Cryptocurrency vs the Current Financial System Which is more evil?

Hello internet friends!

So I’ve had a lot of questions and concerns from friends and family about cryptocurrency with so many scary and dire predictions and proclamations in the MSM.

If you’ve heard the news lately you may think it would be crazy to ever get into cryptcurrency because the news says it’s a dangerous bubble, pyramid scheme, illegal, used to finance criminal activity, used to finance terrorism, is completely anonymous and 200% evil.

While there are definitely some truths to the MSM articles like most issues in life I feel it is with an agenda and not an accurate reflection of the true picture, reality and future of cryptocurrency.

To give you an idea of my perspective to be honest when my wife first told me about Bitcoin I said “there is PayPal”, “it will never be anything”, and there will be “lots of fraud and scams”.  I was right about the third one at least (1/3) :)

The Main Points The Media Makes About Cryptocurrency and How They Fair Against Fiat Currency

  1. Cryptocurrency facilitates illegal transactions, terrorism, money laundering by being anonymous and without regulation.
  2. Cryptocurrency is a bubble and pyramid scheme that won’t last.
  3. Investing in it is too speculative and risky.
  4. There are lots of scams.
  5. Coins are worth nothing because they were created from nothing.
  6. Cryptocurrency can and will be banned.

The reality as I see it in comparison to fiat

  1. While I am sure it is true crypto has been used for illegal purposes the same can be said of fiat cash ever since the beginning of time.  Cash can be used anonymously and is used that way each day.  I think this is a moot point since almost anything in the world with legitimate and good purpose can and will be used for illegal activities.
  2. I do believe crypto will have a serious crash in line with the 1929 Wall Street stock crash or the 2008 financial crisis but that didn’t stop stocks and I believe the same of crypto.
  3. This is a broad term, there are literally thousands of coins which serve completely different purposes.  There is no doubt some have stronger fundamentals and will last while others are truly worthless for various reasons.  There is also massive speculation in our traditional financial system, whether the US housing crisis that put people under water, penny stocks and failed stocks, bonds and mutual funds.
  4. This is absolutely true, there have been a lot of scams in the crypto world, however there are scams with fiat such as fake money, debit/credit card skimming etc.
  5. This is true, just as it was of fiat money but this depends on the time period.  It’s arguable that back when the gold standard existed that fiat had a certain value and was backed by gold, but today the world is freely printing money out of thin air or “nothing”.
  6. I do believe it will be banned in some countries, primarily what we’ve seen is exchanges getting shut down in China and Korea but it hasn’t stopped cryptocurrency from sky rocketing.

The Universal Truth

While the media does make some valid points, they are really blown out of perspective.  Cryptocurrency does have issues, as does fiat but what I suspect this really is about is the fact that our modern banking and financial system is at risk.  Since most cryptocurrencies are decentralized, no one person, organization typically has any control over them.  You cannot freeze an individual, organization or country’s assets anymore.  In times of war, duress or even genocide such as Myanmar it would be possible for the underbanked to use a cryptocurrency such as XLM (Stellar Lumens from the creator of XRP/Ripple) to safe guard your money across borders and against unjust seizure.  With cash or wire there would likely be no time to do such a thing if your city is being razed by the Burmese army.

There is significant risk in the future for cryptocurrency’s which really haven’t seen a seriously long, sustained correction.   Yes there have been flash crashes and drops of 25% in a day but they usually all come back higher than ever.  This is a bull market without question.  On that note I’d like to point out that the financial side of the crypto world functions almost entirely like the current financial system.

Take for example the dominant US dollar, it is still one of the most commonly used settlement currencies in the world which is a way it has artificially held value regardless of how the US economy has performed.

In the crypto world I feel Bitcoin/BTC is on top because it is the main currency used on trading exchanges.  In fact on most exchanges you have to convert your other coins into BTC usually to buy into other coins.  You can place traditional Limit and Stop Market orders as well.  In this sense the crypto world has volatility because it’s a fast changing world with new coins, players and buyers/sellers are coming in and out of the market.  You can see people taking profits when some coins surge, just as you would with traditional stocks.  If the currency or project behind the currency hasn’t changed in a negative way there’s usually no reason to worry or panic.  Instead seasoned investors will wait for the pullback to buy more of their favorite coins.

The Final Word

I think the death of cryptocurrency is highly anticipated and overstated.  I do agree the weak coins and ICOs will die, but the coins with strong fundamentals will not be going away.  Cryptocurrency is here to stay and there’s no way it can be stopped, it can be regulated and this will somewhat shape the future but we’re now in a period where more regular people will not only invest and trade in cryptocurrency but it will be used as commonly as everyday debit and credit, something that obviously banks and government will take issue with.  The answer is truly that you can’t fight the market or will of the people, there are solutions and ways for there to be a win-win but the bankers won’t let their market without a fight.

