Question marks, text: THE TWO BIGGEST PROBLEMS IN CRYPTO

What I see as the biggest problems in crypto and why

By Patch | Things of note and other interesting stuff | 12 Jul 2022

I have been thinking about this for some time now and finally reached some form of consensus with myself. And I thought it would be a good opportunity to try and put the idea to paper and then do a litmus test here with the community. To see how accurate or far off I am.

The first problems

There are two things I see as problems. And I am looking forward to hearing what you all think about it. The first one is trust. I think we as a community are way too trusting. And in part, I would say it is not because of ourselves. But it is a false sense of trust we have been lulled into. Let me try and explain what I mean.

As probably most people in crypto are aware there are scammers basically lurking behind every corner, under every rook. If you want to survive in crypto you have to be very vigilant and think twice or thrice about everything before doing it. Something I myself learned the hard way. But if this is true how can I then go and say the problem is we as a community are too trusting?

Well, the trusting part comes into effect a little bit later. The way blockchains are set up allows for total insight. You can track every transaction and every swap that gets made. With the obvious exceptions of mixers, and CEXes of course. But I think it is this total insight that has lulled us into a false sense of security.

And this is what the bad companies such as Celsius and their ilks are taking advantage of. Our false sense of security the Blockchain is offering us. But in fact, they are operating under the pretense of openness. Just like a magician uses misdirection to fool the audience they do the same. They get us to put our crypto into a magic box and then we sit and stare at this box.

As we are promised a feat that in many cases only would be surpassed by real magic. We do not notice the hand reaching into the box and taking out our crypto, to go do the "magic" they say is done in the box somewhere else completely. While maintaining that is it their magic box that is doing what they say.

Companies like Celsius use every trick in the book to try and get your crypto

While they promise to do magic with virtually no risk for you. In fact, what they are doing is taking the crypto out of the box and much of the time running down and betting it all on black. And as long as they keep winning everything is fine. But as soon as they lose once it all falls apart. But then we get to see the real magic.

And that is how they then show the fine print they had you signed. And there it states that by you putting the crypto in the box would assume all liability for everything and just have to sit there and take it.

And if you want an example of this magic. You need to look no further than Celsius. There in the fingerprint, putting the crypto in the box transformed from a deposit into a loan. Where instead of making a deposit actually loaned the money to them, and guess what, the terms were really bad for you as well.

The second problem

This is the fact that there is too much money floating around in crypto. If you listen to project makers when they give talks in some places. They basically look at it like, create crypto, sell it and then you have a market cap of 30M. And the way they talk about it is as if this money is just nothing to them. It is what they expect. Like they are entitled to it almost.

Way too many crypto projects get way too much funding without actually having done anything. You have NFT games that get the same amount of funding that a AAA game has. And all they have is a trailer made of 3d objects they bought and slapped together over a weekend.

If this is due to trust or the bubble-like "nothing can fail" mentality that sets in or both I can't really say. But it is a problem. And it is a problem in two ways. The first is a lot of people get burned by herd investing. Everyone is putting money into this so it must be good.

But the biggest problem is because of all this seemingly "free" money floating around. It attracts a lot of bad actors. You can think of them as clever scammers in a way of you will. And this is hurting crypto in a lot of ways. Other than just actually scamming and taking people's crypto.

I hope that this ranty post made somewhat sense and was at least somewhat comprehensible to you. =)

Please share your thoughts on these issues, and if you agree or disagree please feel free to share why in the comment section down below.

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