The Biggest Misconception About Cryptocurrency at My College
Anyone who knows me around my school knows I’m all about cryptocurrency. Apparently, talking about digital money essentially non stop for the past semester will leave that impression on others. Whether it be discussing investment prospects with similarly-interested peers, getting stopped by random students passing by with questions on the subject matter, or even a professor telling me in jest he’s surprised I still come to class after “making it big” on Bitcoin, it’s no question how much bandwidth I expend on my cryptocurrency ventures within the university setting.
Through it all, however, I’ve noticed a glaring misconception about cryptocurrency that I believe is worthwhile to address, since I have not seen much written about it elsewhere. The following fallacy has been bouncing around campus ever since Bitcoin’s gargantuan ascent:
Cryptocurrency is synonymous with Bitcoin.
A brief, but implicative notion, its simplicity is patently false and deserves further investigation to ultimately be debunked. And while this new age of fintech and subsequently the new markets developing certainly have their intricacies, this just isn’t one of them. Let’s explore how this sentiment is most frequently expressed in conversation, which will sound quite familiar to anyone who has even remotely discussed the topic in the past few months.
Person 1: “Are you interested in cryptocurrency?”
Person 2: “Nah, Bitcoin is a bubble and will crash.”
Heard that before? It’s nothing too overbearing, but it’s the most typical conversation I hear around campus regarding cryptocurrency, which only reinforces the false perception that Bitcoin is in fact synonymous with cryptocurrency. Let’s explore the sentiment’s inaccuracies and lack of comprehensiveness with regard to the cryptocurrency industry at large:
- Bitcoin is just 1 of nearly 1,500 recognized, regularly traded cryptocurrencies. Stop talking about Bitcoin as if it’s the only one.
- If you think all cryptocurrencies are the same as Bitcoin, you’re mistaken. Many of them actually have no intention of being a currency at all, and admittedly, such a label is somewhat of a misnomer. The cryptocurrency sector is essentially comprised of:
- 1) True currencies (i.e. Bitcoin, Dash, Monero, Litecoin, etc.)
- 2) Blockchain platforms/supporting networks (i.e. Ethereum, EOS, NEO, Cardano, etc.)
- 3) Decentralized applications that utilize cryptographic tokens (i.e. Brave/BAT, 0x/ZRX, Golem/GNT, etc.)
I’m assuming that sounds like gibberish to most students reading this, so for those interested in commenting on the topic, there are tons of educational videos and articles online, as well as students on campus who can offer insight. But please, stop equating every cryptocurrency’s purpose and status with Bitcoin’s. It’s silly.
- Bitcoin’s market cap dominance is plummeting, yet the industry is booming. While there has certainly been significant historical correlation between Bitcoin’s price action and the rest of the market’s standing, the industry-leader’s market cap dominance has dropped from nearly 100% a few years back to just 34% now. 2018 is sure to further this trend as more altcoins gain popularity and recognition, and render Bitcoin a mere chapter of a larger book still being written. But how can this be if Bitcoin = cryptocurrency? Hint: it’s not. 2018 will be the year that utility tokens and more blockchain advancements catalyze the industry’s path to a $1 trillion valuation and further legitimization. Next month, for example, millennial-loved, fintech startup Robinhood will even start allowing users to buy and sell cryptocurrency. This trend will only continue.
- Bitcoin was the first blockchain protocol to be used to in the form of digital currency and has a number of shortcomings, potentially even severe enough to prevent it from achieving widescale adoption. But many other cryptocurrencies are learning from its flaws and improving upon them in newer, revised models. Speed of transactions, scalability, transaction fees, and supply issues are central to the future of cryptocurrency implementation, and no one in their right mind is pretending like Bitcoin nailed it any of those accounts. Is Bitcoin overvalued? Maybe. But consider Bitcoin to currency similar to what Myspace was to the inception of social networks. Ultimately Facebook comes along. No one realized we would get so much value from Facebook for quite a while. Who’s to say the same isn’t true for a decentralized, peer-to-peer digital currency in society?
- Bitcoin has a lot of hype around it. Factor that out, and look at the innovation it’s spurring. Genetic engineering, self-driving cars, Smartphones, and the importance of social media all didn’t exist 10–15 years ago. Few refute the immense value in the decentralized operating systems that blockchain technology is introducing the world to. But those in stark denial of a potential financial transformation within society, claiming that fiat currency is the only way for economies to function, need to take a step back and see just how drastically society is racing ahead. Bitcoin itself, if at all, will very likely not be the sole component of global finance in the future. But to assert with full conviction that cryptocurrency at large is nothing because “Bitcoin is a bubble and will crash” is asinine and misguided.
- Finally, even if Bitcoin is a bubble and does crash, that does not inherently delegitimize the industry. Did the Wall Street Crash of 1929, Black Monday, and most recently the crash of 2008-2009 strip the stock market of its foundational value and importance? Valued at over half a trillion dollars now, the cryptocurrency sector is legitimate even if its valuation takes a large hit. Would MarketWatch, and so many other financial news outlets really list it otherwise?
Is this sentiment unique to just a single college in Manhattan? No. We live in a day and age where buzzwords are the currency of conversation, permeating news coverage and common social interaction alike, irrationally receiving utmost respect and validation along the way. It’s powerful to see how restrictive of a language it can be. In the context of cryptocurrency, throwing around words like “Bitcoin,” “bubble,” and if you’re really advanced, “blockchain” have become increasingly popular to stay up with the times and sound tech-savvy. “Bitcoin is a bubble and will crash” is a mere reflection and byproduct of the buzzword-centric era we live in.
While it is technically fine to speak in such terms, it encourages people to develop and propagate polarized opinions as opposed to educated and intellectual ones, which ultimately leads to the proliferation of misconceptions. For the record, people who unabashedly support Bitcoin and refuse to accept any of its shortcomings are equally as guilty of this phenomenon. Where is the agnosticism?
Admittedly, many students don’t actually believe or even really understand what they’re saying. Such individuals likely just regurgitate what their friends or finance professor said. This only furthers the issue at hand.
The ensuing effect caused by this restrictive cryptocurrency vernacular around campus is an underwhelming one. While many students like to make bold and rash statements about cryptocurrency’s apparently imminent demise in factual terms, they simply come off as ignorant on the subject matter, yet more importantly, fail to make campus a destination for legitimate and stimulating discussion about the new technologies and concepts currently trending in the finance and technology sectors. Do cryptocurrencies pose challenges or possess undesirable characteristics which some of us may not like and therefore not want to get involved with? No doubt about it. Can we talk about those actual issues instead of promoting a misconception?
As cryptocurrency is poised for another action-packed, breakthrough, and disruptive 2018, I am curious to see if the students around me start to realize that Bitcoin makes up a mere fraction of the industry. I graduate in May. Let’s see how it plays out.