, a time when trade expanded exponentially. Not to be satisfied with success, the cheerleaders for crypto would have one believe that something as opaque as crypto can create more trust than the Dollar. Sure, the Dollar or any currency can be subject to manipulation by speculators and state enemies, and has been. But the relative stability of the Dollar and the confidence in the people who are charged with the responsibility for maintaining that confidence are the foundation for trust, and it's that trust that is essential for trade. Crypto?

 dan1111

 2021-02-19 06:17:37
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 I agree that the idea that crypto should replace major national currencies, or that crypto is less risky than these currencies, is silly.

 However, that is not what is happening here. "The dollar" is not an alternative solution to the OP's problem.

 Francis the Talking Mule

 2021-02-19 08:18:36
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 Crypto will have fully arrived once contracts like this guy is talking about are denominated in crypto units and not based on the exchange rate of some underlying currency. We're not there yet, but it's looking a lot more feasible than it once did.

 Bill

 2021-02-19 09:45:57
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 We'll see. Once the financial regulators get their teeth into this, the value will drop. Don't expect governments to give up financial regulation and export controls, money laundering enforcement, or tax evasion. See what happens when they announce controls.

 You have been warned.

 "On Friday, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced a proposed regulation that would require money service businesses (which includes, for example, cryptocurrency exchanges) to collect identity data about people who transact with their customers using self-hosted cryptocurrency wallets or foreign exchanges. The proposed regulation would require them to keep that data and turn it over to the government in some circumstances (such as when the dollar amount of transactions in a day exceeds a certain threshold). " This was a comment during the Trump administration. See what happens next.

  Bitcoin Help Desk

  2021-02-19 20:54:20
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  Partial list of regulators currently regulating bitcoin activity: IRS, FinCEN, CFTC, SEC, DoT, OCC, FSOC, NYSDFS, FTC...

  Most of these look at how bitcoin is being used, and then regulate accordingly.

 Bill

 2021-02-19 08:37:26
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 Nouriel Roubini, a Prof at NYU Stern, has writing and talking about Bitcoin, as a self-fulfilling bubble.

 Here are some links: https://www.bloomberg.com/news/videos/2021-02-17/bitcoin-is-a-self-fulfilling-bubble-roubini-warns-video

 He also did a piece in the Financial Times that was even more detailed:

 "Referring to bitcoin or other crypto as “currencies” is a misnomer. They are not a unit of account: virtually nothing is priced in them. They are not a scalable means of payment: with bitcoin you can do five transactions per second while the Visa network does 24,000. Bitcoins are barely used by legitimate companies as payment for goods and services, although Tesla said it planned to start accepting them.

 Crypto is not a stable store of value: even some crypto conferences refuse to accept them as payment for attendance fees. The volatile price moves can wipe out any profit margin of a merchant within a matter of hours. They aren’t even denominated in a consistent way that allows users to compare relative prices of goods. This reliance on different tokens is effectively a return to barter. The Flintstones had a more sophisticated monetary system based on a benchmark: the cartoon cavemen used shells."

 Here is that link: https://www.ft.com/content/9be5ad05-b17a-4449-807b-5dbcb5ef8170

 Then, again, North Korea has been successful in stealing bitcoins: https://www.technologyreview.com/2020/09/10/1008282/north-korea-hackers-money-laundering-cryptocurrency-bitcoin/

  TGGP

  2021-02-19 14:38:20
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  Bitcoin has been around for over a decade, and been repeatedly been declared a bubble even as it has gone up in value after those declarations. It may be a niche product mostly the same use as gold, but it's well past time for the people who dismissed it as just a bubble to admit they were wrong.
  https://www.econlib.org/bitcoin-is-not-a-bubble/

  Bill

  2021-02-19 18:30:37
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  Prof Roubini is usually right. Regulation is on its way, which will reduce the demand, as some transactions rely on illegal, so far unmonitored, activity.

  triclops

  2021-02-20 19:11:11
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  The Mayan calendar predicted the end of Bitcoin, I just misread the date!

  rayward

  2021-02-19 09:06:42
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  I would be remiss if I didn't mention the factor that provided the trust that greatly expanded trade among nations (and the wealth of nations): the spread of Christianity. Not an original idea on my part, but I agree with it. Of the major religions, only Christianity imposes an obligation on the faithful to spread the faith, and spread it they did and spread it they do. The common religion provides the trust that facilitates trade between otherwise very different people. Cowen has indicated that religious leaders will be the leaders in our future. He doesn't define "religion" (I offered my help), but the underlying point is a shared belief (system). Our laws, and the rule of law, aren't created in a vacuum, they derive from moral (fundamental) law (belief in crypto is a religion in the broad sense but it has no moral foundation). Absent the foundation of moral law, we are but a mob of monkeys.

  The Deep State

  2021-02-19 09:17:04
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  Moral law in one sentence: Do unto others as you'd have them do unto you.

  Everything necessary is derived from that one sentence. You can put your favorite sauce on it (Christianity, Judaism, Hinduism, etc..) but it's all going to boil down to the Golden Rule. No gods necessary.

  P.S. The last businessman I'd trust is the one who wears his religion on his sleeve.

