Problems

Money Laundering

As with all things, there are also downsides to blockchain and defi (decentralised finance). One of them is a pretty big one. Criminals can turn the money that they have earned by selling drugs into legal and clean money. Crypto makes it a lot easier for them to store and launder their money. It is still pretty hard for them to put money on their cryptocurrency wallet anonymously because most of it still goes through banks first. If there are no banks anymore or you don’t need them anymore to buy crypto, laundering will become easy.

Scammers

A flaw that we have seen in the past few months is that it is really easy for people to make a smart contract (a piece of code that gets executed on the blockchain) and then to make their own token. Some people don’t see this as a flaw because then everyone who wants to start a project can just easily start without being really good at coding as it is easy to "fork" another token. Although that is true there are still a lot of people who use this feature to their own advantage and make a token. then pump it as hard as they can. When the token is at a pretty fair price, they remove the liquidity (backing capital, like gold with euros) which supports the whole token. The makers have the ability to do this and earn a lot of money. Investors will lose their money as there is no capital backing the value of the token. They could also sell their "team tokens" (often used and sold for marketing etc) which will make the price drop dramatically (think like an 80% price drop).

example of a chart that got "rugged"

Demography

Also, a big problem is that most of the crypto investors are white males. Although we think this will change in the future, it isn't good that the market is flooded by white males. Everyone should be able to understand and use the amazing technology behind this. This is a problem that most people don’t see because everything in the crypto world is anonymous. If crypto were to take over the economic system of the world, not only one race and specific audience should accept and use crypto. The whole world should accept cryptocurrencies. So although it doesn’t seem like a problem yet it will be a problem in the future if nothing changes on the ease and accessibility.