Cryptocurrencies – a scam or the future?


Rupert Carlyon is the Managing Director and Founder of Koura Wealth Limitedmanager of the kōura Wealth KiwiSaver program which launched New Zealand’s only KiwiSaver cryptocurrency fund.

OPINION: Cryptocurrencies are a hotly debated topic.

The problem with cryptocurrencies is that everyone seems to have a pretty extreme view; you are either a crypto skeptic or a crypto enthusiast, and there are not many sources of information that fall in between.

Warren Buffett, arguably the most famous investor in the world, said he wouldn’t buy all the bitcoin in the world for US$25 (NZ$40) because they don’t produce anything. His company went even further and calls cryptocurrencies “the death of rats”.

There has been a recent spate of articles about how Blockchain is a failing technology – alongside articles that say true believers in the mission of crypto are holding their ground even though the market has crashed.

This is similar to many new technologies that seem to change the status quo and more often than not the naysayers are people who have not yet done the research to fully understand the potential of these new technologies.

In 2005, no one would have thought that Google would dominate the Internet with its search engine, or that an Apple iPhone launched in 2007 would change computing and the way we communicate.

Rupert Carlyon says people tend to take an extreme view of cryptocurrencies.


Rupert Carlyon says people tend to take an extreme view of cryptocurrencies.

One of the most common criticisms of cryptocurrencies is that they do nothing tangible because they produce nothing. But this is fundamentally wrong.

Cryptocurrencies have extremely important uses:

Money transfers

For many people, transferring money can be extremely expensive.

The World Bank estimates that the average transaction fee for sending money internationally to developing economies is over 6%. This is an exorbitant rate that acts as a significant tax on people’s hard-earned money.

By using cryptocurrencies, transfer fees can be largely eliminated.

The main reason why El Salvador adopted Bitcoin as its national currency was to facilitate international inbound payments – 20% of the Salvadoran economy is based on money from people working abroad and sending money to family.

One of the most common criticisms of cryptocurrencies is that they don't do anything tangible.


One of the most common criticisms of cryptocurrencies is that they don’t do anything tangible.

However, their use of Bitcoin as a national currency has not been without its problems, largely due to the volatility of the underlying asset.

Smart Contracts/Decentralized Finance

Smart contracts use a blockchain to store details securely, and they can trigger automatically when certain things happen, removing the need for an intermediary person (or regulator).

These blockchains are then activated by cryptocurrencies. For example, digital art ownership records are stored on the blockchain and ownership is transferred from one owner to another on the blockchain and may even facilitate a payment to the artist along the way as part of the transaction.

There are many other examples of live contracts, including insurance, lending, and real estate, that are beginning to use smart contracts to remove third parties (and therefore costs) from the supply chain.

An alternative place to keep your savings

Usually, governments control the money and have power over its distribution and supply.

In countries with less stable or less reliable political systems, it is easy to see why citizens may prefer to hold their hard-earned savings in cryptocurrencies rather than local currency which can be devalued or seized at any time (think to Russia, Zimbabwe, Venezuela or even China).

To understand cryptocurrencies, it is crucial to understand the fundamentals of money and what it really is.

Money is effectively a socially acceptable standard by which things are priced and with which payment is accepted. He has gone through many incarnations, from animal skins, precious metals and paper notes to bank computers. I would say that cryptocurrencies, indeed, are no different.

It is impossible to say that for very long cryptocurrencies were the Wild West of finance and that there were countless scams and hacks.

People have invested in cryptocurrencies based on their name (think Doge – Coin) or to earn a “safe return” of over 30%, or even just to jump on the bandwagon of a freshly minted new coin . The number one rule in finance is that if it sounds too good to be true, it often is. Additional research and work by investors may have enabled individuals to avoid some of these scams.

The volatile nature of cryptocurrencies makes it harder for people to use them in everyday transactions. Until we see a stabilization in their prices, it’s hard to see them being used in traditional finance. It’s also important to remember that, as Forbes reported, there’s a huge divide between industry and regulators when it comes to being on the same page.

Cryptocurrencies are still in their infancy, and like all new products in their infancy, they have both their opponents and their supporters.

However, what is clear is that they have great uses that aren’t going away. Which cryptocurrencies will survive is the big question that no one knows the answer to. The answer may even lie in stablecoins.

If you are considering investing in cryptocurrencies, be sure to do your research. Be certain of why you are investing in the cryptocurrencies you choose and that you understand how these currencies are stored.

Remember that these are very risky and volatile assets and like all risky assets they are only suitable for a small part of a larger investment portfolio.

Investing in cryptocurrencies involves significant risk, and investors should ensure they are advised and consider relevant risk factors before investing. For a product disclosure statement, see


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