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Why most people are WRONG about Cryptocurrency

Discussion in 'Investing/Trading/Cryptocurrency/Altcoins' started by DrWumbo, Aug 8, 2018.

  1. DrWumbo
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    DrWumbo New Contributor

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    Reading through many of the threads on The Fastlane related to Cryptocurrency, it still is very apparent that people aren't very familiar with the basics of what a "Cryptocurrency" is, even if they are strongly for it/against it. I'm hoping to clear up some of the misconceptions I have read on here and supply everyone with a better understanding.

    Over the past year and a half I have gotten into the Cryptocurrency industry. There are so many projects trying to accomplish real world problems with solutions incorporating DLT/blockchain. If fully utilized, it can lead to more secure, cheaper, and accessible services and bring us a more "controlled by the people, for the people" Web 3.0.

    Here are some misconceptions that have been spread far and wide, starting with the biggest one.

    1. "CRYPTOCURRENCIES" are NOT solely a replacement for our current currency system.
    Reading throughout the Fastlane, both many supporters and opposers believe that the sole purpose of Cryptocurrencies are here to replace our current system. This tricks many people, as the name itself suggest that! This can be farther from the truth though.

    Bitcoin was the first Crypto to hit the market. The purpose of BTC is to act as a digitalized, decentralized currency replacement to any system around the world. As more projects incorporating blockchain technology started to come out, people needed a name to stamp on the industry. As Bitcoin was the most popular, valuable, and the underlying technology, Blockchain, was first utilized for a digital currency, the name Cryptocurrency was given to the industry.

    According to Coinmarketcap, there are roughly 1800 Cryptos on the market today. The majority of these Cryptos are NOT currency replacements. Go through the list and read up on the projects. You have BTC, LTC, Monero, Dash etc that are acting as a digital currency. But then go read up on projects such as NEO, Ontology, Cardano, Elastos, Zilliqa and others. You will quickly see that the majority of projects are incorporating DLT/blockchain technology into real world solutions to solve real world problems.


    2. Cryptocurrencies are a scam, bubble, etc and have no real value

    The mainstream media has hammered this topic over and over again, convincing people that Cryptos are some weird internet invention that is extremely speculative and used to just make money. If you read up on some of the projects I have listed above, you can see that this isn't the case.The Cryptocurrency space IS a bubble and there is no doubting that. The majority of Cryptos will die in the next few years when the market hits an insane, multi trillion dollar market cap and goes "POP!". So you might think to yourself, "Why invest at all then?"

    If you go and take a look at the big tech companies back in 2000/2001 during the Tech Bubble, you can see the INSANE valuations that they hit. Amazon hit $85 a share before plummeting back down to $6. If you had a true understanding of the market and these companies, you could see that they were insanely valued and had to over correct at some point in the future. By understanding this, you could ride out the trend and make great profits. In early, out early.

    But what happened in the Tech bubble is that the companies who offered the world with true value, like Amazon, Apple, Google etc stayed around, even though their market cap went down by over 70%. Now, they are the worlds most valuable companies. This will happen with cryptos as well. The prices will go astronomically high. The bubble will pop and they will crash into the Earth. The REAL Cryptocurrencies, like NEO (one of my favorites), will stay alive and further cement themselves as huge players in the space. They will survive just like Amazon did, by providing real value to the world. This again will create another buying opportunity and allow the market to correct itself and go back up to new heights that have never been seen before. Tell me, how amazing would it be if you could go back and buy Amazon at $6 a share, while it currently resides close to $1900? If you understand the technology, the market, and companies, you can ride this wave and possibly set yourself up in a position to recreate this event.


    3. Distributed Ledger Technology (DLT)/Blockchain doesn't offer any more value than current systems

    The people that say this don't have a shred of understanding what DLT/Blockchain really is. To crudely sum it up, this technology allows us to cheaply and securely, transfer information like we haven't seen before. It utilizes a network that has set rules and parameters, visible to everyone, to handle this information, instead of a mass corporation handling it. DLT/Blockchain eliminates expensive, insecure, and untrustworthy middlemen.

    We have banks today that charge incredibly high fees, gamble our money, open MILLIONS of accounts in order to meet quotas etc. The reason this happens is that these banks are setup to act in a shady and/or unlawful manner. What I mean by that is the internal culture and rules makes it okay to break the law. Need to hit that account quota or your fired? Then open up new accounts without peoples permission. Pressured by big investors to make a bigger profit? Start investing other peoples money into riskier assets. These networks are designed to only promote HEALTHY behavior for everyone. Because it has set rules and is a network, you can't do what the network won't allow you to do. This enables a HUGE way of how things can be done, because even if a bad actor acts in the most selfish way possible, because of how the network is structured, it can be overall beneficial to everyone.


    4. The Cool Down.

    Now, stay with me. I'm going to bring us off of the amazing Cryptocurrency high that I have spewed to you guys. This technology is NEW. It is PROMISING. It has very LITTLE real world adoption (yet). There are many people out there that will jump down your throats if you don't think everything in the world needs to have a blockchain, which it doesn't. This is a speculative market, with speculative projects that promise great things. What I have said above scratches the surface of what I, or better yet, more knowledgeable people than me can tell you.

    Blockchain is the technology behind these Cryptocurrency projects. In my opinion, Blockchain has SERIOUS real world use cases. There is a reason why Google, AMEX, JP Mogran, FaceBook and others are researching it. Blockchain has the capability to bring us into the next era of the Web and the companies pushing towards this era will more than likely HAVE to incorporate it as the capabilities are amazing. Most cryptos are vaporware and the ones that will thrive will be the projects that are using blockchain as a foundation to much bigger problems.

    Please, DYOR and ask as many questions as possible. If it is wanted, I can make another thread on my personal investing experience and advice. Below are some great informational pieces. Hope I helped!

    Siam Kidd - My favorite person for anything related to finance, business and explains crypto's brilliantly

    Web 3.0

    Web 3.0 Article 2
     
  2. Merging Left
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    Merging Left Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    Why does every company need a coin?

    It seems to me that the blockchain technology can function perfectly fine without an associated coin. What can the coin do, specifically, that a dollar cannot?

    My skepticism in this space stems from what appears to me as companies doing massive fundraising without actually providing anything to "investors," while skirting what would normally be a regulated environment for raising funds from non-accredited investors. By buying a cryptocurrency, you don't own equity, voting rights, or... anything. I just don't really understand the purpose behind the coins themselves.
     
  3. DrWumbo
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    We can take the project NEO as an example.

    NEO has two tokens. One called "NEO" and the other called "GAS". By holding NEO, you have a stake in the network and have the right to vote on proposed changes to the network. By further holding NEO, it distributes another token called GAS. GAS allows you to run smart contracts on the platform.

    Different Cryptos that aren't a currency offer different ways to run their network, voting rights etc. When the NEO network fully launches and you are able to have things like a house on their network, there could be different options to pay. You could pay with a Crypto or even a countries currency (this will be further talked about in the future). There are even Crypto's that are "pegged" to a countries currency. Here is an example https://neonewstoday.com/general/alchemint-releases-whitepaper-announces-sdusd-tokens/

    In all, different coins do different things depending on the project. They DO have purpose behind them, like what I mentioned above
     
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