Questions Can Be a Crypto Investor's Best Friend

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11 months ago

It is never for me, when it comes to cryptocurrency, that I am a naysayer. It is simply that I always have a lot of questions. The manner in which I question cryptocurrency may come off, at times as being a bit skeptical. It may make me sound like a naysayer. But when you really get down to it, isn't a little bit of skepticism actually a healthy thing?

It is not all that different than the way I approach anything already proven that I may invest in such as the stock market or real estate or any other thing.

You ask lots of questions, and in so doing, you learn the things you don't know, and you foster a deeper understanding of everything about what to do next. It helps for one to make an educated decision about what the next right thing to do is.

And let's face it, regardless of what anyone feels about cryptocurrency, the fact is that it is still largely uncharted territory. Is it the future or is it a fad? Is it something that will change the world, or is it just a blip in the annals of current history that we think it will?

The point is no one knows. And therefore, it is important to continue to ask questions and to be a little bit skeptical.

That's not saying no to it. It is simply trying to better understand it and determine how best to deal with it. The more we know, the more equipped we are to come to the right conclusions about things. The more questions we ask, the more we discover—especially potential problems.

Since my own humble beginnings within this cryptoverse, as I like to call it, there has been one thing that has always seemed to be a common theme around it.

Cryptocurrency is a way to overcome the pitfalls and shortcomings of centralized currencies.

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But is it? It is an important question to ask as stock markets tumble, and inflation bursts our hard-earned dollars into flames. If cryptocurrency was our only currency at all this very moment, we'd all be in a world of hurt worse than perhaps the Great Depression dealt us—or any notable collapse of any currency for that matter.

Take inflation only. At least in the United States it has been around 8%-9% respectively, meaning $1 is now worth about 90 cents from a year ago. $1 of crypto would be worth about 25 cents. That's a crushing 75% drop in value making inflation look like a tiny inconvenience compared.

So, the question becomes, what is the advantage over fiat, really? Should it not be, that with all that's happening around the world economically right now, that cryptocurrency would be in the midst of proving its point? Should this not be an "I told you so" moment?

A 75% drop in monetary value in such a short period of time would spell disaster for anyone relying solely on whatever currency is in use. And that's how much the value of cryptocurrency has fallen.

Some might say that if there were wider adoption, or if crypto was the only currency that much of that volatility would be removed from the equation by default. But would it?

Fiat is not a perfect thing, of course, and it is not always fluid. It is why those who issue it need to constantly work to keep it as stable as possible. If there is no central body to fix problems, who does fix it? And how can we be so assured that crypto simply escapes the potential of ever having any problems at all?

Sure, so Bitcoin, for example, will have a limited supply. 21 million coins to be exact. How does that deal with economic expansion? Population advancement? What if it is one day determined that there is not enough to go around? Who decides to increase it? And at what point does it not become similar to fiat in that we just "print" more of it to keep up with what we need to do?

Beyond that, one other question arises from all of this. If crypto is separate from world economies and inflation, why is it now directly impacted by all those things?

Anyone in the cryptoverse now, has not escaped the woes of the fiat world. In fact, those in the cryptoverse have fared much worse in the grander scheme of things. If you are in the fiat world you are presumably doing 65 times better than anyone relying solely on cryptocurrency.

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At the end of the day, when it comes to any form of money, one thing we are quite aware of, is that to this day there is no perfect currency or monetary system. Throughout history, there never has been. How can we be assured that suddenly, 13-years ago, the very important Holy Grail of money was finally discovered, and alas—is the ultimate end all be all answer to all of the world's money problems now?

And why didn't cryptocurrency escape what's happening around the world economically now? Why did cryptocurrency, apparently operating independent of fiat, become a victim of fiat's problems despite that? And beyond that, if it is better than fiat, why did it suffer a much deeper calamity?

Did fiat fare better because someone is there to try to right the ship? And can it be argued that cryptocurrency suffered worse because there was no one to right it?

How does that argue in favor of decentralization? How does it prove it is safer, or better, or more stable to be decentralized?

Centralized currencies have outperformed decentralized ones, and by a lot. So far.

Again, none of this commentary is intended to naysay cryptocurrency or to write it off as defunct, invaluable, or unviable. It is simply to ask, what I think are important questions, before anyone writes off fiat entirely and we go all in on something that may be worse than what we had before.

More important than that, financial futures are at stake. It is an important question for anyone to ponder, who is considering that their best decision now, is to potentially put at serious risk, their entire personal fortunes based solely on a premise, and faith.

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It also goes hand in hand with the old adage of it being better to deal with the evil you know than the evil that you don't. And if you have a desire to explore new evils, you better be at the ready to ask some very important questions before you explore at all, or worse, take the ultimate leap into it.

The bottom line is that the more we rely on belief and faith, the less inclined we are to understand and see the possibility of disaster. Being skeptical, at least just a little bit, gives us room to ask questions and discover truths that faith can potentially blind us from.

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11 months ago


I see a solution to this. A decentralised algorithmic stable coin, like DAI, but not 1:1 to USD, but its value would have to increase annually by e.g. 3% to USD. The transaction fees should be at most like BCH. That would be enough to use it for spending and saving. And such a coin would be immune to speculation.

But Fiat will probably always exist.

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