Since then, cryptocurrency and related technologies have gained popularity but are still considered niche interests in the broader scope of personal finance.
Investing legend Warren Buffett said, “Cryptocurrencies basically have no value, and they don’t produce anything” in February of this year. Similarly, JPMorgan CEO Jamie Dimon was equally skeptical of cryptocurrency and called Bitcoin a “fraud.”
Yet, the tide is turning. JPMorgan has since approved multiple cryptocurrency exchanges for its users and is working on its own coin. Popular trading app Robinhood also allows users to buy and sell cryptocurrencies, like Bitcoin and Ethereum.
But what exactly do all these cryptocurrencies and blockchain projects do? Are they just a secondary and less stable stock market?
If you’re wondering about this, you’re not alone. A 2017 HSBC survey found that 59% of consumers had never heard of blockchain. Furthermore, 80% of those who had heard of it didn’t understand it at all.
“Cryptocurrency and blockchain are unusual concepts foreign to most people,” said blockchain investor Sergej Heck. “There’s a lot to learn and not too many resources to learn from.”
Heck is the founder and CEO of the crypto education platform MarketPeak and the PeakDeFi app, which allows users to lend, borrow, store, and send cryptocurrency. Between these two platforms, Heck reaches thousands of crypto investors who are interacting with or learning about blockchain technology.
“I developed MarketPeak because there’s a lot of noise and confusion surrounding blockchain and cryptocurrency,” said Heck. “MarketPeak is an education and accelerator platform driven by the community. The focus is primarily on improving financial intelligence and preparing users for the next generation of payments and investments.”
Heck believes that learning about cryptocurrency is essential for anyone interested in financial wellness.
“One thing is clear: There will be a major upheaval in the financial world in the coming years and decades,” he said. “Sooner or later, the traditional financial institutions will be replaced by automated and decentralized finance.”
The Future of Cryptocurrency
Heck noted that while many were initially skeptical about cryptocurrency and blockchain, many people turned that same skepticism toward the stock market. Earlier this year, the stock market had its worst crash since 2008, and prominent stocks like Apple and Tesla fell from all-time highs. Yet, Wall Street flourished while unemployment numbers climbed.
“One big problem with the stock market is that it doesn’t always reflect reality,” said Heck. “The stock market was rising alongside unemployment rates. It was having some of its best days when people were getting laid off.”
If investors have trouble trusting the stock market, what can they put their faith in?
The Slow Rise of Cryptocurrency
“While the technology is new, more and more people are realizing the power of cryptocurrency and blockchain,” said Heck. “Sooner or later, the traditional financial institutions will be replaced by automated and decentralized finance.”
He noted that DeFi Pulse, which tracks cryptocurrency-related projects, saw significant activity increases over the past year.
“According to DeFi Pulse, there was a total of $500 million invested in DeFi projects in March,” he said. “Fast forward to three months later, and now there’s over $7 billion invested in DeFi projects. That’s a phenomenal increase. Clearly, investors are finally taking notice.”
These projects require less overhead, less bureaucracy, lower fees, and no middlemen when compared to traditional finance projects. Plus, using blockchain adds the benefits of automation and complete transparency.
One of the most potent aspects of blockchain is that it helps bring financial power to those who don’t usually access it. A 2017 FDIC survey found that a quarter of U.S. households are unbanked or underbanked, meaning they don’t have a bank account or mostly rely on financial services outside the banking system. Cryptocurrency gives these people the power to earn and loan money without the help of a centralized financial institution.
Preparing the Next Generation of Entrepreneurs
Even now, when the world is locked down due to the COVID-19 pandemic, Heck is still finding a way to reach out to people and educate them.
“We are educating people online via video courses or webinar meetings,” he said. “People have more free time than ever, so it’s the perfect opportunity to learn about something that will impact the future.”
Heck believes that cryptocurrency and decentralized finance will lead to the next business revolution. After all, blockchain has countless upsides, and some have called it “the most important invention since the internet itself.”
MarketPeak helps train its users to become familiar with cryptocurrency and learn about its nuances. Users can practice by trading and investing small amounts. Once their confidence grows, they can scale up, increase their transaction size, and begin investing larger amounts in DeFi projects that they want to fund. Eventually, they’ll be able to build and run projects using the knowledge and capital that they acquired.
“MarketPeak also helps its users improve one significant thing: their mindset,” said Heck. “Many investors overlook the importance of having a stable mindset and self-confidence. Both these traits can take you a long way.”
Investors who get too greedy or experience FOMO will inevitably lose anything they’ve gained, according to Heck. Much like investing in the stock market, buying and selling cryptocurrency requires patience, research, and foresight. You can’t just buy random coins and expect to make a considerable profit. It might sound tedious, but it’s well worth the effort to stop and think about what you’re doing before blindly rushing in.
“In the same way that Jeff Bezos took advantage of the then-burgeoning internet, I want to help investors do the same with blockchain technology,” Heck said. “Any savvy entrepreneur wants to innovate and update before everyone else. Well, cryptocurrency might as well have a flashing sign with an arrow pointing to the door. It’s going to be part of our future, so why not join the bandwagon now?”