Debunking 10 Narratives About Crypto
Most of what you read about crypto is not what it seems.
Crypto is full of misinformation.
Part of that is because new folks joining this space have no clue how blockchains actually work. They are easy prey for those that abuse their trust.
To fix that, I compiled 10 crypto narratives and assessed them on their merits.
Most narratives exist simply to take your money and I can easily smell their bullshit. I’ve seen lots of that since I started this journey in 2014. Let’s go.
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Solana will replace Ethereum
Verdict: False ❌
Anyone telling you that Solana can replace Ethereum has an agenda. Part of that relates to them trying to take your money. The frank reality is that neither Solana, nor any of the existing competitors, can replace Ethereum. At least not today.
The reason is simple. Ethereum’s decentralized finance (DeFi) by total value locked (TVL) is the largest in crypto at 60%. That’s 10x times that of Solana.
This is why Ethereum is valuable and will continue to be valuable. Moreover, most of the DeFi TVL on other chains, including Solana, is fake. A recent article exposed a lot of fraud on Solana.
Pay close attention to who does the writing. Sometimes, competitors will trash Solana or Ethereum so they can shill you their own blockchain. If that’s the case, they are worse. Don’t trust them either.
For all intended purposes, Solana didn’t do too bad in this cycle after a 20x, but it’s likely a big trap long term simply because it’s centralized and the token has high emissions = high inflation. Ethereum does much better on those two fronts.
If you missed the 20x on Solana, don’t expect it to happen again. It’s not the next Ethereum!
Bitcoin will die / is dead / outdated
Verdict: False ❌
Anyone writing that about Bitcoin falls in one of these two categories:
They don’t understand it
They have an agenda
There are more people in the first category than the second one. Ignorance is one thing so I will not focus on that, but you can read this guide I made if you’re still in the first category. However, those in the second category do their best to trash Bitcoin to legitimize their own project.
They say: Our blockchain is faster and cheaper than Bitcoin! That may very well be true. However, what they won’t tell you is what trade offs you pay for those “advantages”. Likely you pay with lack of security and decentralization.
Solana qualifies on that front, it’s neither decentralized, nor secure. Its network crashes regularly. That’s a poor place to store your wealth. Bitcoin did not die since 2009 when it was launched, however, there are thousands of altcoins that did.
Bitcoin is the most elegant cryptocurrency invented to date and has managed to find a good balance with respect to the blockchain trilemma. No project can claim its perfect in all three, it’s a blatant lie if they say that. Bitcoin and Ethereum chose decentralization and security at the expense of speed or scalability.
For this reason, Bitcoin is also called digital gold. It may not be the fastest network on the planet, but it is the most decentralized. That means security comes first and if you want to preserve your wealth, you keep it on the Bitcoin network.
As long as that holds true, Bitcoin is not going anywhere. You can wait a few extra minutes for that peace of mind. Ethereum is second on that scale.
Tether USDT has no backing
Verdict: False ❌
Funny how such statements are usually coming from competitors. Do you see the pattern? Crypto is a fierce market, only the best survive. Tether is the largest stablecoin in crypto and the first to reach mass adoption. They kept that advantage since 2014.
Competitors like Circle USDC did their best to crash it, but so far, have failed. Lately, even Coinbase is trying to displace USDT in favor of USDC, but it’s unlikely to work. Sam from FTX tried to kill USDT by dumping $10 billion of it in 2022. Take a look at this video from the bank managing USDT.
It didn’t work since Tether was liquid and had the backing. On the other side, USDC did lose its peg to the dollar when one of its banks went under. Quite the contrast.
Since 2014, USDT has been the most liquid and reliable stablecoin in crypto. It is truly global, not like USDC which is mostly a US focused project.
There’s no reason to doubt USDT liquidity position, no matter how much their competitors wish for it. Moreover, Tether has started buying Bitcoin as additional collateral to its usual 100% USD backing. Hard to see them fail at this point.
AI, DePIN, DeSo, RWA, GameFI are innovation
Verdict: False ❌
These labels are like stories. Every cycle you will hear new stories trying to impress you and syphon your money. In 99% of cases there is no innovation involved. It’s the same old thing with new clothes pretending to be something different.
If you’ve been in crypto long enough you’ll notice how the same blockchain rebranded three times. For example, in 2015 RaiBlocks was created, later it changed its name to Nano, and then, most recently, to XNO.
Most blockchains do the same with narratives. In one cycle it’s all about being cheap and fast (we already covered that), in the next it’s all about AI, DePIN, or RWA. Decentralized Physical Infrastructure Networks (DePIN) blockchains like Filecoin crashed 99% from their all-time high. You can’t fix that by changing the labels on your site to DePIN.
Real World Assets (RWA) tokens are mostly scams. They will tell you “buy our token to invest in real estate! Each token represents a share in our properties!”. Please don’t fall for such scams, there are no physical properties anywhere backing those tokens.
You can replace “real estate” with luxury items, green certificates, trees planted somewhere on the planet, pets, and so on. It’s all fake, but may get better later thanks to regulation.
GameFI is another sector that has no need for a blockchain. Did World of Warcraft in-game gold need a blockchain? No. It’s totally unnecessary. The focus is always on the tokens rather than the game, hence why this sector struggles with adoption. The games are also mostly trash.
As for AI, that has real use cases, but not for blockchain technology per se. A blockchain network is pretty simple and essentially an open ledger. AI can be useful to analyze the blockchain and its transaction, but not much else. You don’t need AI technology to send Bitcoin to another address.
