Bitcoin adoption has accelerated amid unprecedented central bank money printing and the coronavirus-induced digitalisation of day-to-day life. The conversation is changing.
“Crypto is a fad and bubble!” is turning to “Crypto is another investment asset class.”
“Why does Bitcoin have value?” is becoming “Why does the US Dollar or the Rand have value?”
“There’s nothing backing Bitcoin!” is changing to “Bitcoin has money and gold-like properties.”
Weary millennials, early adopters and cypherpunks, are you tired of explaining cryptocurrency to your parents? If yes, this article is for you. Crypto newbies, welcome: this non-financial advice article is for you, too.
Let’s get you started with answers to common crypto skeptic questions.
1. Crypto is not real
Crypto is very real: just because it is not tangible it means that it does not exist.
Think about the value behind Facebook, WhatsApp, Instagram — the networks that power the value in these businesses aren’t tangible, but they are very real. Crypto is software, like Gmail, Hotmail or Adobe. When you get an email, there’s no doubt it’s real. Same with crypto, only you have to look on the blockchain to see your crypto (which is publicly available and easy to view).
Contrary to popular belief, bitcoin is in fact backed by something. It is backed by the only thing that backs any form of money: the credibility of its money properties. Crypto is useful as a means of exchange; these properties include scarcity (for certain cryptocurrencies like Bitcoin and Litecoin), durability, divisibility, fungibility and portability, among others.
2. Is Cryptocurrency safe?
Cryptocurrency can be wildly unsafe — especially in the early days (think 2010–2017). Valueless digital coins, pump-and-dump scams, wallet hacks, and massive market manipulation were more common when fewer people and regulators were involved.
If you look to the bottom half of the cryptocurrency market, you’ll find many of these today. Here there be dragons.
But, just like the stock market, investing in cryptocurrency is about risk tolerance. This is why institutional investors have stocked up on Bitcoin and Ethereum and other reputable cryptocurrencies, as opposed to questionable alternatives.
Revix’s Top 10 Crypto Bundle is like the JSE Top 40 or S&P 500 for crypto and provides exposure to the top 10 largest cryptocurrencies, which make up more than 85% of the crypto market, through one investment. The Bundle provides exposure to only the most reputable crypto projects in the space.
This is not financial advice: know your volatility tolerance and make decisions accordingly.
3. Aren’t Blockchains a Buzzword?
Blockchain became a buzzword a few years back, but don’t let that convince you that you need a blockchain — or that the technology is only a trend.
Imagine a world where foreign aid didn’t get consumed in the bureaucracy but went directly to the beneficiary under a smart contract (a fancy name for a programme that runs on a blockchain)? Rather than a $60-billion car-service aggregation like Uber, why couldn’t we have a distributed app on the blockchain that manages all these vehicles and handles everything from reputation to payments? Ultimately, they’ll be autonomous vehicles moving around. Or blockchain Airbnb? This is all about the value going to the creators of value rather than to powerful forces that capture it. In the process, we can protect our privacy.
We’ve never seen a technology that had greater potential for humanity than blockchain does.
4. It’s bad for the environment
This is true — as is the car you drive, the electricity you use to power your house, the plane trips you take, and the cotton you wear. Everything we do is terrible for the planet, but perhaps not as headline-grabbing.
Articles about the environmental cost of Bitcoin forget to calculate the environmental cost of our existing financial system, because they are subsidised by that system.Think of all of the bank-owned buildings airconditioned and heated 365 days a year, all of the bank employees who drive their gas-fueled cars to work, all of the servers and computers that back our credit card purchases, and all of the infrastructure that goes into making our bank accounts secure.
The financial system already has a huge environmental cost; it’s just harder to calculate.
One of the crypto principles is to create more green energies and preserve the environment.
People mine crypto to make money. Energy is one of their primary costs.
When they can find cheaper, renewable energy, they are incentivized to do so. More than 75% of crypto-miners are reinvesting in renewable energies and methods to preserve the environment.
Think of Bitcoin as the future of your bank account, rather than your credit card.
5. Most of the world’s governments will never accept it
Up to date, there is a major government’s acceptance of crypto, and how they are embracing it. It is too big to deny its acceptance or existence.
A good number of governments recognise cryptocurrencies and its benefits and are continuously working with its leaders to provide regulation and more opportunities.
Those governments that are not-too-friendly with crypto, have found themselves in a dilemma, as crypto represents innovation and new standards.
6. Don’t criminals use cryptocurrency?
Yes. They also love the U S Dollar, South African Rand and every other currency out there.
It’s accurate to say that criminals will always look to use cutting-edge technology to operate, but pretty much the majority of crypto users are normal, law abiding citizens. Revix, as a reputable company within the crypto space that has been backed by JSE-listed speciality investment group Sabvest, as many others, follows regulations and proactively works to stop criminals from using our platform.
Remember the Bitcoin blockchain records all transactions in connection with the addresses involved. Once you connect someone’s address to their real-life identity, you know exactly what they’ve done with their crypto.
Most importantly, the Bitcoin blockchain is unchangeable i.e. immutable. This means that you can’t hack into it and delete transaction history. Doing such would require an astronomical amount of computing power.
7. It’s too expensive
Well… if we consider that you can start with as little as R150 with Revix, what is the definition of expensive?
We always look at the price as a measure of quality, success or efficiency. But like many other things, crypto varies in matter of prices, uses, preferences, like any other brand in the world, and for sure, every person has a preferred one. So when you buy those sneakers from a certain brand, are they too expensive even when you like them? No … so the same happens with crypto: choose that one that accommodates you and that you believe in.
8. It can be lost forever, and ever …
Is very rare that this happens. Actually there are many ways to protect it, and to hold it, either individually or with dedicated companies such as Revix, that offer you a platform to invest and hold in crypto.
You can lose crypto, but that’s the exception, not the norm. Reputable crypto companies, exchanges and related companies use the most strict security protocols and transparent policies, as they are a crucial part of the crypto ethos.
Crypto is still pretty new and can sometimes feel too complicated or scary, especially for those who are skeptical about it.
It is normal that family, friends, colleagues and more, are unfamiliar with it; that is why we give you these little tips to get started as a “guru” guiding them easily through the exciting waters of the crypto space.
Cryptocurrency and blockchain are here to stay, though what they hold for the future, no one knows. Whether you invest in cryptocurrency or not, Bitcoin and other currencies provide perspective on how our world operates now, who’s holding the reins, and how all this might, slowly, and then all at once, come crumbling down.
How to get started with Crypto?
If you’re looking for an easy, reliable and secure way to enter the crypto market and track your returns, then Revix is the best place to start.
The company offers a low-cost and easy-to-use platform that provides exposure to individual cryptocurrencies, ready-made crypto baskets which are like the JSE Top 40 but for crypto, and a dollar-based savings vault offering you a high-yield passive income.
Revix brings simplicity, trust and great customer service to investing. Its easy-to-use online platform enables anyone to securely own the world’s top investments in just a few clicks.