In June 2021, the popular online gaming group FaZe Clan was accused of engaging in a cryptocurrency scam known as “Save the Kids”, which was the name of the cryptocurrency being promoted by the members of the team. As Bitcoin and other cryptocurrencies reach the mainstream, those who want to get into the market need to be very careful and be wary of the hype.

This is just one instance where an influencer or influencer group has been caught using their position of power to run cryptocurrency scams on their impressionable young audience. It can be argued however that this is part of a bigger problem involving cryptocurrency as a whole.

Cryptocurrency is a form of online currency found through data mining; it is meant as a counterpoint to the U.S dollar.  It has become highly attractive and lucrative thanks to influencers like FaZe Clan, and big celebrities such as Elon Musk. Any business that allows cryptocurrency as a form of payment becomes immediately attractive to customers.

Problem arises with the fact that Bitcoins and other forms of cryptocurrency are extremely volatile in their market value. One moment they can be worth thousands. In another moment, the Bitcoin value can easily plummet to almost zero.

People often get into cryptocurrency trading and the market on the selling point that it is “booming,” depending on how one looks at it. When the aforementioned famous people do what is known as a “pump and dump”, where the influencers hype up the cryptocurrency and then sell it when the value reaches a high threshold, resulting in the value plummeting due to the demand dissipating.

There is also the element of cryptocurrency that makes it attractive to criminals. While records of transactions using this currency exist, they are very much separated from the much more efficient records using other world currencies. Many hackers and those who commit ransomware and cyberattacks like to use cryptocurrencies for payments because they are much harder for the authorities to track.

Does all of this mean regular people should not try to invest in bitcoin or other cryptocurrencies? Not necessarily. While there are many problems and shady aspects of cryptocurrencies that potential onlookers are likely not aware of they should look into, that does not mean the idea of cryptocurrencies are bad at face value.

The entire idea of cryptocurrencies is born out of the libertarian idea of putting the power in the hands of the individuals and not government agencies and regulators. The value at times has made it so that people can indeed make a ton of money by investing in it. The Washington Post pointed out in April of this year that the value of the cryptocurrency market was equivalent to around $85 billion.

There are over 8,000 different types of cryptocurrencies as of the time of this article. Because cryptocurrency allows new types to be built on one another, they will only multiply. There will definitely be more as time goes on, all with different values and other aspects that set them apart. Some are “meme-coins” like the very popular Dogecoin, which is a very popular cryptocurrency likely owing to the popular meme it is named after. Even though it is only a digital coin, thus the banks give it no real discernable value, the popularity of it through users has helped make it somewhat of a formidable form of economics.

Cryptocurrencies are an interesting experiment that has its place in the financial system. If people and onlookers want to take part in this experiment, that is fine. But they should be very careful about when they invest and the buzz surrounding the market overall, because what appears as a very attractive prospect at one moment could result in a very large sum of money wasted.

Columns reflect the opinions of the authors and are not necessarily those of the Editorial Board, The Daily Iowan, or other organizations in which the author may be involved.