I was planning to buy crypto eventually, but I decided I will invest in stocks instead. My faith in the whole crypto movement has been damaged. People told me it is seperate from banks and decentralised and all, but what are these crypto platforms freezing crypto assets? Most people I know at least are using some form of company that stores/exchanges their assets. And if one of these companies tumbles, what will happen to your money? It isn't protected like traditional currencies, right? I also looked at the articles about stable coins being the future over the last years and how many experts backed that with all kinds of arguments. Now look what happened to them this year.
I think what you're saying here gets at the fundamental problem - Unless you're invested in the intricacies of the tech and the underlying fundamentals of the market, crypto still sucks. None of the stuff happening at the exchanges affects me, because I hold the keys to my own wallets. But is that a realistic solution for most people? The various stablecoin crashes/problems were very foreseeable - if you followed the space. Is that something most people want to do?
In a crypto Facebook group that I'm in, there are people who will inevitably respond with "not your keys, not your crypto" anytime anyone asks about exchanges. When I'm feeling up for an argument, I will point out that the fact that people need to say this is one of the biggest problems with crypto that will prevent mass adoption. Keeping your crypto on an exchange is the equivalent of keeping your money in a bank. Keeping your crypto in a private wallet is the equivalent of keeping your money buried in a box in the backyard. Exchanges need to be secure, insured, and safe before crytpo will see mass adoption. I get that decentralized finance is part of the goal of crypto, but we need a safe place to buy, sell, and exchange crypto easily.
You see the nightmare scenario stories in the news of people who lost the keys to their wallets and can't access their money. What normal person is interested in this?
I think people are down enough on banks that they'd be interested in some kind of individualized solution. But it has to function better than a bank to be adopted. Think of the things you can do with a bank:
- Charge back scam purchases
- Move money between your accounts without transaction fees
- View your transaction history in a human-readable way
- If you lose your bank account information, you can go to the bank, verify it's you, and get new information
- If there's a bank run or the economy takes a dump, at least some of your cash is insured
- Depending on the account, earn no-risk interest (even if said interest is low)
- Send money to people without transaction fees
Where is the crypto technology that can do these things? Why is no one trying to build it? This is not a frivolous question. Jay Powell is currently robbing the American people of their wealth in order to lower inflation. An alternative must be invented.