Number Go Up

What happens when technology and finance collide? "Number Go Up" explores how cryptocurrencies have reshaped the world, for better and worse, in the quest for innovation, freedom, and riches.

1. The Technology Behind Bitcoin Changed Everything

Bitcoin didn’t just introduce digital coins; it introduced a groundbreaking concept known as the blockchain. This decentralized ledger redefined how transactions could be recorded transparently without middlemen like banks. Blockchain’s ability to ensure security and transparency made it an attractive tool for those seeking alternatives to traditional financial systems.

This technology empowered Bitcoin to grow into a symbol of financial independence. With no central authority, people saw Bitcoin as a means of reclaiming control over their money. Early believers were drawn to its promise of decentralization and freedom. The blockchain technology underlying Bitcoin set a foundation for thousands of digital currencies that would follow.

Still, the technology wasn’t foolproof. As Bitcoin’s value skyrocketed, it attracted both innovation and greed. Scammers, hackers, and governments began exploring ways to circumvent security measures or manipulate the system for their benefit. Blockchain was revolutionary, but its impact on global finance proved complicated.

Examples

• Bitcoin’s first legitimate transaction was a pizza purchase for 10,000 BTC – now worth millions of dollars.
• Blockchain technology is now being considered in industries beyond finance, including supply chain management and healthcare.
• The decentralized nature of the blockchain was exploited by hackers, resulting in billion-dollar cryptocurrency heists.

2. The Allure of Quick Riches Fueled the Cryptocurrency Boom

Bitcoin’s meteoric rise in value created a gold rush mentality. Investors scrambled to get in early, driven by FOMO (fear of missing out) and stories of people who became millionaires overnight. For many, the potential for wealth overshadowed the actual understanding of how cryptocurrencies worked.

This frenzy wasn’t limited to seasoned investors. Teens, retirees, and tech enthusiasts alike dived into the crypto pool, often risking their life savings. Promises of exponential wealth looked too good to resist, even when the risks were evident. Around every corner were get-rich-quick schemes where “gurus” promised secret strategies for success.

The volatile nature of the cryptocurrency market made fortunes just as quickly as it wiped them out. While early adopters profited immensely, many latecomers lost money during sharp market crashes fueled by speculation and lack of regulation.

Examples

• Bitcoin surged from under $1 in its early days to over $60,000 at its peak in 2021.
• Social media influencers promoted coins like Dogecoin, often causing them to skyrocket temporarily.
• Many people invested their life savings into cryptocurrencies like Luna, only to see them crash and lose nearly all value overnight.

3. Stablecoins Seemed Like a Safer Bet

Stablecoins like Tether were designed to add a sense of calm to the chaotic cryptocurrency market. Pegged to stable assets like the US dollar, these digital currencies provided a reliable option for traders looking to avoid extreme price fluctuations.

Stablecoins solved the problem of transferring money between cryptocurrencies and traditional currency. They became a key tool on exchange platforms, helping traders move funds easily and quickly. However, questions soon emerged about whether stablecoins were truly backed by the assets they claimed. Critics argued that a lack of transparency posed risks to the entire financial system.

For all their practicality, stablecoins weren’t immune to controversy. When concerns about Tether’s backing arose, some experts warned that any collapse in confidence could trigger broader panic across the crypto market.

Examples

• Tether claims every coin issued is backed one-to-one by US dollars.
• Stablecoins enable 24/7 global currency trading, even when banks are closed.
• Allegations surfaced that Tether’s audits were insufficient, sparking debates about its legitimacy.

4. Cryptocurrencies Sparked Dangerous Scams

The growth of cryptocurrencies also opened the doors to fraudulent activities, from elaborate Ponzi schemes to the exploitation of stablecoins for dark purposes. Scammers used the allure of cryptocurrencies to trick people into handing over their money.

One heinous example is the “pig butchering” scam, where victims are groomed with promises of lucrative crypto investments. Once trust is gained, they’re conned out of everything they own. Similarly, in Southeast Asia, criminals used Tether for human trafficking operations, leveraging its anonymity to evade detection.

Such stories highlight the darker side of digital currencies and the pressing need for greater oversight. While crypto promised financial liberation, bad actors often use these tools for shocking crimes.

Examples

• Victims of “pig butchering” scams often lose their entire life savings in one transaction.
• Tether transactions were traced to human trafficking rings in Cambodia.
• Regulators have struggled to catch up as crypto scams evolve rapidly.

