I recently attended a conference that had the best and brightest names in the credit space called CardCon. These individuals discussed topics related to all things specific to credit cards ranging from user experience, benefits provided, access to credit and more. There was a session where an expert was interviewed on stage about the state of the industry . Me being me, I decided to ask the one question that had been on my mind for awhile. “Are credit card companies going to develop products that exchange only in crypto?” I actually have a lot of questions related to crypto in general. But, for credit card focused audience this was the question I decided to ask and I was underwhelmed by his answer. There were a couple of reasons why, he was a little bit condescending towards me in his replies and it was just clear that by him making the comparison that Crypto was Tulips 2.0 that he wasn’t a fan AT ALL of crypto and it seemed like he didn’t understand how it would be used. In this short episode, I’m going to talk share some thoughts on whether or not I believe crypto currency is just another Tulip Mania bubble waiting to burst in our faces and wallets. This is an opinion piece no advice is being given.
In order for me to support my blogging activities, I may receive monetary compensation or other types of remuneration for my endorsement, recommendation, testimonial and/or link to any products or services from this blog. Please read my disclosure here.*
Show Ad
I’m a huge fan and proud affiliate of the Cryptocurrency platform Coinbase. What I like about Coinbase is the extensive focus on user education. They provide opportunities for users of the platform to learn about the different cryptocurrencies on the platform and earn small starter amounts of crypto during the process. I’ve already earned almost $50 in crypto through the earnings opportunities on the platform. In fact, it’s my view that crypto-curious folks would make much more conservative moves in crypto once the started educating themselves on Coinbase. I really respect the complexity of cryptocurrency and appreciate the opportunity to learn more one video at a time. Please note that I may earn a small amount of affiliate income based on your interactions with my affiliate link.
Listen to the Episode
Show Notes
- The World went crazy for tulips in the 1600’s and created what was the first documented Market Bubble. Basically, folks went nuts for the beauty of tulips and the price rose exponentially. Eventually, the price dropped and a huge number of people went broke. Basically, people were addicted to the money and the idea that they could get rich off of tulips.
- Here’s the thing prior to 1636-1637 when the collapse happened what else was there to do other than get excited about the beauty of tulips during a really hard time to be alive. Most people were toiling in the fields and likely had lice.
- It’s almost 2022 at the time of this episode and it’s my view that Cryptocurrency isn’t Tulips 2.0 but that there are headwinds to be mindful of if you’re excited about this alternative to Fiat currency. And for those of you who are like…what’s fiat currency? Those are the currencies that you know and love like US dollars, Canadian loonies and the South African rand.
- I’m going to be blunt-tulips are flowers and the only practical need that they met in the 1600’s was a the human need for beauty. Which makes sense because I would imagine that there were limited options for experiencing beauty in many of these folk’s daily lives.
- Tulips were also vanity product for the wealthy.
- Crypto is a little more nuanced. Many of the legitimate coins being developed have a specific use case. One of my favorites that I also discovered that my friend Eric of Personal Profitability likes as well is the Stellar Lumens. Basically, Stellar Lumens facilitate exchanges similar to Western Union with a big difference: they are cheaper, faster and accessible to anyone with a phone. Instead of having your grandma go to the local grocery store and pay an exorbanent fee to send you money. Your grandma could just click a couple of buttons on her phone and send it immediately to you wherever you are in the world.
- Basically, legitimate cryptocurrencies typically have a use case or problem that they are trying to solve.
- That problem could be dealing with inflation and the impact on your dollar, loonie or rand. Or, the problem of being in an unbanked community but you still have access to a mobile platform via your cell phone.
Is Crypto Tulips 2.0?
- That said there are a lot of Tulip scenarios in crypto. Those could include:
- Not understanding how crypto works, what’s the point of it all and not educating yourself on what it’s all about.
- That education includes: understanding the terminology, reading white papers, understand terms such as staking, wallets, blockchain and more.
