Cryptocurrencies and FinTech for People in a Hurry

Abstract

Cryptocurrencies are at the forefront of today’s FinTech sector and have gained considerable popularity among both seasoned investors and ordinary retail enthusiasts alike. The expectation is that people will sometime soon ditch any national currency, such as the US Dollar, the Euro, or the Yuan for a more universal form of exchange, such as Bitcoin for transactions across national borders. The present paper attempts to highlight some of the caveats in such feelings towards the future of finance. It also summarizes the brief but rich history of the crypto world and discusses some of the myths surrounding cryptocurrencies and Blockchain technology, and questions their validity. While Blockchain technology’s potential in many industries, including the financial sector is promising and might be a possible game-changer–the potential danger of misinterpretation and abuse does exist, nonetheless. In the present paper, the basics of cryptocurrencies and FinTech are revisited and attempts have been made to help see them in the light of basic economic principles behind how money works. The thought experiments, literature review, and critical analysis presented in the present paper indicate that investing in cryptocurrencies needs to be considered with better value judgment, and with relatively more caution both in the sense of investment justification and also in the light of general ethics. Because investing in something that promises a high return with low to no risk (like many crypto assets do), might very well be a red flag about a Ponzi scheme or purely a gamble, which are not only potentially illegal but might also damage the general confidence in the financial system if left unchecked.