15 May Cryptocurrency – The global mentality behind the money
Everybody wants to be part of whatever is going on. Whether it’s the latest brand, artist or in today’s society, the latest digital currency. Tron (TRX), Ripple (XRP) and Etherium (ETH) investor, Benjamin Thorpe Barnes “Because of how young and volatile it is, a lot of it is a psychological gamble.”
Cryptocurrencies aren’t like the British pound. Nor is it like an American dollar or nickel. meaning they cannot be handled physically. Instead, they are backed by a network in a restricted database. Also known as digital money, virtual currencies or liquid gold, cryptocurrencies use a ‘peer to peer network’ meaning if you try to send some of your currency to someone else, it will only allow you to send that specific currency of coin to that one person. The virtual currency can be bought or sold safely because it uses Cryptography (encryption) which accepts transactions through a shared public ledger best known as The Blockchain.
The new form of currency has gained such popularity that major companies such as Expedia and PayPal accepting the currency as a payment.
Social media, a global link, unexpectedly plays an important role for investors. Elliot Boles, investor in Verge and Ripple explained: “It’s mind games, I originally invested in Ripple because a guy who had previously made a ton of money with Bitcoin said Ripple would go spike upwards. Everybody was trying to buy it while it was still cheap after seeing this and I genuinely think that because he said this, the coin went up.”
In the late half of 2017, cryptocurrencies, particularly Bitcoin (BTC) became even more popular, after its major spike in worth. After originally selling one coin for six cents, it reached a tremendous peak in late November of 2017, costing $10,831.75 for a single coin, 6 years later. Many people then started to see the possible fast track to a luxe life and then started to invest in prospective coins such as Ripple (XRP) and Verge (XVG.) What many failed to see was the danger and greed behind the wealth. Ukrainian head of cryptocurrency exchange, Pavel Lerner, was kidnapped on the 26th of December 2017 and released him for over $1 million worth of Bitcoin for ransom.
Behind the “quick success, quicker money” idea, Cryptocurrencies also have a dark side, mentally and statistically, they rise and fall depending on many factors, resulting in the investment being an ultimate gamble. The beginning of 2018 was far of a happy new year for many investors when the cryptocurrency market experienced a major drop at the hands of Asia, with the Chinese taking money out for the new year. After recovering from the market taking a small dip during the Christmas period, many people decided to withdraw their money for the Chinese new year to give as gifts. Because China has one of the biggest investment placement when it comes to cryptocurrency, it took an even bigger toll on the market.
While investing in cryptocurrency can see investors making profit, the harsh reality is that what goes up can always go down. The “modern day gamble” is seeing people commit suicide when they don’t make back the money that they decide to trade, which can be down to the pressure of large amounts of money that they are possibly losing,
In late 2017, BitConnect (BCC) was considered to be one of the most talked about virtual currencies. With promises to gain up to 40% return per month, investors flocked towards and it therefore grew quickly. Of course, this was too good to be true. On the 16th of January, Bitconnect announced that the lending and exchange platforms were going to close down but that trading would still continue. As expected, the sent the Crypto world into chaos, and the market into a drop. The Litecoin (LTC) owner, Charlie Lee took tot their Twitter pages to express his feelings, “From the surface, seems like a classic Ponzi scheme.” Investors did not think they would get their money back and understandably the internet went into meltdown.
After finding out the news, a post went up on Reddit, the site where many investors go to communicate with others. Suicide hotlines and support information plastered the feed, with one user saying “I work in healthcare and have seen many a rich person willing to trade all money for health. If your feeling suicidal…seek help.” While Reddit is well-known in the crypto world for users arguing as to which currency is the best, this post is evidence investors understand the severity of the affects of investing and can empathise with each other.
Government officials are trying to get a hold of the situation, particularly with the involvement of the young investors, with the Prime Minster saying in November: “young people and students are rushing into virtual currency trading to earn huge profits in just a short period of time. It is time for the government to take action as it could lead to serious pathological phenomena if left unchecked”
Suicide and cryptocurrency are closely linked in some parts of the world. A study has found a third of workers are investors in South Korea, which may explain why they are the third biggest Bitcoin investors in the world. Cryptocurrency expert, Garrick Hileman spoke on the topic of virtual currency, saying that it is “creating a sort of depression.” In this instance, this is a problem particularly with the South Koreans, he goes on to explain that they are even losing their “motivation to work.”
It is evident in the South Koreans take the crypto-market, with the country ranking in fifth place for the most cryptocurrency popularity. Which would explain why it is taken so seriously. On the 21st of September, a case of cryptocurrency linked suicide of a 30-year old IT worker was reported after he lost almost $10,000 in cryptocurrency. It was later reported on the 2nd of January 2018 that that a young man in his early 20’s had taken his own life due to his depression that was triggered by the large sum of money that he had $18,500 lost while trading cryptocurrencies. What many of us fail to realise is that for many people, the gamble is part of the excitement when investing.
After speaking to a 22 year old South Korean investor who would like to remain anonymous, he discussed the difference between the cryptocurrency pressure in the UK and South Korea. “Dong” moved to London in 2014. He then later invested £500 in Bitcoin and has seen the similarities. “In the UK, people do still get very depressed when the market drops, with any currency. It’s still not as common as it is in the UK though. British people are prioritising the market over their work. While it’s the quite the same in South Korea, suicide is seen a lot with younger investors and I can understand that. It’s a lot of pressure to be under and everybody thought that they would be rich quickly”
Psychiatrist and well known expert in adolescent psychology, Dr. Noh Gyu-shik has explained the Cryptocurrency market as people “seeing relatively small sums of money rising ten to twenty fold to the millions.” He also explained that it is hard for investors to not compare to others because “the winnings are so large” and the new found popularity therefore makes it very hard to ignore what’s going on.
The envy and FOMO (known as fear of missing out) is a common problem seen in the cryptocurrency market, not only in Korea but also in the UK. After speaking to Jack McGlaughlin, an investor who has spent a total of £540 in Verge (XVG), Ripple (XRP), Tron (TRX), Bitcoin (BTC), Etherium (ETH), Po.et (POE), Icon (ICX), Litecoin (LTC) and Stellar (XLM) within the last 4 months has spoken personally on how he has found investing and has related to what Gyu-shik had said prior. “I personally experienced FOMO which is what originally got me into crypto-coins. If you’re investing, you’re taking a gamble. If you’re not, then you’re taking a gamble AND worrying that you’re missing out.”
They have not commented on the situation yet
For those in need, please contact the UK suicide hotline, calling 116 123.