  Ricardo

  2021-02-19 11:03:45
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  It's possible but there are plenty of examples of non-Christian "market minorities" building vast trade networks in diaspora communities. Jewish merchants are an example, of course, but so are the Hokkien and Teochew-speaking Chinese, and certain communities of Hindu Indians.

  The direction of causality is probably in the other direction: Christians established trade relationships in various places and then Christianity followed.

  Brian Moore

  2021-02-19 10:18:57
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  #

  There are cryptocurrencies (not always the same ones!) with much lower fees, faster transaction times, and stable prices (stablecoins). Crypto is no longer just bitcoin.

  This isn't a plug, but it's a service I do use: https://crypto.com/en/pay.html

  Okay, I guess it is a plug. Sorry.

  Marc Geffroy

  2021-02-19 11:01:04
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  #

  how would bitcoin affect the Fed's ability to regulate the money supply? or that of any central bank?

  daguix

  2021-02-19 11:11:50
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  Hide Replies
  #

  If bitcoin payment is so wonderful, why the number of transactions per day in bitcoin has not grown since 2018? https://www.statista.com/statistics/730806/daily-number-of-bitcoin-transactions/#:~:text=Bitcoin%20around%20330%2C000%20daily%20transactions,400%2C000%20in%20early%20January%202021.

  TGGP

  2021-02-19 14:40:37
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  #

  Each bitcoin "block" can only validate so many transactions, and despite Satoshi himself indicating that blocksize should increase as Bitcoin became more popular, miners mostly rejected big-block forks (like "Bitcoin Cash"). Of course, that is itself one argument against the wonderfulness of Bitcoin, but that doesn't apply to other cryptocurrencies.

  Bitcoin Help Desk

  2021-02-19 20:58:12
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  #

  Number of transactions is not the same as total value transacted.

  Daily volume in 2018 ~$1b. Daily volume in the last month exceeds $8b.

  https://www.blockchain.com/charts/estimated-transaction-volume-usd

  The Original D

  2021-02-19 21:43:59
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  #

  I'm bullish on crypto but not Bitcoin, especially not for payments. It's a deflationary currency.

  Bitcoin Help Desk

  2021-02-19 12:29:41
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  #

  Bitcoin is simply a new option for moving money / value, like email was a new option for moving written information, and then later attachments, etc...

  If the current way is Exporter -> exporter's bank -> currency conversion -> importer's bank -> importer... this is likely oversimplified. Perhaps it will run through a gov't import/export office, have duties assessed, perhaps the exchange rate will be 'official' versus street price, etc...

  With crypto it can be as simple as email: exporter has balance, gets address from importer, sends crypto, done. As fast as email.

  If you need to dampen exchange rate risk, use a 3rd party on your side. When Bitcoin received, immediately convert to local currency (for a fee to the person providing this service, bank or not).

  Bitcoin has been increasingly used for remittances (high fees are a real problem currently) because receivers won't need to show up to a pick-up window where they get shaken down for 30% of the transfer by local gangs.

  Let it flourish, and encourage users to comply with laws along the way.

  New tech, new risks, new opportunities. Unfettered.

  Ricardo

  2021-02-19 15:35:20
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  #

  "If the current way is Exporter -> exporter's bank -> currency conversion -> importer's bank -> importer... this is likely oversimplified"

  The only part that is oversimplified is the settlement. SWIFT is nothing more than a secure messaging system. Bank A sends a message to bank B saying "Add $1 million to account xyz. This is from bank A and we will settle later." SWIFT messages have the force of contracts and are incorporated into legal and regulatory systems so they are arguably better than entries on the blockchain. It is a decent system that could still almost certainly be improved.

  mkt42

  2021-02-22 02:26:30
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  #

  I was shopping at a Safeway this evening and noticed that one of the vending machines (or maybe it's a banking machine, I didn't look closely) has a sign on it saying "Buy Bitcoin here". I don't know how many people have been doing that: using a vending machine to buy Bitcoin.

  Steven

  2021-02-19 11:37:38
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  #

  I find it hard to believe crypto currencies will ever become very important. They are designed to evade state surveillance and are mainly used in criminal activities. Paying for a prostitute, drug deals, evading import/export restrictions. Once they get big enough that they are no longer merely a nuisance, the state will crack down and regulate them. At that point, there will be little to recommend them over traditional currency. I see them as primarily a medium for financial speculation.

  Comments for this post are closed

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  Privacy Policy Marginal Revolution 2023
Here is an email from a loyal MR reader:
 I’ve been importing a few things for a new business. Such a huge opportunity for crypto. And not just for Nigerians.
The payments are a real pain. Many vendors already accept bitcoin. And you could eventually use smart contracts to provide a version of Alibaba Trade Assurance that works for places other than China and with every vendor. The language barrier makes it seem like you are answering an email about a Nigerian Prince, so some kind of escrow to build trust will expand who is comfortable importing.
I’m doing this because it is about 40% of the price to import yourself for the products I need rather than buy from someone on Amazon (who probably bought from a similar exporter). There are very real barriers to be knocked down and eliminate a whole host of middlemen in many products.
I will definitely be using crypto payments for future transactions. The convenience of crypto increases a lot as you do larger orders and build trust with suppliers.
The demand for crypto - Marginal REVOLUTION
https://marginalrevolution.com/marginalrevolution/2021/02/the-demand-for-crypto.html?utm_source=dlvr.it&utm_medium=twitter