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5 most common crypto criticisms and how to shoot them down

5 most common crypto criticisms and how to shoot them down
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By CNBCTV18.com Jul 21, 2022 6:04:34 PM IST (Updated)

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Mainstream crypto adoption has seen a rapid increase over the last few years. However, a large chunk of society is still against these virtual digital assets. If you trade or invest in crypto, chances are, you would have come across such individuals who outright oppose the use of cryptocurrencies and NFTs. Most of the time, they have the same criticisms against this burgeoning asset class, calling it a Ponzi scheme or a playground for criminals and so on. We've put together some rebuttals to these common arguments so you can silence haters with logic and reason.

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Cryptos are a Ponzi scheme: This is perhaps the most common argument against cryptocurrencies. Naysayers believe that the value of tokens only rallies when there is someone else to buy more of them at a higher price. However, the same could be said about many penny stocks and other high-risk investments. Moreover, the price of major cryptocurrencies such as Bitcoin, which is often called a Ponzi scheme, has fallen many times in the last decade. However, it has never gone to zero, which is usually the end result of a Ponzi scheme. Instead, the price of these coins usually rallies up to hit new highs after a dip, something that never happens with a Ponzi scheme. (Image: Shutterstock)

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Crypto has no intrinsic value: People believe that cryptocurrencies aren't backed by anything, unlike fiat currencies. However, few people realise that since the dollar was taken off the gold standard, fiat currencies have no intrinsic value either. They are only as valuable as their central banks say they are and the country's economic performance. On the other hand, cryptocurrencies derive value from their underlying blockchain technology and its used cases. For instance, the Helium Network is a blockchain-powered network for Internet of Things (IoT) devices. It can be used for air-quality monitoring, car-park availability alerting and more. In this case, the project’s use cases determine the value of its native cryptocurrency. (Image: Shutterstock)

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You can't buy anything with crypto: Maybe this was true a few years ago, but things are changing fast. Today, you can buy everything from a plane ticket to a pair of designer shoes with your cryptocurrency. The number of brands hopping onto the crypto bandwagon is increasing rapidly. From high-end fashion houses like Gucci and Balenciaga to luxury watch manufacturers like Tag Heuer and even fast-food joints like Chipotle, there is a massive influx of brands getting with crypto. (Image: Shutterstock)

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Crypto is a playground for criminals: It's true, there has been a spat of hacks and instances wherein criminals have been found using crypto to fund their illicit activities. However, blockchain technology is designed to be extremely safe and ward-off criminals. Most hacks and attacks are caused by a lack of awareness amongst users, who often fall prey to phishing schemes and social engineering attacks. As for illegal usage, data from Chainanalysis' 2022 Crypto Crime Report showed that only 0.15 percent of all crypto transactions went to illicit addresses. The report also stated that legitimate crypto transactions have already outpaced illegal transactions and will continue to do so in 2022. (Image: Shutterstock)

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Blockchain technology has no uses cases beyond crypto: Many also assume that blockchain technology is restricted to cryptocurrencies. However, this couldn't be further from the truth. Today, blockchain is augmenting processes across industries. Blockchain technology can add transparency, immutability, and security to centralised entities. It has found use cases in supply chain management, property records, and voting. Today, even banks, the cornerstone of traditional finance, have turned to blockchain tech to create their own CBDCs. THIS IS A PARTNERED POST. (Image: Shutterstock)

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