I recently had an enlightening conversation with a friend that I thought I should share. Keep in mind that this friend is having a lot of problems with finances, especially with the pandemic playing havoc with their income. There is background to some of the assumptions we both have going into this convo, that do not need to be detailed here, but suffice it to say that there are perspectives I am taking based on this person's situation that may not make as much sense for all people. In the interest of privacy, I am going to scrub a lot of this friend's statements and just paraphrase a gist.
The post was a response to another friend's advice to be keen on the market and choose shrewd opportunities to buy and sell BTC (based on a posted article about recent activity on BTC exchanges)
Me: My advice-- and I come from a revolutionary stance, not a financial one-- is to avoid BTC like the plague. I can go into the technical reasons as well (in a PM) if you want, but it's a waste of time if you're not already a whale, in which case you'll be fine no matter what you do.
Cryptos are about emerging tech and solutions. The tech moves so fast that even groundbreaking ethereum is becoming outdated for some applications. Find the good ones and participate. Generally, they have reasonable entry for pennies (or free from faucets or bounty programs) and you can grow your portfolio with the tech. You succeed along with the good ideas and it's no real loss on the ones that fizzle. Participating in crypto is about using the crypto and contributing, not "buy low, sell high". That's how you exploit a currency and make fiat money, which is bad faith participation since clearly you value the fiat most of all.
A good starting point I recommend to people with no extra piles of cash lying around is something like Coinbase's Earn program where you watch videos that teach you about the tech behind an emerging crypto and they reward you for your time with a little bit of that crypto for free. If you really like what that one is doing, you can decide to put more of your own stake into it. If you don't, you can cash it out or swap it into one you like better. It's low risk crypto education.
Friend: Coinbase sucks. It takes like thousands of coins to get $1 value. I can make far more income per click with other options. I did COINBASE for a while, until I actually did the math.
There are better options for making money online.
Me: Well, that's kind of my point. It's not about making free money, it's about learning avenues and participating in tech for no cost and even a tiny bit of a perk.
Crypto has been given a weird reputation by all the crypto bros "buying lambos". It's not about that. It's never been about that.
Friend: Fiat runs on being able to make more and cryptos can't do that. You can't run a deficit on the blockchain. I think of crypto as speculative investment, functioning like DOW or S&P. Crypto will only have real world value if adopted by a major corporation or government. I could burn a paper bill to keep warm, but crypto is just an abstraction for market play.
Me: No, viewing crypto as analogous to DOW and S&P tells me you've been getting your info from not very helpful sources. The idea of distributed systems is a complete revamp of the very systems that are causing your financial duress. Improving the infrastructure so that participants are treated equally and fairly based on participation.
Many crypto bros are trying to turn cryptos into fancy reskins of the system we already have in place-- which is why you see the pointlessness of it. If we do what those dudes are doing, it is pointless.
There's a lot to unpack about what each system is trying to fix and how they interact with each other and the modified version of prosperity in a distributed economy. If you feel that a crypto is out of reach or unusable because of your fiat finances, then you know a lot about whether or not you should bother with that crypto (e.g.: you will just be translating your current situation to an analogous situation with trendier money).
This is why I tell people to support the change in infrastructure, not just the laundering of money.
Trust me, I have no specific love for Coinbase, but I do appreciate that they have an interesting education model for learning about crypto. I recommend checking out stuff on Earn with no motive of financial gain. See if you enjoy the little sessions a little more when you're not thinking, "Only $2?! What am I going to do with that?" The idea, of course, should be that converting it to its value in USD should be the last thing on your mind. If all you want to to do with a crypto when you get some of it, is immediately get rid of it, then you haven't found the right one yet.
I do understand the short term concerns-- especially right now in these ridiculous times-- but crypto is a long term solution when applied correctly: No corrupt banks. No insane wealth imbalances. Etc etc But yes, this doesn't pay your rent *this* month. So, absolutely don't participate in any crypto system in a way that could jeopardize your financial health in the meantime.
For all my crypto-enthusiast brethren out there, I think this conversation is very illuminating about how misunderstood cryptocurrency systems are. Also, keep in mind that I had to hold back on diving into technical info to explain rudimentary concepts, endorsing specific cryptos, or giving any real financial advice because I really wanted to convey that crypto is a paradigm shift, not just a lottery ticket.
(No crypto bros were harmed during the typing of this convo.)