5. Sam Bankman-Fried’s Rise and Fall Showcased Crypto’s Flaws

Sam Bankman-Fried, the founder of FTX, was once celebrated as a genius who legitimized cryptocurrency exchanges. FTX introduced innovative tools like derivatives that made advanced trading more accessible. At the same time, Bankman-Fried’s commitment to philanthropy painted him as paradoxically altruistic in a greed-driven industry.

However, the same traits that built his reputation also caused his downfall. Reports of FTX’s internal financial instability revealed alleged misuse of customer funds. Bankruptcy soon followed, marking one of the largest implosions in crypto history.

Bankman-Fried’s legacy embodies both the promise and pitfalls of cryptocurrencies. His story became a cautionary tale for the risks of ambition, gambling, and unchecked power in the industry.

Examples

• FTX was ranked among the world’s biggest trading platforms before collapsing.
• Bankman-Fried publicly pledged to donate his wealth to charitable causes.
• Investigations suggested FTX was mismanaging billions in customer funds.

6. Bitcoin Failed as a National Currency in El Salvador

President Nayib Bukele’s decision to make Bitcoin legal tender in El Salvador became a bold experiment. The campaign promised a financial revolution, making the country a global pioneer in cryptocurrency adoption.

However, the rollout faced significant challenges. Many citizens, reliant on stable incomes, didn’t trust Bitcoin’s volatility. Although the project included Bitcoin incentives and ATMs, the overwhelming preference remained for the US dollar. Bukele’s increasingly authoritarian policies only amplified skepticism.

This experiment highlighted the disconnect between Bitcoin’s theoretical promise and its practical applications in everyday life. The initiative brought attention to cryptocurrencies but failed to deliver tangible economic benefits.

Examples

• Each citizen in El Salvador received $30 worth of Bitcoin as an incentive.
• Bitcoin kiosks were installed nationwide, but most went unused.
• Polls indicated most Salvadorans distrusted or avoided using Bitcoin.

7. Volatility Limits Bitcoin’s Utility

Unlike traditional currencies, Bitcoin’s value can swing wildly in short periods. This unpredictability makes it unreliable for day-to-day use in most scenarios, from buying groceries to paying rent.

While investors enjoy the high-reward potential of these dramatic price shifts, business owners and employees struggle to pin down reliable payout systems. Critics argue Bitcoin acts more like an investment asset than a functional currency.

This volatility often stems from speculation, meaning Bitcoin’s value is driven more by market psychology than practical supply and demand.

Examples

• Bitcoin lost nearly half its value in months during the 2022 market crash.
• Retailers who accepted Bitcoin faced the risk of losing money due to sudden value drops.
• Few workers in El Salvador’s Bitcoin rollout chose to be paid in the currency.

8. Lack of Regulation Remains a Major Shortcoming

Cryptocurrencies exist largely outside traditional laws, which has been both a strength and a liability. Their unregulated nature fosters innovation but also creates opportunities for fraud, misuse, and market collapse.

Efforts to regulate cryptocurrencies vary by country, with mixed results. Some nations embrace them as emerging technologies, while others enforce bans. The global market’s borderless nature complicates oversight further.

Regulation may be on the horizon, but crypto’s growth continues to outpace lawmakers, leaving investors vulnerable to a volatile and, at times, dangerous ecosystem.

Examples

• China banned most cryptocurrency transactions but still tolerates mining.
• The US SEC has filed cases against fraudulent ICO (initial coin offering) schemes.
• Lack of uniform regulation makes cross-border enforcement difficult.

9. The Crypto Space Thrives on Contradictions

Cryptocurrencies represent freedom, yet their anonymity enables criminal behavior. Enthusiasts champion innovation, but that very innovation has caused massive financial losses. These contradictions are inherent to the crypto world, inviting both admiration and criticism.

Bitcoin’s promise of decentralization appeals to many, but its execution often relies on centralized exchanges for ease of access. Stablecoins, hailed as solid foundations, face their own trust issues. The future of cryptocurrencies remains unpredictable, shaped by these ongoing tensions.

As the crypto market grows, resolving these contradictions will remain one of its biggest tests moving forward.

Examples

• Centralized exchanges like Coinbase dominate a system built around decentralization.
• Blockchain is praised for transparency yet used for illicit activities.
• Bitcoin is promoted as a haven against inflation, but its own volatility undermines its reliability.

Takeaways

1. Research before investing to understand cryptocurrency risks and avoid falling victim to scams.
2. Monitor regulation developments to anticipate how they will shape the crypto market’s future.
3. Be cautious of promises that seem too good to be true, especially in such a volatile environment.