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The world has been dealing with the crypto world for many years now. It started with several interesting ideas. At the beginning almost only for fun, over time crypto has acquired much more importance and value even among ordinary people. Above all, Bitcoin made a lot of talk about itself, after which there is a lot of talk too about the Ethereum coin followed by other very interesting projects.
The general opinion
And here's my first problem: The general opinion on the crypto world is that you make easy money from it - It is enough starting with little investments to have a lot of gains in return. Many scam projects also start from this general opinion of the people where precisely with the promise of earning a lot of money, many individuals unfortunately fall victim to these scams. My take on these promises of making money easily through cryptocurrency investments? Yes, you can make a lot of money, but assuming I invest a lot of money too. If I invest little, I earn little. Oh yes, let's not forget the so-called GAS fees, that is, costs that are charged for each signature transaction that is processed on the Blockchain.
Costs per transaction in the Blockchain
So we reach the second problem I see: The transaction costs are high, very high. Those who invest little, sometimes have such high transaction costs, very close to the value you want to exchange, sell or buy for a currency. Lately I have seen services on various platforms that require a very high minimum of assets deposited in the wallet before I can trade, deposit or withdraw the cryptocurrencies I want to trade. Until several months ago it was not necessary and the minimum of assets to trade was much lower .... I missed something. Or there were simply so many small crypto transactions in the past that 'slowed down' other signatures on the blockchain too... That would be a good question to answer. :D
I remember that there was a lot and still is a lot of publicity about very low transaction costs. So low that they should compete with the services that the so-called conventional banks, bank services now considered obsolete. From my own experience, I say no. You could collect some offers of various local banks with the costs for their services and you see that in total, you pay more for the transaction fees on the Blockchains during a year than for service costs offered from banks. But wasn't it supposed to be the other way around, bank service fees more higher than transaction costs on the blockchain?
Traditional banks are certainly not sleeping!
Oh, I forgot to say: Banks did not stand still and quietly watch the general interest in the Blockchains of the people. Hey, there are their own bank customers who are interested in the crypto world! Banks are now also using these blockchain technologies to offer more attractive and diversified services. In addition, there are many other very interesting start-ups through the fin-tech world, almost completely or exclusively digital, where the costs for the services offered have almost completely disappeared. And here's another big difference between the crypto world and conventional banks, many times thrown into oblivion.
The guarantee for deposits
Conventional banks offer deposit guarantee. What is the deposit guarantee? In short, as the word itself says, the bank guarantees those who deposit money in their savings account in the event of bankruptcy, purchase by another bank or money market fund, to a guaranteed compensation up to a maximum of a total of money pre-established by the bank that are in our savings account. Usually this maximum guarantee deposit for each customer, let's say that on average this deposit guarantee amounts to $ 100,000. So each customer, in the event the bank goes bankrupt for example, is guaranteed to compensate each customer for the money deposited as savings up to a maximum of $ 100,000. If a customer has less than $ 100,000 in his savings account, this customer naturally only receives what has deposited .... Attention please, the money invested in funds or on the stock exchange, shares etc. is not covered by the deposit guarantee! There the bank tells you that it is an investment at your own risk. We are only talking about the money deposited in a savings account. Yes, it is true that interest rates have not been interesting for a couple of years from now. The interest rate on the savings account on average is around 0.01%, not exactly as much attractive. But I prefer to have a certain guarantee on what I deposit. Instead, with Blockchain-related companies they all have one thing in common.
Your money? Your risks!
'Invest at your own risk' ... 'deposits are not backed/guaranteed'. Read the terms and conditions of the contract, you will see interesting information, do not dwell only on the statistics and numbers of potential earnings before opening an account with a crypto company. Dig deeper to find the information that interests you and answers to legitimate questions that you ask yourself before open an account. With Blockchain technology and cryptocurrencies, you can quickly earn money at interest rates that are much higher than traditional banks, but even at the same speed you can lose them.
In my opinion, crypto coins are to be considered as shares, a continuous ups and downs. They are influenced by who has the biggest slice of the cake and can make whatever they want with it. I hope it makes the idea. I like cakes, I like half cakes much more less, not satisfying at all.
In conclusion, I am not against the crypto world, I focus more on the projects, the potential of these projects. But instead of being dazzled like moths by the beautiful light of a light bulb that could be considered like the potential earning promises that companies in the crypto sector do, let's put on glasses that filter these lights too bright to see the naked reality. Otherwise we risk 'getting burned' ourself or like a moth that gets too close to a lamp until it touches it, it sticks definitely...
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