Ethereum is the cryptocurrency of 2021. It rivals bitcoin in performance, and the entry point is much lower (less than $2,000). With ether futures about to go live, on top of ethereum 2.0 updates, it's poised to blast off like a SpaceX rocket this coming week.
Plus, the average person can still afford it.
On the other hand, there could be a big dump after the February 8 launch that drives prices way back down for the foreseeable future.
To bet, or not to bet?
That’s the question I ponder on my couch, browsing reddit on my phone. It’s the same question a lot of people are wrestling with now, especially millennials like me who’ve largely missed out on the stock market. A couple of my husband’s friends are working me pretty hard.
“Do it! Go crypto!”
My entire life, I’ve never had money to invest anywhere. I've worked hard for years, and I finally have some cash to put somewhere for a longterm investment.
Should I, though? And should you?
Should we invest even a little bit, just to see what happens?
My answer is no.
Here's why:
Cryptocurrency pretends to be decentralized.
Fanboys of cryptocurrency insist it’s wonderful because it’s anonymous and egalitarian. In truth, inequality comes baked right in.
The average person doesn’t have the technology or internet speeds to manage the crypto market’s 317 gigabyte ledger. Just like other currencies, the ledger of transactions would wind up in the hands of a few elite groups who also happen to moderate and dominate the exchanges.
To me, that sounds a lot like… Wall Street.
Cryptocurrency pretends to be safe.
Fanboys of cryptocurrencies insist that they can’t be hacked or stolen, but they most certainly can.
Fraud and theft happen on the crypto market all the time. In 2019, there was $4 billion lost in crypto theft.
Tracking down thieves and recovering losses is hard. You can’t exactly report it to the FBI. While they do investigate crypto crimes, it’s only under certain circumstances. Most of the time, you have to hire a private firm and get a lawyer all by yourself.
If you can’t do that, you’re screwed.
Cryptocurrency pretends to be fair.
Fanboys of cryptocurrency insist that it’s the only way for the average person to get a leg up on the super rich.
Let’s be honest, the average person barely has the time or resources to even remotely understand how cryptocurrencies work. This puts us at a huge disadvantage against tech savvy coders and hackers, plus their billionaire heroes, leaving us all at their absolute mercy.
So we come back to the equality problem.
Cryptocurrency pretends to be valuable.
Fanboys of cryptocurrency insist that bitcoin and ethereum will only rise in value over the coming years. They say anyone who doesn’t invest right now risks missing out on a fortune.
They say things like, “Enjoy staying poor.”
In reality, bitcoin is just like any other currency. Its value lies purely in perception and predictions. It’s not a car or a house. It’s not any kind of physical object that can actually be used for a practical purpose. If the only way someone can encourage you to invest in something is psychological manipulation, that’s a bad sign.
Cryptocurrency pretends to be stable.
Fanboys of cryptocurrency insist that what you’re investing in will remain resistant to inflation and other market forces. They refer to it as a kind of “digital gold,” which can protect us against recessions.
In reality, it’s a highly volatile asset.
We’re already seeing classic pump and dump schemes taking shape where groups of wealthy elites and influencers band together to plug a crypto, then sell it off for a profit.
There’s no agreement on how long this volatility will go on. We’ve seen bubbles in the past. We’ll see more. For now and the foreseeable future, bitcoin and ethereum’s value depends completely on how many people are buying it, and what they’re willing to pay.
It’s not an alternative to the stock market. Instead, it’s becoming its own version of one.
Cryptocurrency pretends to work as a currency.
Fanboys of cryptocurrency insist that it’s going to become the dominant way people trade goods and services. They point to major companies getting behind the movement, offering a means of transaction.
This is a lie.
These companies and payment services don’t actually enable trade in bitcoin. What they offer is the ability to convert bitcoin to another currency, like U.S. dollars. Few people buy and sell solely in crypto.
Crypto isn’t a currency.
In the current form, it’s merely an intermediary between existing currencies, and that makes it even less valuable from day to day. For most of us, it’s like having laundromat tokens.
Cryptocurrency pretends to be honest.
Fanboys of cryptocurrency insist it’s better than any other currency because there’s a finite amount of it in the world. They act like this is a good thing, since that makes manipulating it almost impossible.
This ideology doesn’t hold up.
To function, currencies have to be widely available and accessible. They have to be in circulation. We’ve already seen what happens when the rich hoard huge amounts of wealth. We’re seeing it now.
It creates scarcity, which drives value.
For most of us, scarcity is bad. When you own a little bit of something that’s extremely valuable, you still have no power. You’re still at the mercy of those who hold most of the wealth. It doesn’t matter if that wealth is measured in gold, US dollars, or code.
Cryptocurrency pretends to be a solution.
Poverty existed well before the current financial system came into being. It can exist in a digital one, too. In fact, the finite nature of bitcoin could just mean that millions of us get stuck in poverty forever. So when you really think about it, most of us shouldn’t want the world to run on a currency you can never, ever make more of.
What cryptocurrency really offers is the certainty that people who have lots of bitcoin and its cousins never see their wealth deflate.
It does nothing for anyone else.
So when someone invests in crypto and hypes it, they could just be ushering in a new age of digital serfdom.
Cryptocurrency pretends to be the future.
Fanboys of cryptocurrency insist it’s going to carry us into a new age and free us from old, rigged systems. They claim it’s going to replace the dominant order and bring about true change.
But look what’s happening.
Billionaires are already hoarding bitcoin and ethereum. Influencers are doing their best to lure in new investors with a combination of golden promises and scare tactics. When someone voices any hint of criticism, they’re met with angry denials and attacks.
They’re attacked.
I’ve met enough bitcoin enthusiasts to know one thing: These are not the people I want as stewards of a new financial era.
There’s no good reason to invest in cryptocurrency.
The average person shouldn’t invest in anything like bitcoin or ethereum for a few simple reasons. First, it’s not ready to become a true currency. Second, most of us don’t have the expendable money to invest, and we don’t have the time or resources to protect ourselves.
Most of us simply want and need a place to live, and food to eat.
Some people are banking on crypto to make them a fortune, and they’re eager to draw in new investors to help drive up the price. That’s not a good reason to be in the crypto market.
The source of our current problems isn’t the nature of our currency. It’s the nature of our greed, and our capacity for deception.
Bitcoin can’t save us from that.
You’re better off investing in skills.
If you’ve got a little money, you’re better off investing it in skills. You can buy books and learning materials. You can take courses. You could take time off between jobs to explore new careers. A few thousand dollars is money you have to pay your bills while you figure out what’s next. So if that’s all you’ve got, my advice is hang on to it for now.
Instead of buying a bunch of bitcoin, I’m going to finish paying off my house, because that gives my family a place to live no matter what happens over the next couple of years. That’s priceless.
In the end, money buys you a little bit of freedom, and that’s the most valuable thing in the world.
Don’t gamble with it.
Invest in yourself, and become an asset.
Everything is moving faster now. The roaring 20s was a decade, but this roar could last a couple of years. If you’ve got money, then what you really have is time. Use that time to invest in yourself.
If you’re not rich, your best bet in this world is to be the kind of person who can demand higher pay for your work.
Don’t invest in assets.
Be the asset.
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