The highly Volatile crypto market
Although the first cryptocurrency Bitcoin was released back in 2009, the world of cryptocurrency started to get real attention in late 2016 when the price of Bitcoin and other cryptocurrencies began to rise. The entire crypto world has come a long way since then. Bitcoin and almost all other Altcoins have been criticized for many different reasons.
One of the leading reasons is that the prices have never really been stable, one day a cryptocurrency might be worth $1 and the other day the price might shoot to $4 or take a sharp drop to $0.1. A majority of the critics seem to think that the cryptocurrency’s case is very similar to the “Tulip Mania.” Tulip Mania was a period when the contract prices for some fashionable tulip bulb skyrocketed and then crashed within one year.
Is Bitcoin a “Pyramid Scheme”?
Critics also say that Bitcoin was a huge “Pyramid scheme” where the early buyers were encouraged to buy the currency in order to pump up the price of it. Once the price rose, the early buyers made a lot of money resulting in creating a “Get rich overnight” illusion for the future investors. The overall effect is that more buyers start to invest in hopes of getting rich fast. Later on, other cryptocurrencies tried following Bitcoin’s footsteps.
A few critics also say that cryptocurrency was a global virus where the investors were infected with the obsession of the daily price movements. On the 18th of October 2018, the head of the Central Bank of Russia said that this was the “Crypto fever.” He added that happily, the “crypto fever” is now gradually diminishing due to the super bearish market during 2018.
He stated “Fortunately, the crypto fever has begun to diminish. Technologies such as blockchain have inspired great enthusiasm, but now, as far as we can see, the approach to them is more sober.”
The head of the Russian Central Bank didn’t just criticize cryptocurrency. She also praised it by saying that Business Magnets and big firms deserve credit for linking different cryptocurrencies to their businesses. She added that they didn’t just use the tech to attract investors. She also praised Initial Coin Offering or ICOs, saying that it is “a perfect method to raise funds.” for a project.
However, she also warned the investors, saying that due to the decentralized nature of cryptocurrencies and lack of laws or regulations regarding cryptocurrencies there is a high chance of the ICO trying to do fraud.
She concluded by saying “Digital finance is no longer the world of the advanced consumer. It is the world of the mass consumer.”
Conclusively, regardless of the case of cryptocurrencies, we can’t deny the fact that Bitcoin and other Altcoins made some people millionaires. Moreover, some cryptocurrencies have a lot of practical benefits for everyday tech users. For example, there are people who are donating money through Bitcoin to the flood victims who do not have access to any banks or money.
This is much more convenient as no one has to physically go to the areas affected by the flood instead they can simply use their smartphones to transfer the cryptocurrencies to a wallet used for donations.