If you’ve ever tried to explain cryptocurrency to your relatives, you might have found it can be as difficult as trying to teach rocket science to a toddler.
Most folks react with skepticism, ridicule or scorn when you try to explain the utility of decentralized digital currencies that have limited supplies and aren’t controlled by any government — but there is hope!
To help thwart your parents’ scoffs and your siblings’ rants, we’ve compiled a handy list of responses you can use to take the tension out of family occasions so you can get back to other less-divisive discussions like politics and vegetarianism.
Let’s dive right in.
1. It’s not real.
Crypto is very real, it’s just not tangible.
Crypto is essentially software just like the internet, and even your most argumentative Uncle wouldn’t argue the internet isn’t real.
Additionally, cryptocurrencies can be bought, traded and used to purchase real world goods and services, not just cartoon pictures of monkeys. Plus, you can see your crypto moving on the blockchain network (we’ll get to that bit) and trace exactly where your assets first came from.
2. A blockchain is just an overcomplicated database.
A blockchain is a database, and yes it is complicated. But, it’s complicated for a very good reason.
Unlike traditional banking ledgers, which are solely maintained by banks and inaccessible to the general public, public blockchains are 100% transparent, 100% accessible to anyone in the world with an internet connection and 100% available to be viewed at any given time. Even during the festive period!
Providing this level of transparency requires a collaborative effort from a decentralized community of volunteers who help to run blockchain networks. These participants are governed by computer-coded rules written into the actual blockchain protocol itself, not by a company or government, so it isn’t simply a case of just recording inputs and outputs.
3. Bitcoin isn’t money.
According to the Encyclopedia Britannica, money is described as, “a commodity accepted by general consent as a medium of economic exchange.”
Breaking this down, it’s easy enough to prove bitcoin is generally accepted as a medium of exchange — it’s traded globally, legally recognized as legal tender in some countries and, in the United States, it’s deemed a commodity under the Commodity Exchange Act (CEA). Pow pow.
Using PayPal or crypto debit and credit cards, it’s now possible to use bitcoin to purchase everyday items with ease.
4. It’s bad for the environment.
A) Crypto mining uses a 59% sustainable electricity mix.
B) More energy-efficient blockchain mechanisms (i.e. proof-of-stake) are becoming increasingly popular.
The bitcoin energy argument is often the go-to, bread and butter back chat for many crypto critics. Especially environmentally-conscious friends and family.
However, what many fail to brush up on is the fact that a majority of crypto mining — the main culprit of the industry’s high energy demands — now takes place in the United States following China’s crypto ban in May 2021. What they also are likely to have missed is the fact that initiatives like the Bitcoin Mining Council, led by MicroStrategy CEO Michael Saylor, and U.S regulations are driving the industry to become significantly more greener.
If you need to equip yourself with more useful retorts against the crypto energy debate, check out our recent blog post.
5. Governments will just ban it.
Most governments are crypto-friendly and recognize the industry is too big to ban.
In fact, many governments recognize the benefits of cryptocurrency and are actively working with industry leaders to enact smart regulations. Some governments may appear unfriendly, but they are quickly learning how crypto can improve their international competition and national security. Time, in this case, is on crypto’s side.
6. Crypto is used by criminals.
Latest figures show less than 0.15% of all crypto transaction volume involved illicit wallet addresses.
Sure, criminals will always look to use cutting edge technology to commit crimes, but the overwhelming majority of people who use crypto are normal, law abiding citizens.
Reputable cryptocurrency companies like Kraken follow regulations and proactively work to stop criminals from using their platforms. Further, because every transaction is stored on a public ledger, it is extremely difficult to truly use crypto for nefarious purposes. While it’s not impossible, it doesn’t make much sense.
A recent Chainalysis report found crypto transactions linked to illicit wallet addresses represented less than 0.15% of all crypto transaction volume in 2021.
7. It’s too expensive.
You can buy cryptocurrencies for as little as $10.
Crypto is divisible. An easy way to think about it is like pennies, nickels, dimes and quarters that make up a dollar. On Kraken, any coin from bitcoin to dogecoin and more can be bought with as little as $10.
8. You can lose it forever.
Yes, you can. But you can also drop your wallet in the street and lose your cash forever. It’s no different.
You can absolutely lose crypto, but in today’s world of easy-to-use services that’s an exception, not the norm. There are also great free learning resources you can check out to prevent accidental crypto loss from happening, like our How to keep your crypto safe guide.
It’s also important to remind your relatives that cryptocurrency is designed to be self-sovereign and place complete control in the hands of individuals. When you custody your own crypto correctly, no one can take it away from you. And as long as you follow basic safety precautions, there’s no reason to worry about losing your cryptoassets.
9. Crypto is just one big scam
Yes there are scams in the crypto industry — just like any industry. But no, the industry itself is not one big scam.
Over the years, many critics have labeled cryptocurrencies like Bitcoin as Ponzi scams and said the industry is one big pump and dump scheme.
At Kraken, we covered how Bitcoin is not a Ponzi scam in detail in a dedicated blog post here.
With regards to the crypto market being a pump and dump scheme, it’s important to make the distinction between a highly volatile market and a pump and dump scheme. Cryptocurrencies, unlike stocks and traditional commodities, are traded 24/7/365 on globally-accessible exchanges and peer-to-peer platforms. This results in high volatility which often sends prices soaring and crashing quickly within short periods of time. Hedging, diversification, correct trade allocation and a range of other trading techniques can help insulate an investor from these wild movements, and sometimes even benefit from them. The market isn’t fixed against you.
It’s also essential to note that crypto, like any other industry where money exchanges hands frequently, is susceptible to fraud. Just like scammers target parcel courier and banking customers, malicious actors also target unsuspecting crypto users. Exercising rigorous due diligence is essential regardless of what industry you’re involved with.
10. It’s illegal
Cryptocurrency is only illegal in 9 countries out of 195.
This is an easy one. Despite sensationalist mainstream media headlines, cryptocurrency is completely legal to buy, hold and sell in over 95% of all countries in the world — including most major jurisdictions like the United States, Canada, Japan, Singapore, Australia and Europe.
Need more myth-busting ammunition? Check out our series on crypto myths here on the Kraken blog.
Get started with Kraken
With Kraken, you do not need to purchase a whole bitcoin in order to participate in the cryptocurrency ecosystem. Sign up today and get started investing in bitcoin with just $10.
These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell, or hold any digital asset or to engage in any specific trading strategy. Some crypto products and markets are unregulated, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of the cryptoasset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in the value of your crypto assets and you should seek independent advice on your taxation position.