Cryptocurrencies : A Tool of Investment or a Currency Gone Berserk

    Jan 1, 1970 12:00 AM 3 min read

    BTC, ETH, LTC, XRP, DOGE...etcetera...etcetera. Cryptocurrencies haven't been shy about staying in the spotlight for last 3 years, from surprise millionaires to people who sold everything they owned to invest each and every penny they held in some of these cryptocurrencies.
    But, were cryptocurrencies meant to be a mode of investment? or just another Ponzi scam or a bubble, that would burst one day? People have called it a plethora of things, and the funniest part is, very rare few perceived it right, because to know cryptos, you've to know their inception, their purpose, and their very backbone of existence.

    Cryptocurrencies have a very intriguing beginning, something we can also term, dark.
    To understand their inception, we turn back time to just less than a decade back (we're talking about the years post 2009, when the first cryptocurrency BTC was floated by Satoshi Nakamoto pseudonym), when 'The darknet' or 'The deep web', a form of encrypted internet, was thriving with numerous 'illegal e-commerce markets', such as the Silk Road which were nothing but Amazon for all things illegal. Furthermore, this hidden economy which normally operated in cash, moved to a new form of currency, one which was unregulated, and one which held no identification traces, thus, in a nutshell, this new form of unregulated banking, picked up traction and for the first time ever, a huge chunk of the hidden global economy of the drug and illicit goods trade began it's transition from a cash economy to one that was digitized.
    Cryptocurrencies had a purpose, decentralized transactions, and no, it was never intended to be a tool of investment.

    Bitcoin, conceived in 2009, thus, became the first digital currency which was unregulated, decentralized, anonymous, and held a unified value across the globe on any instant, just about perfect for the purpose it began to serve.
    Of course, who are we kidding, cryptocurrencies, have been, at their heart, currencies, mode of payments for goods and services.
    The move to cryptos was natural, an unregulated banking system straight out of the 19th century combined with the decentralization and anonymity owing to the digitization of 21st century.
    It's hilarious when we look at the situation today, masses have accepted these cryptos , but not as the way it was meant to be, not as a currency, but as an investment.
    The comical thing here is, the masses that turned it into a tool of investment, have largely ruined the very purpose it served, the ability to serve as a currency, because let's face it, would you ever think of investing in USD, GBP or EUR? Yes, we'd trade, but well, if history bears any witness, currencies, their storage as investment only brings about despair(If you don't believe me, ask those who kept their stash of savings in cash prior to the demonetization drive in India in 2016), cryptos are no different, their technology is priceless, offers much faster times of transactions compared to the draconian mode of transactions banks used for real time gross settlements and the current remittance networks, and as a matter of fact have been adopted by banks (Look up XRP or Ripple), but use them as a mode of investment and you're playing with a wildfire.

    I call it wildfire, for a very specific reason, the inability of most investors to be aware of the factors that can affect the value and market capital of these cryptocurrencies. I'll put down an example, in mid-March 2015 a popular darknet market, one of the largest two back in the day, went down as the administrators disappeared with $12 million worth of BTC in escrow with the portal at the time of the exit scam, which also resulted in a massive dip in the value of BTC, a factor no layman investor could have realized without losing their value in the investment. Over time, people who employed cryptos for their transactions learnt to stay away from a single crypto system, and employed numerous other cryptos for the same purposes that were once served by Bitcoin, hence the bubble burst, the soaring values of BTC never saw the same highs again and instead newer and more advanced currencies which offered greater privacy, took hold, for the economy these currencies represented, have learnt to not stay stagnant on a single currency.

    Let's just say, for now the world has a lot of grey areas, cryptocurrencies just happens to be one of them, and I daresay, putting your life's worth in a grey area isn't the best idea ever.