Do You Think Crypto Is A Glorified Gamble?

What do you consider gambling? In my opinion gambling is risking your money for high returns. It’s always buying something and hoping to sell it at a higher price, so you are almost practically betting that the value will go down. Lots of people have classified bitcoin or rather the whole cryptocurrency a Ponzi scheme, and in a way, if you are viewing it from a non crypto fanatic point of view, almost everything is a Ponzi scheme. What separates a Ponzi scheme investment and a legitimate investment is the utility and usecase.

Initially when bitcoin was created, to an average person bitcoin would have sounded like a Ponzi scheme. Imagine being told that there is a program that is like money but it’s not feasible, it can not be seen or touched. But it’s secured, unshakable and transfer time is really fast. The first few set of people that heard about it will consider it scam, because to them that is not enough utility, but it takes a great visionary to see the value of bitcoin at the earliest stage and decides it’s a great technology and it is worth investing.

Hal Finney is the first person to receive a bitcoin transaction from Satoshi Nakamuto, and he was a cryptographer and a computer scientist, the moment he heard about bitcoin and knew its utilities he knew this was one of the greatest things that has happened to the world.

Back to crypto and thinking if it’s glorified gambling or not? In my opinion almost all investment is a gamble, because there is no investment that doesn’t come with a risk. The risk might be extremely low but as long as there is a risk attached to it, it’s still gambling. For instance, if we want to use feasible products as an example, let’s say you are a merchant that sells cars, you are taking a risk. Your car shop can be set on fire, your car shop can be burgled, it’s possible that you might encounter the wrong dealer and buy stolen cars, the authority finds you and confiscate the cars. You can also have those cars packed in your car shop and no one will buy it if not marketed. It’s possible that while importing the cars, the ship can capsize and your cars will sink. So what am I saying here? Any investment is a glorified gamble, anything can happen, so is crypto.

There are a lot of utilities attached to crypto, this makes it hard to believe that crypto can go to zero one day, but the same force that is pushing the crypto market from $3 Trillion dollars to $900 Billion, can also push it down to zero, if liquidity gets sucked out of the market, that’s the end. Look at what happened to Terra Luna, it had great utilities but the mechanism got flawed and almost $30 Billion liquidity was gone. Can it happen to the entire crypto space, yeah, anything is possible.

Posted Using LeoFinance ^Beta