- It’s being candid about what you do not know or understand
- Trying to game the market and make a quick win in a ridiculously volatile space. This signals to me a huge lack of respect for the amount of risk that being in the crypto market exposes you to
- Shit coins-the fact they’re called shit coins should be a clue
- Being WAY TOO AGGRESSIVE about your investments in the market and not paying attention to the fact that a large percentage of investors invest less than 5% of their entire holdings in cryptocurrency and go by a philosophy of Hodl/Hold. They are looking at this from a long-term play. Sort of like podcasting or blogging. There’s a lot of work upfront with no guarantee or idea of what the final result will be.
- Not understanding how crypto works, what’s the point of it all and not educating yourself on what it’s all about.
- It’s my view that we’re basically comparing apples and oranges BUT that many people in their enthusiasm for crypto and wanting to be a part of something new are exposing themselves to very real and significant loses of money due to ignorance and hubris.
- Why have I begun to record so much content on crypto then? Because I’m concerned that Black and Brown folks will do one of the following: refuse to even touch this because they don’t understand it or be bullish to the extreme and lose their money without understanding the risks.
- In a recent National Opinion Research Center at the University of Chicago or commonly referred to as NORC at the University of Chicago it was found that 44% of investors are people of color. And in additional research African-Americans were outpacing other communities as investors in the space.
- I want to share the lens through which I view cryptocurrency. The Fresno Drop. What is that? It happened in 1958 when Bank of America sent out 60,000 credit cards to unsuspecting folks in Fresno, California. It was the first time that credit cards as we know them were sent en masse to a community. The Bank of America then had to educate its new customer base on what a credit card was and how to use it. It’s now almost 2022, 64 years later and credit cards are in the wallets of billions of users across the world.
- Why do I share this? We’re 12+ years into cryptocurrency. Even 20 years from now we will still be in the infancy of this mode of currency. While it’s better to be an early adopter maybe it’s better to be focused too early to educating yourself on what in the hell this is.
- Join crypto communities that speak to you. For me, these spaces are specific to being a woman or a woman of color.
- Follow crypto Twitter-they are very active and enthusiastic
- Side-eye EVERYTHING. Seriously, use discernment as I mentioned in a previous podcast episode that I shared called “I’m Not a Financial Expert” I brought up the fact that even 20 years from now we’ll still be in the infancy of the space. Spend time educating yourself first.
- Don’t invest what you cannot lose. I’ve made a vow to only invest coffee money. If I buy a coffee, I can invest the equivalent into crypto.
- Thoughtfully stack your earnings so you are investing less out of YOUR cash. I’m on the Coinbase waitlist for their debit card. I will be able to earn up to 4% in crypto rewards. I can also spend in USD or crypto. This will be my coffee account.
- Who knows what the future holds? All I know is that after a lifetime of watching and reading scifi and dystopian fiction art imitates life. Don’t believe me? Some examples:
- We’re growing meat similar to what happens in some of my favorite Star Trek
- Cell phones
- Facebook Portal
- The Metaverse
- Tonal-the interactive exercise mirror
- All things happening in Sweden and their cashless society.
- Traditional banking and the system as it is now doesn’t serve everyone. If you live in a community that has never had a banking branch, you’re more likely to want to embrace something that embraces your reality and what it takes to serve you equitably.
- You better believe that companies such as Western Union (a Colorado company) have people on staff tasked with how to solve problems that crypto is trying to solve within their existing business ecosystem. In Western Union’s case that would be how to better send remittances to other countries. But, Stellar Lumens is already ahead of Western Union and doesn’t have to sell a reimagined concept of how to better serve their clientele to an board of directors who may be skittish around the idea of crypto…even if they’re investing quietly behind the scenes in blockchain technology.
- Do you think Crypto is Tulip Mania 2.0? Why or why not? I’d love to hear your thoughts!
Latest posts by Michelle (see all)
- How Work Policies Against Black Women Birthed a Love of the Soft Life - 20 March, 2024
- How Taylor Swift’s IP Victory Could Change the Business of Music - 28 February, 2024
- Why Don’t More Personal Finance Content Creators Talk About Policy - 16 January, 2024
[…] Is Crypto Tulip Mania 2.0? […]