Cryptocurrency sounds great — it is decentralized, it makes middlemen useless, it takes power from greedy banks and it eliminates ‘trusted’ third parties that are not always to be trusted but always to be paid. The question is — what prevents altcoins from being widely used?
Normally, if you ask someone why they are slow to accept cryptocurrencies, be it Bitcoin or anything else, they will come up with three reasons.
We have analysed the major concerns of crypto naysayers and tried to suggest the solutions.
Governments will never accept crypto as a valid money form
That is the most popular answer if you ask people why they are sceptical about altcoins. They are likely to refer to China that officially banned cryptocurrencies exchanges. If the your government can outlaw crypto at any moment, it is not wise to invest in it, is it?
All those people seem to overlook the fact that government can theoretically do anything to destroy your ‘real’ money, too. They have a lot of strategies how to do it, and lot of excuses why they have to do it. Nobody’s savings are completely safe in a bank which needs to comply with the laws of the country of operation.
And speaking of China — banning cryptocurrency exchanges does not really mean preventing people from owning or using altcoins. Actually, you don’t really need any formal companies to do it. Exchanges can be very convenient, but they are not a dire necessity. They just provide you a place where you can exchange your government-controlled fiat money for cryptocurrencies and vice versa.
As soon as you get crypto money you are free to do whatever you wish with it, and your transactions will be outside the reach of any official regulatory body. No central authority is capable of taking or freezing your crypto fortune — in fact, it is almost impossible to track it down.
Besides, when governments ban cryptocurrencies, they make them more popular. People who do not trust the authorities might think: “Well, there must be something in crypto, if they don’t want me to use it’. And they are right here.
Cryptocurrencies are not stable
A lot of speculators have been buying and selling Bitcoins in hope of getting rich, and it naturally resulted in significant price fluctuations. Some of those enthusiasts did get rich, but a mainstream user is more attracted by stability and predictability. Here cryptocurrencies face the biggest challenge due to their price volatility — though the supply is fixed, the demand is currently very unstable. Therefore, many people don’t see crypto as something they can trust, and shy away from this financial innovation. Instead, they see it as a high-risk gambling. You can indulge in visiting a casino from time to time, but you should be careful not to keep all your money on the table.
What is to be said here? First, those who claim that cryptocurrencies are a bubble that can burst any moment, tend to ignore the fact that fiat money they rely on is not as stable as it is believed to be. In many cases it is just a government-issued paper not really backed by any material commodity like gold.
Traditional money value grows less with time. It may happen for a number of reasons. For example, a government can cause inflation by printing extra money in case of need. When it happens your fiat savings will lose part of their value and you won’t be able to do anything about it. Almost all the currencies, including US dollar are now worth less than they were several years ago.
Cryptocurrencies may be the answer to this problem, as they represent a new decentralized method to exchange value. Bankless self-regulated system may sound strange, but so did e-mail to people who believed no letter could be sent without a state-issued stamp.
The best way to solve the problem of price volatility of the existing cryptocurrencies is to build a healthy and stable ecosystem around them, that encourages all the participants to cooperate for the good of the network. It does not happen in one day, but if it works we will be living in a better and safer financial environment, with more stability and less money waste. ‘Normal people’ should be inspired be this picture.
Cryptocurrencies are easy to lose and impossible to recover
Many people who would otherwise get themselves a cryptocurrency wallet, are afraid that their data can be stolen or affected by some malware. Others are just too lazy and irresponsible — saving passwords in a safe place and making regular backups are not for them.
Centralized systems like banks are always ready to recover their users’ passwords in case we forget them. We all have done it, and it is rather convenient. They also take care of our personal and financial info (and use it as they want).
In a decentralized blockchain-based system keeping personal data safe is the responsibility of the user. Say, if you write your wallet password on a piece of paper and then lose it, no one will be there to recover it. If your laptop crashes, or sinks, or burns in a fire, your fortune may be destroyed, too. If your home PC or Mac has a freeware anti-virus that has not been updated for months, your altcoins are exposed to bad guys. It requires some common sense and basic computer skills to secure your digital assets. If you are absolutely uncomfortable with it, maybe it’s too early for you to own cryptocurrencies.
But for most people it is not a rocket science. If you google for something like ‘5 tips to keep your crypto wallet safe’, you will get a lot of information on the subject. There are many free tutorials and tips from tech-savvies teaching you to block dangerous nastyware and protect data using old-school sys-admin tricks and new applications available for a small fee.
If you invest some time and money into it, your cryptocurrency is safe.
Cryptocurrencies are decentralized by definition. All their advantages and disadvantages are rooted in this feature. When you have no Big Brother to watch after you, you may feel lost and unprotected at first, but the benefits of not being controlled are big.
Currently more and more people get aware of this new approach, and it is a good thing.
United (but divided) we stand.
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