A few days ago, I was listening to episode 597 of the Bad Crypto Podcast and it was rather insightful listening to how Joel Comm and his co-host Travis Wright randomly picked cryptocurrencies from listings on CoinGecko and evaluated them on the spot using a variety of techniques and standards.

With just a cursory glance at key data points, they assessed the cryptocurrency’s market cap, years in business, professionalism of the website, underlying business model, blockchain capabilities, leadership team, major engagers, and historic fluctuation. It’s a lot of data, and once combined, can tell a pretty good story about the coin’s past and future.

The last I checked there were 13,660 different coins listed on CoinGecko, and from a newbie’s perspective it’s incredibly challenging to weed through the hype and make sense out of everything that’s taking place.

Before I continue, let me make it clear; nothing in this article is to be taken as financial advice. I am simply stating my observations and experiences. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk and the investment will fluctuate over time, and you may gain or lose money. As with all financial decisions, you should consult a licensed professional.

What’s Different About Crypto?

Cryptocurrency is the next evolution of currency and mediums of exchange in our world. We’ve already progressed from barter systems to tradeable certificates of value, to printed notes, to currency that’s based on the full faith and credit of governments, and to electronic manifestations of these notes and currencies.

What’s different about cryptocurrencies of course is they represent the privatization of currency, and thus they often struggle to compete with traditional government-backed currency in the everyday kinds of commerce. It’s not easy to transition a global or even a nation-state’s economy and commerce from a traditional national or regional currency to cryptocurrency, which has been very apparent in El Salvador.

That’s why cryptocurrencies still only fill a relatively tiny niche. But still only being a tiny niche is because of many more things than just that. They are still too geeky, too complicated, too hackable, too confusing, and too risky for the average person on the street. In short, they’re not user-friendly.

From a usability standpoint, cash is easy to understand. The denominations are clearly printed on the bills, it’s widely accepted, you don’t need a device like a phone or a computer to work with it, and even a third-grader can understand the basic elements of a transaction. But the crypto universe has a long way to go to make its coins and tokens as stupidly simple as cash.

For example, most first-time users have conventional payment systems in mind when making a transaction, similar to online banking. They instantly assume transactions have fixed fees, are reversible, and can easily be canceled, none of which are true in reality.

Most are confused about the terminology and the fundamental building blocks of crypto, including blockchain, public-key cryptography, recovery mechanisms, how to perform a transaction, and even the role of a wallet.

So far, crypto has managed to carve out a niche as an alternative investment asset. They can also be used for metaverse-based commerce (e.g., for NFTs), smart contracts, and DeFi engagement. Some retailers in the physical world are willing to accept them, but usually, as a way to enhance their brand or to entice a specific customer demographic. Outside of the metaverse, our economies still need both options.