3 Reasons People Fear Cryptocurrency (And Why They Shouldn’t)
The past couple of decades or so have brought many changes in technology. For instance, most of us now use the internet frequently, and usually on our mobile devices – not even on computers anymore.
We have phones that let us use technology to do everything from playing music to watching videos. Today we even have cars that park themselves perfectly, reducing stress on their drivers.
Certainly, these examples are only a scratch on the surface of the number of advances we have seen. But with so many things changing you might think the one thing that hasn’t is money. Or has it?
If you think about it, money was bound to evolve at some point as well. I’m not talking about credit cards. They have obviously been upgraded to chip technology and will probably evolve again soon to NFC, or near-field communication. The money I am talking about evolving is paper money.
Less than ten years ago a new form of digital currency was created called cryptocurrency. But it is not yet being widely used. Despite this, other advances in technology seem to be accepted and used in the mainstream much faster. What is holding people back from using cryptocurrency?
It could be fear that is holding people back from using it. In fact, there are a minimum of 3 reasons people fear cryptocurrency (and why they shouldn’t).
1. People Don’t Understand It
People generally fear what they don’t understand. It makes sense, then, to learn all you can about the subject you are afraid of.
First, let’s define cryptocurrency. There are several different definitions when you look the word up on the internet. But to put it simply, it is a digital asset protected by encryption that can be used in financial transactions.
Exchanges of money using cryptocurrency are not done by transferring paper money or metal coins back and forth, though. Cryptocurrency can’t be held in your hand. Instead, transactions and monetary exchanges are completed through computers, which is where cryptocurrency exists.
2. It Isn’t Legal Tender
Cryptocurrency is currently not classified as actual legal tender by the United States government. This may be another of the reasons people fear cryptocurrency.
Another reason people have to be afraid of cryptocurrency is because not all countries presently accept it. Nevertheless, the number of countries agreeing to accept it is growing.
But let’s backtrack to our current monetary system to get down to why people shouldn’t fear the current classification of cryptocurrency.
Until 1971 the US Dollar was backed by the gold standard. Once former President Nixon announced he was taking the gold standard away it became backed by fiat only.
In other words, the dollar still had value because the government said so.
Going back to cryptocurrency, the same thing could hold true. Even though the government doesn’t back it, we as a people can deem that it holds value because we said so.
3. Cryptocurrency May Lose Its Value
An additional reason people fear Cryptocurrency is that it could lose its value. There is no question it has had its ups and downs in the market for investors over the past few years.
In comparison, gold values have remained steady during the same time frame. But even though it has seen sharp increases and dramatic dips, most likely it is here to stay.
The reason it may stay is because the transactions made using is are more secure than the ones using our current, government backed legal tender. It is difficult to forge, hack, or steal. Those attributes are just why it was created and why it will stick around.
There have definitely been changes in technology in the past decade or two, the emergence of cryptocurrency among them. But people need not fear it. Rather they should learn about it and embrace its continued use.