Why some people think cryptocurrency is fake money

Let’s explore the main reasons why some people think cryptocurrency is fake money.

• It’s not backed by anything: Some people think that the U.S. dollar is real money because it’s backed by gold. It’s not — it’s just “backed” by the “full faith and credit of the U.S.” — whatever that means. Crypto doesn’t have anything backing it up.
  Some people think that only things that are backed by something are real money. If something isn’t real money, they think it’s fake money.
• It’s not physical: Some people see money as something that has to be physical. If something is digital, it’s not real money. If a person can’t hold it in their hands, it’s not money.
  Some people believe that the only thing that’s “real” is what they can see and feel. If something is digital, they think it’s not real.
• It’s not regulated: Some people think that only government-issued currency is real money. If the government doesn’t regulate a currency, it’s not real.
  Some people want the government to protect them from their own poor decisions. If the government isn’t regulating a currency, some people think it’s not real money.

What is cryptocurrency?

You might be surprised to learn that cryptocurrency isn’t exactly a new concept. The idea of digital currency has been around since the 1990s. The first cryptocurrency, called Bitcoin, was created in 2008.

There are several advantages to cryptocurrency over physical cash. First, cryptocurrency is much easier to transfer across the world than paper money. No one has to be in the same place at the same time to exchange cash.

The second advantage is that cryptocurrencies are easily divided into smaller units. A $100 bill can be inconvenient in certain situations. If you want to buy a $10 drink, it’ll be hard to break a $100 bill — especially if you don’t have a lot of cash on you. Cryptocurrency is much easier to break down into smaller amounts.

Blockchain, the technology behind cryptocurrency

Cryptocurrency is based on blockchain technology which some people think isn’t real technology. A blockchain is a digital ledger that records cryptocurrency transactions. It’s basically a massive spreadsheet that anyone can view and add to.

Some people think that blockchain isn’t real technology because it’s a digital process. After all, if it’s just ones and zeroes on digital devices, it’s not real technology. Some people think that only physical things are real technology — like houses, bridges, and cars. Digital things aren’t real technology — so blockchain must not be real technology either.

Real money is backed by something

• Some people think that only physical cash is real money. If a currency is backed by nothing, they think it’s fake money.
• Some people think that only physical cash is real money because it’s backed by the government’s promise to exchange it for goods and services.
• Some people think that only things that are backed by something are real money. If something isn’t real money, they think it’s fake money. But what backs cryptocurrency? Some of the most popular coins are backed by computing power, electricity, and storage space.
• Some of the most common coins are backed by computing power — like the coins that run on the Ethereum network. Some of the most popular coins are backed by electricity — like the coins that run on the Bitcoin network. Some of the most popular coins are backed by storage space — like the coins that run on the Siacoin network.
• Some people think that these currencies are fake money because they have nothing backing them up.

Cryptocurrency can be exchanged for real currency

• Some people think that only physical cash is real money. If a currency can only be exchanged for other cryptocurrencies, they think it’s fake money.
• Some people think that only things that can be exchanged for physical cash are real money. If a currency can only be exchanged for other digital currencies, they think it’s fake money.
• Some people believe that only things that can be exchanged for physical cash are real money. If a currency can only be exchanged for other cryptocurrencies, they think it’s fake money.
• Some people believe that only things that can be exchanged for physical cash are real money. If a currency can only be exchanged for other digital currencies, they think it’s fake money.

Crypto is decentralized and transparent

• Some people think that only government-issued currency is real money. If the government isn’t regulating a currency, it’s not real money.
• Some people want the government to protect them from their own poor decisions. If the government isn’t regulating a currency, some people think it’s not real money.
• Digital currencies like Bitcoin aren’t regulated by any government — so some people think they’re not real money.
• Some people think that only currencies that are regulated by the government are real money. If the government isn’t regulating a currency, they think it’s not real money.

At first glance, it might seem like cryptocurrency is fake money. After all, it’s not physical, it’s not backed by anything, and it’s not regulated. But when you look closer, you’ll realize that cryptocurrency isn’t fake money. The technology behind cryptocurrency — blockchain — is real technology. Cryptocurrency isn’t fake money.