However, the recent crash of a popular stablecoin and Bitcoin’s dramatic fall from nearly $69,000 to under $22,000 in just two years (at press time), highlights some of the dangers and risks. stemming from decentralized financial systems.

The cryptocurrency market crash wiped out billions of dollars and sent investors into a tailspin.

Even the most enthusiastic cryptocurrency cheerleaders recognize the potential risks and instability that cryptocurrency can have. Its volatile market and coin prices can change quickly and regularly, putting its money on the line. The market is also full of scammers eager to take advantage of users.

Still, some say it’s not much different from the ebbs and flows of the stock market.

“Even though we are currently experiencing a bear market, historically Bitcoin is still on the rise,” Mesidor said. “It’s a currency that nobody paid attention to and now it’s around $20,000.”

However, the recent crash of a popular stablecoin and Bitcoin’s dramatic fall from nearly $69,000 to under $22,000 in just two years (at press time), highlights some of the dangers and risks. stemming from decentralized financial systems.

The cryptocurrency market crash wiped out billions of dollars and sent investors into a tailspin.

Even the most enthusiastic cryptocurrency cheerleaders recognize the potential risks and instability that cryptocurrency can have. Its volatile market and coin prices can change quickly and regularly, putting its money on the line. The market is also full of scammers eager to take advantage of users.

Still, some say it’s not much different from the ebbs and flows of the stock market.

“Even though we are currently experiencing a bear market, historically Bitcoin is still on the rise,” Mesidor said. “It’s a currency that nobody paid attention to and now it’s around $20,000.”

This means that different currencies can lose their value or skyrocket in one day. People can lose money, or potentially owe more on their crypto loans, in an instant.

Another risk for those operating in the crypto space is falling prey to scammers, who have taken advantage of a decentralized market plagued by a growing number of potentially uneducated newcomers.

According to the Federal Trade Commission, reported losses from crypto fraud in 2021 were nearly sixty times greater than losses in 2018. Without a third party to report fraud or suspicious activity, or reverse payments, more than 46,000 people lost money since the beginning of 2021 due to crypto scammers.

An “alternative financial system“

A Pew Research Center report found that Blacks, Asians, and Hispanics are more likely to say they have invested in, traded, or used a cryptocurrency like Bitcoin or Ether.

“People of color sometimes have difficulty getting a bank loan or getting some kind of government assistance or a way to start their business and they’re turned down,” said cryptocurrency enthusiast Steven Bumbera. “Crypto don’t care.”

Cleve Mesidor, executive director of the Blockchain Foundation, said people of color use crypto as “an alternative financial system to exploit” indiscriminately.

Enthusiasts argue that the benefits of managing money on blockchain technology outweigh the risks for many people of color, and they stand by it.

When using crypto, it costs almost nothing and takes almost no time to transfer money to anyone in the world at any time, although it depends on the type of crypto.

For crypto-backed loans, borrowers can receive money from a money changer or lender without having to worry about racial discrimination.

“If you’re on-chain and you have a wallet address, you’re a wallet address — that’s it,” Bumbera said. “Crypto doesn’t care about color, race, sexual orientation.”

Enthusiasts like Bumbera say they love that anyone with a smartphone can access cryptocurrency, without the red tape of banks or government institutions where it takes days and costs fees or interest rates. interest in doing the same.

They also say that crypto can be used to fund businesses and organizations directly without the donations being penalized by a third party to transfer the money.

However, for the wave of people of color working in the market, Williams says this new financial frontier will inevitably come with risks and challenges.

“Crypto is not a competitor to traditional banking, but a complement,” Williams said. “There will always be a need for traditional banking services, but crypto, in moderation, can provide opportunities for wealth creation and opportunities to develop new services – such as remittance services – that can better meet to the needs of the black community.”