Those of us who have been around for a few years got inspiration about why crypto exists from soaking ourselves into the ecosystem, whatever our original reason for getting into it. I am sure that I am not alone in thinking that we saw it as a good way to get a good income or even get rich. We bought the story of how BitCoin went from nothing to a high-value asset and we all know the story about the guy who spent 10,000 BitCoin on pizza and maybe even the story of the hapless Stefan Thomas, a German programmer who lost access to 7,002 BitCoin because he forgot the password to his hard drive. The drive holds his private keys, and after 10 failed guesses, it encrypts itself permanently. He has used 9 attempts.
The point is that these guys had the potential to get rich and so could we.
However we soon learnt that unlike PayPal, crypto is actually new money and the dream was to unbank ourselves by simply being able to carry out peer-to-peer transactions without cost and an intermediary (namely the banks).
It sounded ideal and it should have worked, but then we realised it was a lie. An intermediary is still required much of the time i.e. an exchange, for which fees (gas) are required and is even more of a con when you realise that - as I wrote a few days ago - that Coinbase for example don't even utilise most of their "trading liquidity" from their cold wallets, rather it is from what they receive during day to day trading. This is fine, but then we pay not only for the spread, but for the gas too even though it has gone nowhere near the blockchain.
It is a bit like me going to a foreign exchange and changing 10 USD to 7.50 GBP and then the person behind me buying 10 USD for 7.50 USD the money is simply recirculated. I am of course ignoring the spread for simplification Now there is nothing wrong with this and to drive my point home even the banks have on the whole stopped charging exchange commissions.
Sadly this is not the case with crypto. I remember relatively early on in my experience I had a large amount of BAT on my Celsius account and it suddenly spiked overnight by something like 60% if my memories serves me correctly. So I moved it from Celsius to Coinbase to capitalise on the certain correction that was going to follow. Sure enough it did and I would have made a huge profit (in terms of percentage), but then just before I activated the transaction I saw the gas fees and it would not only have wiped out my profit but also half of the BAT I was holding.
In the UK retail banking is free unless you opt in for a paid account that gives beneficial overdraft / exchange / interest rates. The fact is the banks, as much as we hate them are doing a better job.
So many of us are in danger of getting caught out by gas and this is the primary reason why the dream has died. So I guess we are just left with speculating, day trading and hodling and for most of us pursuing the original reason why we got into crypto in the first place.
As always stay safe and well my friends.
