The cryptocurrency space is immature. It is of course, still in its infancy so immaturity is understandable; but, the meme culture and constant flow of misinformation are both off putting factors to those who are curious about cryptocurrencies and the actual science and math behind blockchain.
The mostly young community of cryptocurrency enthusiasts even have labels that they use to refer to this misinformation: FOMO and FUD. Fear of missing out or FOMO tends to push the market higher as people rush to get in on the profits. While FUD, an acronym for Fear, Uncertainty and Doubt, tends to cause people to sell and is often used systematically to crash the price of specific coins.
Another source of frustration for the scientifically driven is the prominence of scams surrounding ICOs and blockchain startups. ICOs without a doubt offer traders a great chance to multiply their initial investment many times over. Scammers take advantage of uninformed investors with stars and dollar signs in their eyes. To be clear, a lot of failed blockchain companies will be unfairly labeled as scammers. However, there are many criminals who are setting out with no blockchain goals, but only a catchy name and the desire to separate fools from their money. Recently in Vietnam, scammers ran off with 660 million dollars as investors were left empty handed with no recourse to recover their money. The perpetrators disappeared into thin air while more than 30,000 victims wonder what happened to an investment they thought was a sure thing.
The explosion of ICOs the cryptocurrency sector has seen is leaving many new and possibly naive investors overwhelmed and unable to even determine the difference between coins or why the tokens they purchase even have purpose. On internet forums, the informative discussions between curious and new investors are drowned out by a constant stream of cryptocurrency traders sniping about shills and referring to all coins as useless scams except for the ones they have in their wallets.
Scammers also try to leach on the popular leaders of the blockchain sector. Anytime Cardano’s founder Charles Hoskinson sends a tweet, the replies are littered with fake accounts promising to send you a large amount of a certain type of cryptocurrency, if you first send some small amount. Scams like this make little sense but find enough hopeful and naive thinkers to be profitable. Ethereum’s Co-Founder and CEO Vitalik Buterin has seen this hoax go down enough times that he has been promoted to change his Twitter handle to “Vitalik ‘Not giving away ETH’ Buterin”, and other popular blockchain leaders and developers have followed suit to warn their followers of these unsavory actions.
The immaturity of the cryptocurrency space leaves investors vulnerable to being taken advantage of and scammed. Obviously, scams happen everyday in traditional financial industries, but there is more support for investors and a means of recourse to possible recover your money if you’re a victim. With cryptocurrency still being in a state of “Wild West” lawlessness there just isn’t enough protections or an infrastructure set up to combat bad actions in the cryptocurrency and blockchain world.
Writer, producer, cryptocurrency enthusiast.