Eight Things You Need To Know About Cryptocurrencies

Back in the 1990s, HBO was striving to develop a way for their content to be interactively streamed on cable lines. Programmers tried to tell them that the technology to do that was already available: the internet. The higher-ups at HBO insisted it was just a fad…a fad that has now made its way into the homes of billions.

It’s a necessity. When you’re buying a home, you check the internet speed. When you’re on the road, you look for WiFi hotspots so you can continue your internet addiction. There is no escaping it in today’s tech-driven world, and more changes are soon to come whether you see them as improvements or disillusioning.

What You Have To Understand

When Bitcoin hit the mainstream ears back around 2010, some people laughed at it, some people ran towards it, and many traditional investors ran away from it. Since then, Bitcoin has remained incredibly stable as a whole, with its value ever increasing and many new competitors always trying to join the market. Even with nearly ten years under its belt, however, most people are still very confused about what Bitcoin even is. And, like the internet, many people in all sorts of positions are making the same mistake they made 20 years ago and saying, “It’s just a fad.”

#1 It’s Not A Fad

Cryptocurrencies aren’t going anywhere. Cryptocurrency benefits from two trends that date back at least five-thousand years.

First, back two thousand years ago, the world was based around Theism. That meant, if you got sick, you’d go and pray assuming you were sick because you had sinned. Then, we moved to Humanism. That meant, if you got sick, you would simply head to the nearest doctor’s office. But, today, we’re living in a world of Dataism. Now, if you get sick, you won't ask for help from a deity or a doctor. Instead, you’ll get EEGs, MRIs, and genetic testing to figure out the solution. In other words, we used to trust gods, then we trusted each other, and now we trust data.

Second, our society moved from bartering, to physical values (like gold and silver), to money backed by gold/silver, to paper money, to bank-held money and now to purely “data money”. I.e., cryptos.

#2 Speaking Of Cryptos

Cryptocurrencies aren't “cryptos”. Crypto is the portion of the technology that makes Bitcoin a secure transfer medium. It’s based on a type of math, but if you’re going to refer to cryptocurrencies, call them “data currency” or just “currency” (because sooner or later, cryptocurrencies are going to be about all we know and use!).

#3 It’s Not A Currency

But, even though you might be best off calling it “currency” it’s actually not currency. That’s because currency requires two things:

A Store Of Value

In other words, if you say you’ve got a million bucks, that’s the number stored by your bank.

A Means Of Carrying Out A Transaction

For example, if you take $5 out of your wallet, you can walk into a store and purchase something with it.

Bitcoin does have the first. I.e., you might have 200 coins in your Bitcoin wallet. But, it doesn’t have the second because the process to spend a Bitcoin takes about five minutes to actually be completed. On the other hand, some cryptocurrencies have the second aspect but not the first. A few have both right now, but that makes them something else.

#4 It’s A Contract

If you’re confused on this one, it’s because you’re still looking at cryptocurrency as an alternative to a paper dollar. Your paper dollar can’t do any of the things cryptocurrency can do. Yes, you can take $5 paper and buy a sandwich, but you can’t use paper money to store files. That’s what a filecoin does. You can own a filecoin and the contract within this virtual coin allows other people to share files with that coin. It’s like a decentralized alternative to DropBox.

So, Cryptocurrency is considered a contract. They can be used to replace escrows, wills, and other types of contracts. Currently, the contract law industry is worth $400 billion—and it’s all going to be replaced with crytocurrencies sooner or later.

#5 Most Cryptocurrencies Are Scams

That’s right, 95% of cryptocurrencies are scams. All the competitors popping up with the new, greatest cryptocurrency will probably end up with a value of zero.

#6 The Government Loves It

Do you think cryptocurrencies are going to be brought down by the government? Doubtful. It’s an untraceable way to transport millions of dollars.

#7 It’s Real Value

When you get a cryptocurrency, you have real value. The only reason a U.S. Dollar has value is because we believe it does.

#8 Only Bankers Call It A Fraud

The only people who have stood up to say cryptocurrency is unsafe, unfair, or a downright fraudulent way to handle transactions are bankers who know if, or when, people switch to cryptocurrency, they will be cut out of the equation.

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