The Cryptocurrency deception

News: Cryptocurrencies are neither a currency, nor an asset. They are a fraud which needs extensive scrutiny by the government agencies.

Why Cryptocurrencies are not a currency?

For any instrument to classify as a currency, it must have the following features:

– One, it is a promissory note wherein the issuer is promising the bearer or the holder a value.

– Two, it is backed by a sovereign nation and, therefore, there is never a question of any default in executing the promise.

– Three, the printing of currency in either physical or digital form is always based on some tangible asset, like gold or a basket of goods.

From the above, it’s clear that cryptocurrency can never be a currency.

Why Cryptocurrency are not an asset?

An asset is something that has a tangible value. Even if its immediate utility is intangible, an asset should have some tangible benefits.

The cryptocurrencies are nothing but gaming points.

For instance: Whenever a discussion on cryptos takes place, promoters talk of blockchain technology. This technology is just a technique to account for transactions. It has nothing to do with cryptocurrencies, except that the cryptocurrencies’ digital exchange is being maintained in blockchain format. In other words, the points which are earned through a gaming application are stored and transferred through blockchain technology.

Therefore, cryptocurrencies have absolutely no value and cannot be considered an asset.

Source: This post is based on the article “The Cryptocurrency deception” published in The Indian Express on 17^th Jan 2022.