June 8th, 2018

5 popular opinions about Blockchain & Crypto

5 popular opinions about Blockchain & Crypto

June 8th, 2018

Popularity is not always pleasant and unanimous. Regarding the hottest tendencies in particular, sometimes it happens that there are many rumours spread around, including both positive and negative attitudes. In the world of technologies, Blockchain and cryptocurrencies are definitely the case at the moment. Despite the still-growing interest of people, some stereotypes remain alive. Of course, it does not indicate that they are not based on real events. Also, some mismatch with the truth can exist. The analysis of the most popular opinions on crypto concepts should help in evaluating this industry in a more professional manner.

1.Cryptocurrencies and Blockchain are destined to collapse

Both yes and no. As seen from the past events and future predictions, the value of Bitcoin (which is considered to be the main unit of cryptocurrencies, defining their value) fluctuates a lot, as seen from the figure below, covering the last year.

(Bitcoin price index in 06/2017-06/2018, source: Coindesk)

Naturally, the experts of finance and banking assume that this quickly changing pattern demonstrates the vulnerability of digital currencies. As a result, the collapse of this system may be bound to occur. Consequently, a large number of crypto investors and projects will experience serious financial issues along with the economy overall which could decline.

However, certain crises are inevitable in any sector, including the developing cryptocurrency and Blockchain area. This should not discourage from further investments as they would definitely improve Blockchain as the technology which would be able to assist not only in finance, but also in a number of other areas, including healthcare, arts or even policy making. All in all, the collapse of cryptocurrencies may happen, but it will not stop the further development of digital money and technology which will advance due to the comeback of genuinely passionate and competent crypto-minded individuals.

2.The lack of regulation = freedom which can have negative impact

Not really. First of all, the concern about regulations is a bit outdated – exactly the mentioned aspect of freedom in business development encouraged many breaches of law which are currently prevented with the help of serious legal measures implemented by governments globally. Starting from the most suspensive examples as China which suspended all cryptocurrency related activities in recent years and finishing with Lithuania, one of the most positive governments for crypto enthusiasts due to gradually liberalized policies, taking advantage of loopholes in the legal framework of cryptocurrencies was tackled intensively.

(Antanas Guoga, one of the most influential Lithuanian Blockchain figures, on the liberalization of crypto policies, source: Twitter, https://twitter.com/TonyGuoga/status/985788309883572224)

As a consequence, probably all well-developed ICO projects have to include a solid amount of explanation on legal measures in their whitepapers. Surely, there are still some scams damaging the reputation of crypto businesses, but it would not be wrong to claim that it happens more and more rarely. And the implemented regulations from governmental institutions are one of the essential contributors regarding this development.

3.Blockchain and cryptocurrencies is basically the same thing

Definitely not. As mentioned previously, Blockchain technology can applied for many different industries and sectors. Generally, Blockchain is a digital ledger which consists from records (or ‘blocks’). Each ‘block’ contains the information of previous ‘block’, and the information of them cannot be changed. This platform is decentralized and open for everyone what suggests that the further building of it is based on consensus. Overall, the structure of this technology is considered to be especially safe as well as there are many opinions that the appliance of it will reach nearly all sectors in the future, similarly with other emerging technologies as AI, for example.

However, at the moment, the appliance of Blockchain is the most notable in financial affairs which also caused a serious rivalry for the traditional system of banks. Therefore, this might lead to a widely spreading stereotype that cryptocurrencies and Blockchain is absolutely the same. Although the fact is that cryptocurrencies are only a small part of potential hidden under the development of Blockchain, without underrating their influence on the world of finance nowadays.

4.Only people from finance and technologies should be interested in Blockchain and cryptocurrencies

Not at all. Regarding the mentioned industries in recent years, the increase in popularity of Blockchain and cryptocurrencies is quite phenomenal. The chance to invest in ICO projects and gain digital earnings became especially attractive due to relatively easy conditions: basically, all what a person needed was being 18 years old and having the Internet access. Naturally, it received a lot of attention.

On the other hand, it would not be incorrect to claim that the representatives of finance and technologies can be seen as people who have the best knowledge of Blockchain and cryptocurrencies in general. Their experience and competence in these fields allow to advise excellently as well as predict the further trends precisely.

However, we should not forget that some of them may be biased, especially the ones from the competing industry of traditional banking. For example, the CEO of J.P Morgan, one of the largest investment banking units worldwide, did not hesitate to express a negative opinion on cryptocurrencies which led to a slight decrease of them.

5.The whole idea of ICO is based on scamming people

Way too general, but consisting some fact-based background. Unfortunately, many ICOs were deceiving people, and some of it are still existing nowadays despite the efforts of both governmental institutions and crypto community. Nevertheless, the existence of scams should not discourage from investing – several golden rules can really help in knowing if ICO is legitimate.

In short, a good and genuine ICO begins with a good whitepaper. Even though it may seem a bit complicated in the beginning, the contact with its team can both help in understanding details and realizing if it is worth investing. Any vague answer or hesitation to explain should signalize a potential danger. What is more, the background of team members is also important – checking social media and search engines takes some time, but it is always better to be safe than sorry. Recommendations and experience in well-known projects are always a bonus. Finally, the opinion of people aware of the nature of ICO can help as well. It is easy and useful to network with them on social media or events.