Cryptocurrencies are a pyramid scheme

Some altcoins are indeed fraudulent projects, created only to generate funds at the expense of gullible victims. All of them face a predictable end – complete devaluation, delisting from cryptocurrency exchanges, and sometimes the attention of law enforcement.

The power of Bitcoin

Can Bitcoin be called a pyramid scheme? No, Bitcoin has no centralized authority and its only creator is anonymous Satoshi Nakamoto, whose real identity is still undisclosed. After buying BTC, investors are not put on any “level”, as is often the case with pyramid schemes, and their return on investment depends solely on the market situation, which is essentially on the actions of other investors.

Cryptocurrencies are not backed by anything

Since the US dollar moved away from the gold standard in 1971, it – like all other fiat currencies – is also unsecured. Bitcoin has value because of the technology behind it, as well as the decentralized database, which no body can control. And crypto projects are supported by large and growing communities whose capital and influence are now commensurate with the world’s major corporations.

Bitcoin and the dollar

The crypto industry is dangerous because of hacking attacks

Hacking and fraud mostly happens through phishing attacks – in this situation, the victim is the one who gives their data or assets to the hackers, sometimes without even knowing it. However, such attacks occur not only in the crypto industry, but also in traditional finance.

The volume of losses from attacks on different crypto projects

Newcomers to the crypto industry can indeed be at high risk of being scammed, Decrypt reports. In this case, they need to put a lot of effort into educating themselves about digital assets. However, it’s worth it – understanding all the processes of the crypto market could bring profits in the next bull run and secure it at the same time.

Bitcoin failed to become popular

The Internet was invented back in 1969, but the first consumer boom did not occur until the mid-1990s. By 1995, there were only 40 million people on the Internet. The technological revolution is not a one-day event; it can last for decades, even in the case of the most modern concepts.

Growth in the adoption of different technologies

Bitcoin already has more than 100 million active users worldwide. As a reminder, the widespread adoption of mobile internet, apps, social media and e-commerce only occurred after the introduction of the first iPhone in 2007. That’s 18 years of the “consumer” Internet. Bitcoin and the crypto-industry are only 13 years old, which means that another breakthrough is sure to come in the future.

Cryptocurrencies are a tool for criminals

Although Bitcoin and other cryptocurrencies have become a favoured payment method for certain types of crime – and especially in extortion – the number of criminal-related transactions in the industry’s overall activity is relatively small and declining every year. In other words, only a small proportion of crypto transfers are actually made by criminals.

Cryptocurrency hacker

Blockchain is not something useful

Blockchain applications are always useful when something can be improved or made more efficient in terms of decentralisation, such as legacy banking software. This is why even banks are now actively testing new blockchain-related projects. The technology has already become an integral part of innovation.

I can’t even buy a cup of coffee with Bitcoin

This is partly true – Bitcoin has not yet caught on as an everyday means of payment. The cryptocurrency is highly volatile, making everyday small transactions for buying goods impossible for most people who are used to ‘stability’.

Commissions on the Bitcoin network over the past year

However, technology in crypto hasn’t stood still either. Especially the second-tier Lightning Network solution – thanks to it, you can actually make transactions in BTC almost instantaneously and with near-zero fees. In addition, Bitcoin can already be used to buy relatively expensive assets – there have been precedents for this in the past.

Then again, the cryptocurrency world has enough modern blockchains like Solana, Avalanche and Azero to make transfers quickly and cheaply. And in El Salvador, Bitcoin is the official means of payment alongside the dollar.

Cryptocurrencies are killing the planet

Bitcoin mining requires high energy consumption because of its Proof-of-Work algorithm, which involves complex computation of mining farms as “proof of work” for the reward. However, Proof-of-Work is only one aspect of mining that does not apply to all altcoins. There are other projects with much leaner algorithms.

Web3 is very hard to use

Compared to familiar apps like Instagram or PayPal, Web3 services like OpenSea or MetaMask can seem frustratingly complicated. This is also true for new blockchain games, many of which are based on a play-to-earn model, where users can earn crypto for the gameplay itself.

Stages of development of the internet

But the good news is that the days of “unfriendly” user interfaces may soon be behind us. Until then, the Web3 was all about building the underlying infrastructure, not customer interaction. Give it a few more years and it will be transformed beyond recognition.

We believe that criticism is a normal part of the cryptocurrency industry because it can improve what is happening in the niche. And if it's about a trivial aversion to Bitcoin, which is true for gold fan Peter Schiff, that can be explained by a lack of understanding of the basic features of cryptocurrencies and the benefits they bring to humanity.

What do you think about it? Share your opinion in our Millionaire Crypto Chat. There we discuss other important developments in the world of decentralized assets.