First off, I am not anti cryptocurrency. I am not speculation. I am anti principle. If you want to invest in cryptocurrency, feel free to do so. But I recommend investing at most money you would be willing to lose and never miss.
1) Lacks principle- The reality is we only understand how things work based on past experience. We don't have large swaths of knowledge and data to understand how cryptocurrency works. This is less than 10 years old. You are dealing with untested waters.
2) Problems when people are financing finance- People finance cars. People finance houses. People finance Businesses. All these things are assets that have an underlying value. Cryptocurrencies are only valuable as a storage of value. When people are financing finance such as the Wall Street Crash of 1929, 2007 financial crisis or Tulip Mania or the south sea company, you tend to see busts.
3) Lacks intrinsic value- What is money useful for? Money has three features; a medium of exchange, a unit of account, a store of value. Hypothetically cryptocurrencies have these features. However, they lack two of these three features. It does well for storing value. However, it isn't well used as a medium of exchange. With the exception of a few vendors, most people do not buy stuff in cryptocurrencies. Most do not measure objects in terms of bitcoins, but in dollars, yen and pound sterling. As it currently stands, for the 8 major currencies in the world, the highest rate of inflation is 3% which is the pound sterling. Why would I want to own a cryptocurrency? To make money?
3) Huge growth in a short amount of time- Most of this growth in the total market capitalization has occurred since May. On May 1st of this year, the market capitalization was 38 Billion USD. Today of writing this, the market capitalization is 185 Billion USD. This is an uptick of 386% within 6 months. That is about 64% a month. Facebook's price share increase per a year on average is 75% since its IPO.
4) Anybody and everybody is getting in on the craze- How many cryptocurrencies do you think exist? Over 700 different cryptocurrencies. When there is no meaningful barrier of entry into creating a new one. Why do you need 700 different cryptocurrencies?
If you think I am wrong, go get some crypto coins. But do not go in assuming you have all the information.
1) Lacks principle- The reality is we only understand how things work based on past experience. We don't have large swaths of knowledge and data to understand how cryptocurrency works. This is less than 10 years old. You are dealing with untested waters.
2) Problems when people are financing finance- People finance cars. People finance houses. People finance Businesses. All these things are assets that have an underlying value. Cryptocurrencies are only valuable as a storage of value. When people are financing finance such as the Wall Street Crash of 1929, 2007 financial crisis or Tulip Mania or the south sea company, you tend to see busts.
3) Lacks intrinsic value- What is money useful for? Money has three features; a medium of exchange, a unit of account, a store of value. Hypothetically cryptocurrencies have these features. However, they lack two of these three features. It does well for storing value. However, it isn't well used as a medium of exchange. With the exception of a few vendors, most people do not buy stuff in cryptocurrencies. Most do not measure objects in terms of bitcoins, but in dollars, yen and pound sterling. As it currently stands, for the 8 major currencies in the world, the highest rate of inflation is 3% which is the pound sterling. Why would I want to own a cryptocurrency? To make money?
3) Huge growth in a short amount of time- Most of this growth in the total market capitalization has occurred since May. On May 1st of this year, the market capitalization was 38 Billion USD. Today of writing this, the market capitalization is 185 Billion USD. This is an uptick of 386% within 6 months. That is about 64% a month. Facebook's price share increase per a year on average is 75% since its IPO.
4) Anybody and everybody is getting in on the craze- How many cryptocurrencies do you think exist? Over 700 different cryptocurrencies. When there is no meaningful barrier of entry into creating a new one. Why do you need 700 different cryptocurrencies?
If you think I am wrong, go get some crypto coins. But do not go in assuming you have all the information.