The Biggest Misconception about Crypto is “It’s just a different currency”

Wesley Kress
7 min readJul 21, 2021


*Disclaimer: The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

The biggest misconception about crypto is it’s just a different currency. No, it’s an advancement in technology. All of our financial systems are archaic & outdated. Also, the current system design and the outdated infrastructure further promotes wealth inequality, in a perpetual cycle. There is no mistake that it continues to get worst especially during crisis. This creates much of the wealth suppression of people, which leads to resource scarcity, falling into Maslow’s lowest hierarchy of needs, contributing to corruption, crime, chaos, social issues, etc. The core problems of society have a root cause.

Outdate Infrastructure of Existing Financial System

ACH — Automated Clearing House transfers take 3–7 days which is incongruent in an instantly connected e-commerce world. Sending money from country to country can take 15–17 days with many middleman taking a cut. We live in an instantly connected digital world, value should be transferred, instantly and inexpensively.

Securities — Cash (unless wire which isn’t instant & typically costs $30–$100 or more), stocks and other securities require settlement which can be 3 days or longer. All solved via blockchain technological infrastructure. Tokenized securities stored on the blockchain which would allow for instant transfer of assets and no need for settlement. This all for negligible cost on the Elrond Network. This will improve the Velocity at which value moves through society, drastically improving efficiency and reducing cost.

Banks — Offer No value to depositors especially with the invention of companies such as Celsius Network if one is not interested in managing their own keys who acts as a transparent & best interest custodian for depositors via blockchain. They are fully collateralized unlike traditional banks. Since Covid 2020 Banks are now required to hold nothing (0%) you can verify via the Federal Reserve site here:… for yourself. While they BASEL III is still fully being implemented it’s still based on fractional system. The only thing we can hope they hold is capital reserves which if you understand anything about “moral hazard” & how it played out during the financial crisis we know they will line their pockets regardless at the destabilization of the entire system, otherwise known as Systemic Risk.

Traditional commercial banks take your money and lend it out but give you nothing. They are making record profits but give it all to shareholders, top management and whatever is left over to their employees. This is not a mistake as the system they created was never sustainable nor in the best interest of the people (depositor). The majority of people especially the poor don’t own assets or the limited “assets” that they do own is cash although with how money printing is continuing one could argue cash a quasi liability now or a quasi asset depending on one’s perspective.

Banks disproportionately hurt the poor people, savers, & wage earners. The poor are the the ones paying the late fees, high interest % etc. trying desperately to make ends meet, the savers are receiving nothing even at times negative rates. Wage earners continue to see their purchasing power eroded away from Central Banks printing to bail out their counterparts they claim is “necessary” to save “jobs”. The Central Banks like the Federal Reserve hurt these people even more via a concept known as the Cantillon Effect. This effect disproportionately hurts low income or wage earners vs. investors. The Central banks & commercial banks are designed to steal from the people implicitly via their design but outside of their intellectual understanding & what appears in an indirect way implicit in its design. There is no mistake that the wealth inequality gaps grew the most after the Financial Crisis & Covid. This is because of the Cantillon Effect essentially stating that not all increases in money supply effect everyone equally, it effects those closest to the money printer positively (i.e. the insiders club the 1%) the politicians who are in bed with the Federal Reserve & the largest lobbying groups, Banks/Financial Institutions.

Monetary Policy — Interest rates are continually suppressed lower as debt of countries sky rockets in a never ending perpetuating cycle that continues to feed on itself. Do you think these countries are going to be able to afford to pay back their insane spending habits or that interest rates are now somehow going to go up when the US never ran a surplus or even raised interest rates in any substantial way post the Financial Crisis up until Covid. Now we have $7+ Trillion of newly created debt that needs servicing. The answer is no, but most are foolish to believe otherwise.

This system further promotes itself by encouraging more & more risk taking. The system is intrinsically leveraged (fractional reserves) which further increases risk due to implicit high leverage (outside the context of fractional reserves). Idiosyncratic risk (industry specific) bleeds into systemic risk (whole system) in which the government (Fiscal Policy) justifies that for the greater good of the economy and keeping jobs for the people they must bail out the high risk takers, with taxpayer money & dilution (Inflation/reduction in purchasing power/money printing).

All of this disproportionally affects the lower income (poor), savers & wage earners more the higher income (rich), asset owners. Not to mention this further promotes higher risk taking (moral hazard) as they only reap the rewards and are bailed out every time it blows up. This concept is best understood as having no skin in the game. Some evidence can be seen based on the ever increasing inequality gap, that always has its biggest increases during crisis events. The largest change of wealth inequality just took place during the Covid 2020 pandemic and the last prior jump was the Financial Crisis 2008/09.

The Blockchain Crypto solves these issues by allowing for a different system model. One that is not levered and promotes deflation (fixed coins) which is naturally wealth encouraging (deflation & stabilizing fully collateralized for now). Also, overtime as non-collateralized loans are needed the peer to peer risk sharing model helps to spread risk instead of concentrate it such as our “too big to fail” financial institutions where the top 6 own 68% of all banking assets in the world. Also, because it isn’t based on fractional reserves the one of the primary justifications for the creation of the Federal Reserve was because of runs on banks. It is not necessary as that would never be a problem.

The Existing system debt encouraging (inflation & risk promoting, destabilizing) which is why the US is printing so much money they are essentially trying to default without defaulting. Also, known as a “soft default”. The one thing that is good to have in inflationary cycles is debt this promotes poor financial conditions & environment for those intelligent enough to understand this to have a significant advantage. The debt is fixed and yet the currency is losing its value it’s cheaper to pay off. Now you know why central banks & countries are printing endless money, they are doing what is considered a “soft default” because they have too much debt that can’t be paid off. They are essentially passing this cost onto the poor, savers, & wage earners.

Blockchain promotes transparency (open ledger) of the financial system which most people don’t realize that the shadow banking system (off balance sheet items) or other highly levered derivatives are a big reason why so much risk is taken that destabilizes the system and needs continual bailouts due to economic collapses from moral hazard. Our existing system is opaque and littered with catalysts for massive systemic risk.

The Blockchain will allow one to have the opportunity to own and monetize their own data. They can choose what to do with their data rather than FB, Twitter, Apple, Instagram stealing it and making money without compensating you.

Blockchain allows for shift in how business models are carried out that can be changed from a (pyramid type scheme) that sucks all the value to the top to one in which is (more circular). If the community is providing value everyone who participates in the community (ie hold tokens) benefits from an increase in wealth not just from utility or benefit of product or service. This is possible due to the properties of operational leverage that are implicit within the business models via the blockchain & if you have business models who genuinely care about creating a more equitable share of this value like @CelsiusNetwork & @ElrondNetwork these standards will require other models to do the same or lose out business or network effects long term.

Choose Wisely where you put your money. Money = Time & Energy.

Disclosure: I am/we are long EGLD-USD, CEL-USD, MATIC-USD.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose cryptocurrency is mentioned in this article.



Wesley Kress

MBA in finance & accounting with a specialty in Investments. Ex-Banking Professor. 17+ Years Financial Markets experience. Independent Financial Analyst.