Money is virtual, fraud is real: Your Mind will be changed

Reading news about cryptocurrencies – 1660 Mining Settings – thinking it is nothing, our people are not so stupid that they get caught up in this whirlwind. Without warning, a class vice-president in Son La was assigned to collect more than 300 million dong of your tuition in class, but did not pay it to the school, but used it to invest in virtual money . It is not clear what kind of currency she plays on the Binance exchange, only losing all her money, now facing a prison sentence for property appropriation.

The first is that there is no shortage of authoritative, reputable people who assert that cryptocurrencies have no value. European Central Bank President Christine Lagarde recently said in an interview: “I have said many times that cryptocurrencies are extremely speculative, very risky assets. I mean it’s worthless. It’s not based on anything, there’s no underlying assets to act as a safe anchor.”

Money has three functions: medium of exchange, unit of account, and store of value. Cryptocurrencies are almost impossible to use as a medium of exchange, stories about using Bitcoin to drink coffee are just a show because each transaction is both time consuming, expensive in electricity and quite expensive.

It must not be a unit of account because prices fluctuate wildly, only the function of storing value is left, so now almost everyone, including supporters, consider cryptocurrencies to be an asset. property, not real money.

Any property must have some intrinsic value, a tissue is also used to wipe the mouth or a goose feather is also used as a prop in the movie Forrest Gump , but cryptocurrencies carry no value. whatever it is, it’s only worth it, that’s what people say, let go of this belief and it’s trash – that’s what Mrs. Largarde and many others mean.

In contrast, proponents of cryptocurrencies only disparage anyone who doubts, but offer no convincing arguments. The guy Do Kwon, the founder of the TerraUSD coin and Luna, has lost 99% of its value (see Youth Weekend issue 19-2022), once mocked an economist when she made arguments that the currency Kwon’s price anchor is worthless with a sentence: “I do not argue with the poor”.

Another, a former founder of a blockchain company called Paxos, thinks Kwon’s pricing mechanism is absurd; Kwon replied, “What the hell is Paxos?” This guy often promotes his coin with PR tricks like naming his newborn daughter Luna: “My most beloved creation is named after my greatest invention”. Just full of big, cliché words like that, but still attract many people, maybe including the deputy classmate in Son La!

Well, let’s say it’s a debate between the two sides, how to know who is right and who is wrong. Thinking like this, the purpose of many people when playing virtual money is to wait for it to rise in price, sell it, and earn a profit. So why does it keep increasing in price, on what basis to increase its value?

After all, the biggest contradiction lies within cryptocurrencies: its value lies in the trust of the community, losing trust will cause the currency to collapse. This is nothing more than a postmodern theory: there is no real value, only a narrative of value created by people and together believe it or not – because a cryptocurrency is essentially lines of code. code on the computer.

However, the underlying technology that operates cryptocurrencies, which is blockchain, eliminates trust, relying only on distributed ledger technology for the majority to record transactions. These two opposing values ​​will eventually lead to disaster like the recent price crash of the TerraUSD and Luna currency pair.

Despite being in the industry, software engineer Molly White was previously quite indifferent to blockchain and cryptocurrencies (crypto). She believes that this is still a niche technology and perhaps most people who are interested in investing are well aware of its risks, especially its uncertainty and unpredictable value, the rest if not. nothing to do with cryptocurrencies, just don’t throw money in.

By the end of 2021, White noticed a big change in the way people talk about cryptocurrencies. “From being mainly used as a type of speculation by people willing to take risks in exchange for profits…, everyone wants a crypto wallet and everyone wants to participate. blockchain-based projects,” White told the Harvard Business Review (HBR).

The software expert officially couldn’t sit idly by when “cryptocurrency started to be promoted as something everyone had to be part of, and when projects started trying to appeal to a broader audience that is often who don’t seem to understand technology and financial risks.”

White is seen as a crypto skeptic. In addition to her personal page mollywhite.net, she also created a page “Web3 is Going Just Great” and recorded in chronological order incidents and problems related to Web3 technology, blockchain and cryptocurrencies such as fraud, technical problems, floor collapse, “smelly” deals.

“I’ve seen a huge number of Web3 and crypto projects go awry: people come up with bad ideas and individuals and businesses lose tons of money to scams, hacks and bugs. users” – White explains the reason for creating a “warning story” website for those who have a hard time resisting flashy hype about the crypto world.

In the same interview, which HBR published titled “Warning Lessons from Crypto Land,” White explains why she’s skeptical of the familiar pretense that blockchain will decentralize the web and provides new sources of wealth and opportunities even for the “unbanked” (who have not yet accessed banking services). “It’s hard for me to see a future where a technology that isn’t well regulated and presents the wrong financial incentives could lead to a more equitable and accessible system,” she said.

 

Regarding how blockchain and crypto will help the “unbanks” access banking, White thinks that people are falling into the familiar trap of the tech world: trying to solve social problems with technology.

“People are inherently unable to access banking services not because of technical factors, but for a variety of reasons: no money to open an account, no paperwork, not being able to move to the bank. or access online because there is no network, or they may not trust the bank because the financial and judicial systems where they live have high levels of corruption.These are problems that cannot be solved unilaterally. by bringing everything on the blockchain”.

In contrast, crypto solutions will create more financial barriers instead of tearing them down. Specifically, users must have a certain level of security to protect crypto wallets; must have knowledge and time to learn and research projects to know what is a valid project and which is a scam.

In addition, when there is a problem with crypto exchanges, the current regulatory framework does not have any provisions to protect users and help them troubleshoot if they are scammed.

In short, White does not believe that cryptocurrency and blockchain-based technologies are the solution to such problems as creating a fair and accessible financial system, a more equitable distribution of wealth in society, ensuring privacy and control over personal data…

“These are social problems, not technological problems, and the solutions will come from social and political change,” she concluded.