https://pixabay.com/vectors/man-cash-money-dollars-currency-5551453/
The Wealth Effect.
In behavioral economics, the wealth effect states that as the value of people's assets rise, people spend more (often incurring more debt), because they feel more financially secure.
Recently I've read a few posts about how crypto has changed people's lives for the better. And I'm one of those people. And one reason is the price of crypto increasing, making people more wealthy. But with all this wealth creation, there are going to be sharks in the water that feed on all these fattening fish.
Bitcoin at $1,000,000?
The bottom line: lenders, merchants and scammers want your crypto. They know crypto is a multidecadal trend to the upside. Bitcoin has the potential to reach $100,000 to $1,000,000 over the next 30 years. And as far as they're concerned, your crypto is better in their pocket than in yours, because they know how to use it better.
Ways to take your crypto.
They will use this wealth effect against you by convincing you "it’s in your benefit.” Let’s go through some of them:
- Fiat loans secured with crypto (collateral) - "Why wait for tomorrow when you can spend your money today."
- Discounts if you use crypto instead of fiat - "Why use fiat, when you can use crypto at half the price."
- Credit and Debit cards that are linked to crypto custody wallets - "Spend your crypto today, its easy!"
- Leveraging crypto trades - "Be a Pro with 100x more profit on your trades!"
- People promising you to make money with your crypto (often scams) - "Send me 10 LTC, and get 20 back!"
- Buying tokenized worthless items (this is new) - "Own part of this priceless work of art...Elon Musk does!"
- And the coup de gras; new worthless crypto platforms to invest in (remember 2017/18?). This also includes defi and other dapps - "Be part of the future, token sale happening this week only."
In Conclusion.
Credit/Debit cards, tokenized items, dapps, useful protocols, etc...are all great developments necessary to bring crypto to the masses. But just like anything, this technology's wealth creation is bittersweet, and there are many people that want your crypto and will give you little to nothing in return.
Stay frosty people. Thanks for reading.
Good point!
Thank you. I'm hoping it helps some people as we all start accumulating more wealth.
My favorite. I have almost fallen for a similar scam in the old days of my existence in crypto.
Posted Using LeoFinance Beta
Yeah, I seen a lot of these scams 2 years ago. :)
Congratulations @fijimermaid! You have completed the following achievement on the Hive blockchain and have been rewarded with new badge(s) :
You can view your badges on your board and compare yourself to others in the Ranking
If you no longer want to receive notifications, reply to this comment with the word
STOPDo not miss the last post from @hivebuzz: