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Sunday, June 16, 2024

What is the difference between cryptocurrencies and financial pyramids? After all, cryptocurrency exists only if it is mined?

Generally speaking, the fact that people (miners, and not only them) work on the production of cryptocurrencies, as well as certain resources are spent on this, suggests that cryptocurrencies have their own cost. Which, in turn, already gives them value, and does not allow them to be called pyramids, since pyramids, a priori, do not produce anything valuable, but only collect money from newly arriving depositors. However, the value of cryptocurrencies is not only in mining. Most cryptocurrency projects, at least from the top 100, are based on innovative technological developments in the digital and IT sphere. Which already bring great benefits and economic effect.

Let me give a simple example: the developers of the Theta cryptocurrency have created a technology that increases the speed of processing streaming video tenfold. As a result, they already have contracts with such giants as YouTube (Google), Samsung, Sony, etc. And this situation is with most companies engaged in development in the digital sphere and having their own cryptocurrencies. New cryptocurrency projects, relatively speaking, are usually startups, again with innovative ideas.

So as you can see, the cryptosphere, in fact, is also an incubator of innovative technologies. And since the main engine of the world economy, as you know, is technological progress, this, of course, also adds value to cryptocurrencies, and, most likely, is their main asset and driver of the development of the crypto industry as a whole.

Therefore, the identification of cryptocurrencies with pyramids is an amateurish approach, and usually, people say so, who have not even tried to understand the essence of the crypto industry and the technologies that are being developed there and are already working.

Of course, there are many skeptics who will answer me: “so what? anyway, the prices of cryptocurrencies are too unstable and speculative, and it is better not to mess with them at all.” But let’s look at history – it’s always been human nature to speculate on things that have value and popularity. And there’s no getting away from it. Most likely, when the crypto industry is fully formed, prices will “settle”. By the way, for conservative investors in the crypto market there are tools with a low level of risks, for example, such as – grid auto-trading of cryptocurrencies, as well as staking.


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