Cryptocurrencies represent significant potential for their ability to equalize the playing field. With this form of digital asset, anyone, regardless of their place of birth, has equal rights to participate in the financial market.
Unfortunately, the ones that are believed to use these assets the most are coincidentally those who have the least heard voice when it comes to sharing their benefits — a sad reality since many in this target group live in developing nations. Therefore, with a properly designed economic system, the world might achieve tremendous wealth, effectively wiping out all the poverty in the world. The resulting questions are: Who will be willing to participate in this fundamental change, and what is holding the rest of the population back from following their lead?
In a recent AMA, Cointelegraph sat down with Edward DeLeon, a crypto economist, early Bitcoin (BTC) investor and the CEO and founder of blockchain technology company Anatha, to discuss some of the most common drivers of FUD — fear, uncertainty and doubt — in the market today and rationalize some of these misconceptions.
DeLeon sets the stage with a brief introduction to the fear-induced misconceptions he often comes across in the projects he participates in by stating, “Crypto is a new form of money, and you shouldn’t be entering into it thinking how do I make more U.S. dollars. Doing so would be a bit like investing in a light bulb and saying, ‘Wow, this light bulb was so amazing I could use oil-burning lamps more.’”
Ultimately, “You’re trying to look at new technology from the perspective of the old.” In reality, this is one of the biggest mistakes people make today.
Is mining to blame?
Many became fearful of a cryptocurrency market downturn when Elon Musk, previously a strong supporter of digital assets, stopped accepting Bitcoin in exchange for his electric vehicles — a decision said to be driven by the environmental impact of cryptocurrency. In answer, DeLeon shares the importance of looking at the reports that indicate electricity usage.
DeLeon highlights that many investors overlooked the fact that the majority of cryptocurrency mining was happening in China. Looking more closely at China, DeLeon points out that many places “don’t have an electrical grid, that is to say, they build a power plant out in the middle of nowhere and with the intention that someday they’ll build a grid and attach it to the rest of the country. However, they’re producing more energy than they could use, during that time, so they are dumping the extra electricity into the ground.”
Naturally, young entrepreneurs would see the total amount of electricity produced and think it is being wasted. DeLeon clarifies that people often forget, “When you invest electricity in the network, it makes it more secure and, therefore, more valuable.”
There is no such thing as stability
As passionate as cryptocurrency investors are, many have found that when sharing their potential with the rest of the world, they are still fighting an uphill battle that requires those who disagree to change their minds. Instead of providing arguments on changing the world's mindset, DeLeon shares how unfortunate this is, making the comparison between cryptocurrency and personal computing.
He states, “It’s like saying I don’t believe in the internet or mobile phones. It doesn’t matter if they believe in it or not. This stuff is going to continue to grow and prosper.”
Of course, despite cryptocurrency growth trajectories, the assets’ prices are not without massive fluctuations, leading to another major fear of new investors. For many unfamiliar with the market, the cryptocurrency industry is perceived to be too volatile to participate in. DeLeon debunks this belief by reminding listeners that volatility is an opportunity. In his words, "If you had no volatility, it would mean that the market had no opportunity, that is to say, it would just be running sideways."
DeLeon compares the sideways market to the concept of stable currencies, which he believes is a mistake. He shares, “There is no such thing as stability in the natural world. Everything is eroding. The U.S. dollar is worth less today than yesterday, and that statement has been true every day of your life.”
For investors, the question becomes not if volatility is good or bad, but rather if an investor can navigate it.
Opportunities that don't cease to exist
If volatility means opportunity, does the absence of volatility mean a lack of opportunities for the crypto market? As the AMA draws to a close, DeLeon agrees that this assumption is completely correct. However, in a positive spin, he reminds the audience that there will likely be something else to move on to, although the world won’t need to worry about that anytime soon.
He believes, “Not anytime soon, but at some point in our lifetime, cryptocurrencies might become relatively stable compared to where they are now, so if you’re looking for ways to continue making sizable gains, you would have to look elsewhere. But, I don’t foresee that happening anytime soon, and I think we’re about two to three market cycles [away], which puts us about 10 to 12 years away from seeing anything plateau.”
DeLeon concludes the discussion by reminding users that cryptocurrencies and other decentralized assets are a tool, such as a wrench or a hammer. When used properly, they can build a home and provide shelter, but when put into the wrong hands, they have the potential to hurt people. For prospective investors and active enthusiasts, the Anatha founder encourages listeners to use their time and energy on projects that help people. In this sense, as an enabler for good, cryptocurrencies can truly make the world a better place.
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