The information source is in Appendix 1 below. Above the appendix is one person’s summarization of the source’s information.

Q1 | What are cryptocurrencies?

A cryptocurrency is a form of digital money; it is a decentralized payment system that does not rely on banks. It is a different way of exchanging goods and services. Without a middleman, it costs less than traditional banking systems. At the same time, each cryptocurrency unit is a digital token collected by people who believe that it will go up in value.

Q2 | What are the practical uses of cryptocurrencies?

The most practical use of cryptocurrency is giving people back their sovereignty and their financial independence. That is especially true for those who live under authoritarian regimes; Bitcoin, for example, gives those people a choice they never had before. That makes cryptocurrencies profoundly useful. Likewise, the benefits are overwhelming to criminals who do not want any government to track their wealth. Those are only a fraction of use cases for cryptocurrencies. The more people use them for various purposes, the more they become valuable.

Q3 | Where do cryptocurrencies get their value?

Cryptocurrencies have value ultimately because people are willing to assign them value. All money is a collective fiction; even the U.S. dollar is a collective fiction. What gives cryptocurrencies value is the same as what gives fiat or paper currency its value. The opinion of a government such as China or an individual such as Elon Musk might make the value of cryptocurrencies change drastically in either direction.

Q4 | What is the biggest problem with cryptocurrencies?

People can not use cryptocurrencies as a unit of account because their value is too volatile. Loans in Bitcoin are not practical as the price of Bitcoin changes drastically by the day. The biggest problem with cryptocurrencies is likely to be people’s exact same problem with any new technology. Cryptocurrencies are still in their earliest days, with a substantial environmental cost associated with a system not scalable compared to a fiat system. Technology diffuses into broader society at a specific rate as misinformation, misunderstanding, and miseducation feed inflated expectations. It’s not intuitive to the everyday person yet.

Q5 | Should the average investor get into cryptocurrencies?

Cryptocurrencies are risky, volatile, and uncertain. They don’t have any fundamental value but pose an environmental disaster. There are so many scams and so much manipulation. Only qualified investors should consider them. However, everyday investors can no longer afford to ignore bitcoin. A small allocation to bitcoin is a wise and prudent approach.

Q6 | Should the average investor get into cryptocurrencies?

See Appendix 1 below.

Q7 | Why are criminals using cryptocurrencies?

See Appendix 1 below.

Q8 | Is the carbon footprint of cryptocurrencies a problem?

See Appendix 1 below.

Q9 | Is Elon Musk’s influence over cryptocurrencies a problem?

See Appendix 1 below.

Q10 | Could governments ban cryptocurrencies?

See Appendix 1 below.

Q11 | Is having a decentralized network a good thing?

See Appendix 1 below.

Appendix 1 The Source Article

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