Sometimes it's hard to spot the difference between a legitimate investment opportunity, and a Ponzi scheme. Nowhere is this more true than in crypto. That's because crypto isn't like other investments. You're not buying shares in a public company, or a piece of real estate. You can't base your decision on annual sales, or by looking for comps in the market. Nor is crypto just another commodity...

You can't eat it, or melt it, and despite what some may believe, you certainly can't burn crypto to use it as a source of energy. So if a cryptocurrency isn't a company, a piece of property, or a commodity, what is it? Well, as the name implies, it's a currency, aka money.

Which is why I believe so many people have such a hard time understanding crypto. We've spent our entire lives thinking of money as the crisp paper bills we carry around in our wallets, or some digital representation of them. From the time we were children, we've never thought of money as anything else, so to suddenly redefine the way we think of money isn't going to be easy. After all, it's a lot simpler to understand pieces of paper with numbers on them compared to looking up outputs on a distributed ledger.

It's no wonder why so many people see cryptocurrencies as nothing but a Ponzi scheme. For them, it's impossible to picture using any kind of money other than what gets issued by the various governments of the world. They can't imagine living without dollars, euros, or won, let alone money that comes with private keys. They don't see how money can be improved, because to them it would be like trying to improve the water we drink, or the air we breathe.

To these people, investing in crypto can't be anything but a Ponzi scheme. They see no reason why anyone would want to buy it other than to sell it to the fool willing to pay them a multiple of what they paid for it. They don't realize that money can be something other than what they have sitting in their bank accounts. Like water, or air, money to them is an element.

But money isn't an element, it's a technology, and one that's ready to be upended for the first time in generations. The way the internet is a technology that facilitates communication, I see money as a technology that facilitates commerce.

Given recent events, it's understandable why so many are skeptical about crypto. Instead of creating more value in the world, all crypto seems to have done is bring out the worst in people. But like any other tool, crypto can be used for both good or evil, even if it may not seem like it as of late.

Throughout crypto's history, all we've heard is how it can be used to buy drugs, or to gamble, and how it's cost people their their life's savings, or their marriages, or even their lives.

But I for one know that crypto is capable of accomplishing so much more. I see it as technology that can create new opportunities by connecting people all over the world in a way that was never before possible. I see crypto enabling new business models, new incentives, and new ways to govern. Crypto can make it possible for us to no longer have to rely on institutions to control our money, because we will finally have the ability to control it ourselves. Crypto evens the playing field, while opening it up to anyone who wants to participate in a free and global economy regardless of where you're from, or who you know.

Perhaps you think I'm delusional. Maybe you even think I'm crazy, but what's crazy is doing the same thing over and over again and expecting different results. But that's exactly what humans have been doing for centuries by relying on the same defective form of money and thinking this time it's going to be different.

I don't know about you, but I'm ready to try something new. But first, we need to stop falling for Ponzi schemes, or trying to take shortcuts, and instead it's time to finally take advantage of what just might be the greatest opportunity of our lifetime. To be continued...

Cryptocurrencies: Investment Opportunity or Ponzi Scheme? Part 1