Over the past few years, the long and winding road that is investing in Bitcoin has pushed many to see the cryptocurrency, and many others in the field it popularized, as the future of commerce: A decentralized, blockchain backed currency with the power to revolutionize the world economy. However, valleys that often match or exceed Bitcoin’s peaks are what have pushed just as many people to highlight the currency’s glaring drawbacks: intangibility, lack of security, volatility, and of course, the fact that ninety-eight percent of the population can’t wrap their heads around what the hell it even is. But with all of these drawbacks, I can’t help but feel that crypto-critics are overlooking a key danger that the alternative currency trend offers: the threat to private investment in tech firms.
The role of private investment in technological advancement over the past 40 or so years is an oft-overlooked one. Private investment plays a huge role in providing capital for tech companies, both large and small, to make sweeping technological innovations. It’s what allowed Tesla to bring out its first products when private investment began to run dry. It’s what kept Apple running through the early 2000s. If not for private investment we might not have widespread electric vehicles. We might not have the iPhone.
The threat that cryptos like Bitcoin poses to private investment in the tech sector is an obvious one, which is what makes the fact that so few have brought it up a surprise. Bitcoin, and cryptocurrency in general, seemingly targets the same type of investor that tech firms do, but where investing in, say, Apple, Amazon, or Tesla directly contributes to the innovational efforts and operations of each of those respective companies, investing in Bitcoin only benefits the investor. This paired with the fact that there is finite money in the world and crypto investment is skyrocketing poses a real threat to the tech sector, and to the nature of investing in general.
Part of what makes investing-in tech specifically- so great is that, depending on the company of course, your’e not just benefiting yourself when you invest in a company. Your’e helping that company in its daily operations, and, if it’s a tech company, your investment, no matter how small, is helping to spur on technological innovation. But when you invest in Bitcoin, this isn’t the case, your’e just benefiting (or destroying, it depends on the day of the week, really) yourself financially.
It’s for this reason that I don’t like to think of investing in Bitcoin or cryptocurrencies as alternatives to investing in companies, the way many people do. Instead, it should be looked at as buying a currency, but one that has no hope of helping your country, or any other for that matter, buying cryptocurrency will only help or damage yourself, and that’s the real danger it poses.