So I took a dive into crypto this year just to see what it’s like. It’s a hot topic, I know, but I do get asked “Should I invest in BitCoin”, and I thought I’d test it for myself before proclaiming the disadvantages of BitCoin and why cryptocurrency is bad.
Yes, everyone is doing it (even I’m doing it) but I still don’t get it. When it comes to the pros and cons of BitCoin, I can’t figure out how it’s good at anything.
Now don’t get me wrong, do I wish I bought it 5 years ago and was a billionaire right now? Yes. But I can’t figure out any reasons other than sheer momentum that it makes sense as an investment.
If Cryptocurrency is bad, why did I buy it?
Mostly just to try it. Some online stores offer hefty discounts if you buy in crypto. To the tune of 25% off. I’m pretty sure they’re doing some illegal stuff with that money, but that’s not really my problem. My hands are clean.
I’m also secretly a big proponent of blockchain – not as an investment but as an idea – but that’s totally different from cryptocurrency. (Blockchain = non-centralized way to securely track data like ownership, cryptocurrency = money based on blockchain.)
In any case, after just one bitcoin transaction, I’m very much a crypto bear.
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Besides, all of the hype behind BitCoin and cryptocurrency doesn’t hold up once you take a closer look.
Fact #1. Bitcoin can’t take over automated payments because it’s too damn slow.
When it comes to the disadvantages of BitCoin, this one drives me nuts the most. Bitcoin blocks take forever to compute. Literally, a transaction takes 10 minutes to an hour to compute and verify! And it’s not getting better, it’s getting worse because BitCoin was set up to have increasingly difficult mine operations.
You’re not using BitCoin to buy a slice of pizza if it takes an hour to check that you actually paid! My transaction wasn’t going to be vetted for 6 hours! When you’re weighing the pros and cons of BitCoin, this is definitely a point for why cryptocurrency is bad.
Okay, so there are other types of crypto coins that are faster to compute – but then why bother? Insanity!
Fact #2. Transaction fees are brutal and random.
So you already know I hate transaction fees and fees in general. But you know what’s even worse? When they’re random.
My purchase had a $5 transaction fee, and the fees are on-demand with surge pricing meaning they spiked as high as $60 per transaction this year! That’s nuts. I actually ended up buying a special type of coin called a BitCoin Cash Coin to avoid the super-high fees, but it’s not exchangeable with BitCoin which just caused a whole mess.
Even worse, you have to tack on that transaction fee – which is a random number – to your purchase amount, otherwise, your payment gets rejected. And if you round up to be on the safe side, they just keep it. I don’t like having to do extra math when I’m buying something. No, it’s not complicated, but it is annoying. And yes, I managed to screw up and had to redo my transaction.
I even tried to use BitCoin for international money transfers (mainly CAD to USD), but it still sucks. My contractors wouldn’t take it.
I prefer Transferwise. It’s faster and the fees are smaller.
Fact #3. The government likes controlling the money.
I understand the rosy view of taking back control of the money supply from “the man.” But the man has a lot of power and they can ban it. In fact, I don’t see why it wouldn’t get banned if it actually gets big. Blammo, market destroyed. The US government has banned similar things before (like gold in the 30s,) so why wouldn’t they do it again?
Fact #4. It’s not finite.
Some people treat BitCoin as an investment like gold, since it has a limited supply (like gold) making it inherently valuable. People also argue that it’s like gold as an inflation hedge.
But I don’t buy it.
There’s no special incentive to stick to BitCoin as an investment over any other crypto. There’s DogeCoin, Etherium, BitCoin Cash, LiteCoin, etc. etc. etc. These are all equally viable as places for your crypto money. BitCoin has momentum, but it’s not unique.
Look at my checkout. I had 14 crypto choices and the company said if I wanted to use another, that’s fine too. Does that look like a finite pool to you? Not at all.
Making an infinite number of coins causes crypto inflation – and the cookie crumbles.
So if BitCoin and Cryptocurrency is bad, what is it good for?
Fun gambling investing.
Seriously, the biggest use of crypto is that it’s fun to gamble on. People enjoy it. Elon Musk tweets about it. There are cool names and valuations, and it makes you feel hip to tell your friends you own some.
If you’ve bought some BitCoin as an investment, I hope it does well for you. But as far as being useful, I’m drawing a blank. Maybe tax evasion or avoiding getting tracked for big purchases?
But if you’re a law-abiding, normal person I still don’t get it. So I’m out. Crypto’s dumb.
TL;DR – Why cryptocurrency is bad
- A main disadvantage of BitCoin and crypto is It’s not really useful. The transactions are too slow, and the fees are not realistic.
- Another con of BitCoin is the government does have the power to take over.
- Cryptocurrency is also not a finite resource despite some claims.
- If you’re wondering “should I invest in BitCoin” just understand you’re relying on momentum and hype