AI could be useful when it comes to DeFi. However, that has little to do with any token price. If a blockchain uses AI as its main marketing tool, assume it’s a scam. Decentralized Social Media (DeSo) blockchains are not much different either. Unlikely we will get Facebook on a blockchain any time soon. It may come, but so far it’s just vaporware.
Making money in crypto is easy
Verdict: False ❌
You know who will tell you this? Mostly crypto exchanges and gambling sites. They don’t care if you win or lose, they still make their commission. Their incentives is to tell you anything to get you to register on their site.
Follow the incentives and you will find your answers.
Making money in crypto is easier during a bull market. However that is short-lived and most folks join crypto when the market tops. They buy the top trying to chase greed. The best time to buy is during a bear market when nobody speaks about crypto. The best time to sell is when everyone speaks about it.
If you make life-changing money, you keep it by moving it into Bitcoin. Anything less is a recipe for disaster. I wrote extensively about this. Here’s a recent guide.
Timing the market is hard. Especially if you’re new here. You will get better with time, but don’t join crypto assuming it’s easy. You’re extremely vulnerable when you first join it! This is why I created this community. To help you. You can also support me by upgrading your subscription. Big thanks to existing Patrons!
NFTs are like real art
Verdict: False ❌
NFTs on Ethereum are not real art simply because they are not even stored on-chain or in your ETH wallet. They are a smart contract pointing to a link or image stored on another network, off-chain.
For example, the Arweave network is designed for permanent on-chain storage and some NFTs from Ethereum are actually stored on Arweave. Ethereum network just links to them.
If the link breaks, your NFT on Ethereum is just a link. No image. Now you start to realize why the NFT craze on Ethereum was mostly a big hype that turned into a lot of lost money for most.
On the other hand, ordinals or NFTs on Bitcoin, are stored on-chain. That means the image itself is on the Bitcoin network. It can never be deleted as long as the BTC network exists. This is quite different than what happens on Ethereum.
For this reason, if you plan to gamble in this digital art space, do it on Bitcoin! There the images are real and exist on the most decentralized network on the planet. As for their value, the market decides that.
Decentralization is not important
Verdict: False ❌
Any blockchain that does not prioritize decentralization misses a key point. Bitcoin was created to decentralize money. It succeeded. Therefore, those blockchains or projects that do not focus on decentralization have very little in common with Bitcoin or what it stands for.
Most of the time, when you’re buying other cryptocurrencies you are not buying a better version of Bitcoin. No. You are buying a stock like Apple, Facebook, Netflix, Google, or Amazon. Worse, you may be buying something similar to an app on your phone. Few of those last their hype cycle.
The equivalent of Apple in crypto is Ethereum. The Apple ecosystem is the DeFi ecosystem of Ethereum. It’s not a bad purchase in that respect, but it’s definitely not the same like Bitcoin. Bitcoin IS money. Ethereum isn’t. Plus, Ethereum can be replaced by the next Apple of DeFi.
Bitcoin can’t be replaced unless we invent a better form of money. Doing that can take hundreds if not thousands of years. The best form of money before Bitcoin was gold. Fiat money like USD is an anomaly in the history of money and inferior in many respects to gold and Bitcoin.
This is a big difference most miss. You may invest into altcoins like you do in stocks, but you store your wealth in Bitcoin if you want to keep it.
Layer 2s are the way forward
Verdict: False ❌
Layer-2s do not solve the blockchain trilemma. They gain speed and sub-contract security and decentralization to other networks like Ethereum. That does not mean they can’t fail and take all your money with them when they fold.
Layer-2s don’t replace Bitcoin either. They can, at best, make its use more convenient at the expense of security and decentralization. For this reason, you do not keep big amounts of money or your wealth on layer-2 networks.
Most recently, Ethereum decided to scale using layer-2s. Basically, ETH is surrounded by many sub-networks that process transactions. This off-loads some of that burden from Ethereum to the sub-networks.
This does not make Ethereum proper better. However, it does help to keep money within its ecosystem of layer-2s instead of that money going to a different network or blockchain ecosystem like say Solana.
Web3 is the future
Verdict: False ❌
In a nutshell, Web 3 is Web 2, but decentralized. Think Google or Facebook, but decentralized without any one entity having full control. In theory, this is a welcomed change because it would empower the end user, rather than all the power being concentrated in the hands of these companies.
You can do that by using blockchain technology. However, in practice, apart from DeFi which actually has a real use case and mainstream adoption, other use cases have not reached such levels of adoption to replace Web 2 applications.
It may take more time until that happens, or this concept is just a buzz word falling in the same category like the labels under point #5. Time will tell what will happen, but for now, Web 3 is just a possible vision of the future. It does not mean it will turn into reality.
Cryptocurrencies will replace the dollar
Verdict: False ❌
There are only two possibilities here:
Bitcoin replaces all fiat money, including the US dollar
Stablecoins, like USDT or USDC, replace the US dollar
In the first case, everyone benefits by using the hardest money ever created by man. In the second case, everyone ends up using the same US dollars but in digital form where they can track or freeze your account even better than today.
No government will accept losing control over their monetary policy. Therefore, Bitcoin is more likely to be seen as a threat once adoption passes a certain percentage to the detriment of the US dollar or similar fiat currencies.
If the US dollar turns into a stablecoin or central-bank digital currency, nothing really changes, apart from more control over your financial privacy.
Let me know what you think of these narratives and if there are others I should explore in the future!
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All info is provided for educational purposes only and is not financial advice.
Well written and chalked full of valuable information to keep us out of harms way. Thanks for being a rare truth-teller in the grifter infested crypto space. Respect!