For Voss, below are the good things about cryptocurrency:
(a) Technical achievements
The creation of digital currency, the blockchain that acts like a virtual ledger, the mining process, the rules that govern crypto, the trading procedure, etc. Plus, the Distributed Autonomous Organizations (DAOs) that function as virtual wallets and the computer program called smart contracts for the cryptocurrency Ethereum.
For Vos, they’re “all quite cool and impressive, technically.”
Specifically, Voss underscored “two major technical accomplishments” of cryptocurrency.
First, it solved a system problem that arises when “nodes can cooperate without trusting each other.” Cryptocurrency didn’t include trust as a factor to make a profit. What it promotes is cooperation. As long as people cooperate, they’ll earn money.
Second, it prevents abuse from occurring. For one, it makes network resources expensive, which deters people from over using them.
(b) Financial engineering
Having a system of networks that can create digital currency is one impressive feat.
Crypto is all about “speculation,” according to Voss, and as people speculate on currency and art (citing non-fungible tokens or NFTs), they not only earn money; they get entertained, too.
(d) True cloud computing
Writing an application and running it becomes free.
No interactions happen outside the network (which is the physical world). In the case of NFTs, this poses a problem, as Voss mentioned about artworks sold in the form of NFTs without the knowledge and permission of the original creators/artists.
(c) DAOs have a major boundary problem
In the physical world, people (e.g., a board or a committee) manage an organization. In the crypto world, “a set of rules written down in code” appear to manage decentralized autonomous organizations (DAOs), according to Kraken, a San Francisco-based cryptocurrency exchange and bank.
For that, Voss thinks the actions of the DAOs are “legally unclear.”
Democracy seems to be lacking or non-existent at all in terms of governance. To partly remedy this problem, Voss proposes to create a “fairer” governance system that will “distribute voting rights long term [sic].”
As for the ugly part – and “there's no shortage,” Voss stressed – it all got something to do with money being the central point of cryptocurrency. Issues concerning theft as well as crypto scams and other fraudulent money-making schemes (e.g., pyramid schemes; Ponzi scheme) also abound.
Woman checks Bitcoin value growth at Binance on her smartphone while holding a Bitcoin
Even after reading the good, the bad, and the ugly things about cryptocurrency, based from the professional opinions of Laurie Voss, you may still find yourself undecided whether to invest in crypto or not.
To help you with your indecision, Investopedia suggests that you do the following before investing:
(a) Make your own research offline and online about cryptocurrencies, but don’t only focus on the popular ones, such as Bitcoin and Ethereum. Study them as well as blockchain technology.
(b) As you do your research, look for white papers about cryptocurrency. Read them thoroughly.
(c) Look for credible online communities of crypto supporters. Join one of them.
(d) With the high volatilityof cryptocurrency, Investopedia also asks you “to time your investment.”