Misconceptions about cryptocurrency are rife, and I used to be a part of the group that held on tightly to most of these misconceptions. Today, the mention of the word cryptocurrency never ceases to spark conversations about “Ponzi schemes”.
Are these fears justified? Well, in one breath I would say yes. The stories of Ponzi schemes are not a new thing in Ghana, where I come from, and many have fallen victim. Most people remain skeptical about investments that promise passive returns.
In addition, for blockchain and cryptocurrency, the concepts underlying them are too complex for many to understand. A cousin of mine once fell victim to one of such Ponzi schemes and lost his life savings through one get-rich-quick investment that promised juicy returns within a short period. Just so you have a better appreciation, let me give you a slight background to my cousin’s fate that befell him some five years ago.
As a young businessman who had been trading in cloths for years, he had saved enough money to enable him to do other investments. So, when this new investment opportunity presented itself, he couldn't wait to join too. Most of his co-businessmen had also invested their savings too.
Some even shared stories of how they had convinced all their family members to invest as well. The testimonies of people who had made huge returns (though unverifiable), from earlier investments, were the talk of town at the time. My cousin could not be just left out, he joined the bandwagon with hopes of doubling his savings the fastest way. Of course, we all want a ‘soft life’ don’t we?
Months later, the Securities and exchange commission of Ghana (SEC) started a legal tussle with the all famous ‘Get rich scheme’ and ordered for their activities to cease. To cut a long story short, it was the beginning of what was to become the heartbreaking stories of most people who had their savings there and my brother, like many other investors, till date have not had their investments back.
Experiences like this tie in with the proverbial ‘once bitten twice shy’ experience and so most people remain highly skeptical about initiatives that promise some returns particularly online ones. Questions like, where will the interest come from, who am I investing the money with, where is their office located, what if the ‘company’ doesn’t pay me, amongst others, remain top concerns for many.
I used to ask similar questions too until recently when I developed a burning interest to find out more about cryptocurrency. The internet is flooded with lots of information, the technical terms, just brain-racking. I then met a crypto enthusiast from the United States of America who would make this easier for me to understand. The technical terms became more relatable after series of tutorials from him. Here is where I got to learn of project driven cryptocurrencies and tokens like Cardano, Etherium, Shiba Inu, Near, Solana, Monero amongst others. These cryptocurrencies didn’t just have nice names, they were driving huge socio-economic gains in certain parts of the Western world and even in Africa.
For example, Solana makes it possible to effect 65,000 transactions a second with near zero fees. Cardano also known as ADA has also proven to be 1.6 million times more energy-efficient than bitcoin in ensuring faster transactions. The NEAR token is primarily used to pay transaction fees and as collateral for storing data on the blockchain.
Some cryptocurrencies are built to promote and protect the works of those in the creative industry, promote accountability in governance, amongst others.
Crypto trading has its down sides too which could cause investors to lose some monies, and oh, as expected in every society, there are some bad-nuts here too, who would often hack into accounts, and make away with one’s investments. That notwithstanding, given my basic exposure to the crypto world, I have become more appreciative of its huge benefits now. The positives far outweigh the negatives.
The stories of people turning into millionaires through crypto are also very real. I should add, that given the past experiences with some ponzi schemes, it will take lots of effort to correct the perception of most Ghanaians and Africans in general about how cryptocurrency works. Probably, after many get to know that the stories of crypto-millionaires are true, however, it’s not an entirely get-rich- quick scheme, they would appreciate it more like I do now.
Crypto investments require lots of patience as one leaves his or her investment to grow overtime. Some currencies could take 5-10 years to grow. All this requires lots of patience in a highly volatile market. At this point, I am motivated to deepen my knowledge in cryptocurrency which I now refer to as ‘the online goldmine’ and the future of trade and finance in general.
Would I be happy to be a crypto-millionaire someday? Of course! However, even more gratifying would be my ability to also develop smart initiatives that could solve a problem close to you using the blockchain technology. Until then, you just might want to take a minute or two to read about it too.
Afia Ofosua, Broadcast Journalist in Ghana with interest in cryptocurrency adoption for financial inclusion
Photo credit: Africafeeds.com
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Disclaimer: "The views expressed in this article are the author's own and do not necessarily reflect ILAPI's official position. ILAPI will therefore not be responsible or liable for any inaccurate or incorrect statements contained in this article."