Issues with Buying from China

I’ve been buying things from China for years both in person and online and can tell you there are both very honest people, companies and also just as many if not more who are not honest. Herein lays what I believe is one of China’s biggest issue to sustainable cross-border e-Commerce in my opinion and experience.

One of the biggest issues still exists today on say Aliexpress, you want to buy a pair of pants for your kids or wife, or a carpet. They show you fantastic looking pictures and my wife asks if I think it’s a good idea. My answer is always “If the picture they show is really what you get and the other specs and sizes are correct then yes”. I’ve gone for an advid consumer to a skeptical one who tends to buy more locally or from more trusted sources and known brands for certain items.

The first time I remember encountering this was buying a nice Hello Kitty for my daughter. What we received had a completely different design and outfit. The seller as per normal from China “apologized and promised a discount next time”. This is what scares me about their business model. I replied and said they have to give us a discount now or there won’t be a next time. They broke my trust by sending the wrong item and then expected future business without making this issue right. This has happened enough times from eBay and Aliexpress that I rarely buy anything because the hassle of disputing and trying to get your money back is just not worth it especially since so many items are not as pictured or even the correct size or of horrible quality. You end saying for the time and hassle there are no savings there’s no point in ordering anything.

For example if I’m looking for a certain make and model and electronic and the seller is known to sell authentic goods then I have no issue buying it because I know I’ll get exactly what I expect and paid for with no hassle (usually……… more on this later). So this is how I’ve proceeded, generally with good luck knowing that there are fakes of almost every electronic, obviously some things are more or less likely to be faked.

The impetus for this article started when I first embarked on a journey to buy a popular Chinese phone the One Plus 5 with 8GB/128GB in September. I tried to buy it from GeekBuying ( a highly recommended site on internet forums ) only to be told that they won’t honor the price and randomly want more money. The amount they asked for actually became more than purchasing from other sellers at the time.

Here is what happened at GeekBuying and they refused to honor the price and then proceeded to offer a discount code that actually made items cost more.

Thank you for shopping at Geekbuying.
We are so sorry that the Oneplus 5 A5000 cost has increased. Really apologize about this embarrassment situation and we hope that you agree to make up the difference $25 and we can continue the shipment as soon as possible.
Please note that the extra difference is already with 20% discount which Geekbuying takes the partial responsibility.
Would you like us to send you the email link to pay 25$?
Looking forward to your early reply.
Inconvenience regretted.

Cecilia
Customer Service Representative
Geekbuying
www.geekbuying.com

Asking around on Reddit and searching showed this is a common practice at least with phones with Geekbuying. I had to open a PayPal dispute because they would not provide a refund when I asked for it.

GeekBuying.com Price Increase Scam from chinaphones

 

So what next – I tried GearBest.com

GearBest is also a highly recommended place to buy mentioned all over the internet so I paid $539.99 from there.  It has now been 34 days and I haven’t received the phone.  Attempts at getting answers from them just refer me to “check the tracking and wait” essentially even though their 22-25 business days period has now expired.  Some have accused GearBest of giving out fake tracking numbers and hoping people don’t follow up on their orders.  I think this may be possible, I was given a tracking number from Singapore Post, it shows an item arrived in Canada about 3 weeks ago but Canada Post has no record of it at all.  It’s really not normal for Singapore Post to take this long.  As a final resort I’ve opened a dispute with Paypal to which there has been no response for.  Fearing this is truly a scam I’ve shown everything to PayPal and am awaiting their decision and I truly hope their buying protection works.

I never imagined this would happen to me or that I’d receive nothing at all with a potentially fake tracking number.

Customer service from most of the sellers of I’ve had issues with in China has been either unresponsive, unhelpful or even rude.

So what now?

This experience has kind of been the tipping point of my opinion of dealing in ecommerce with Chinese sellers.  The level of trust, honesty and service is woefully lacking and I believe is a huge threat to China’s business going forward.  If these sellers want a long-term sustainable business they simply have to change their ways as buyers like me are completely turned off and moved away from buying items from China for fear of being scammed and the hassle and frustration that goes along with it.

A lot of the manufacturers do not seem to be interested in knowing that their so-called resellers or distributors are not being honest or fair.  In fact when complaining about issues from both to OnePlus and Vorke, neither company replied or commented at all.

This kind of practice is simply unsustainable and if people like me will no longer buy from China others will follow.  It’s only a matter of time before fake reviews, blog posts and forums will catch up with unscrupulous companies and it unfortunately taints the entire industry and hurts everyone.

I’ve learned my lesson I will definitely not buy from other websites unless someone I personally know can assure me their experience has been good.  I will continue to stick to eBay and Aliexpress but will continue to be careful and try to buy as little as possible.  Whenever possible I now favor a more local seller who I trust over an overseas seller.

China’s eCommerce is still maturing and to put it in perspective there was a time when eBay was full of scams too.  It takes time to get it right but hopefully this happens sooner than later.  As always in general, buyer beware of internet reviews and recommendations and this will continue to change the online marketing landscape and trust factor.