From meme to millions: Is crypto still just hype?
Marie-Catherine (left), Eva (centre), Claire (right)
One day, you buy two pizzas, and the next day, you find out you paid billions for them. Crypto is seen as a tool to make or lose money more quickly than you have ever witnessed. But will it ever be more, or will it stay a space only for the “crypto bros”?
Did you know the very first real-world purchase with Bitcoin was two pizzas? On 22 May 2010, Laszlo Hanyecz, a Florida software engineer, paid 10,000 BTC for two large Papa John’s pizzas, worth only about $41 at the time. Today, those same coins would be valued at well over $1bn. The occasion is now celebrated every year as Bitcoin Pizza Day.
That simple pizza order marked a turning point. Bitcoin went from being a mysterious piece of digital code to something people could actually use in real life. In 2010, a single Bitcoin was worth between $0.10 and $0.30. Today, the price regularly exceeds $110,000, driven by massive interest and the entry of big players, including major financial institutions, corporations, and investors, into the market.
So, what is cryptocurrency? At its core, it's digital money designed to be safe and secure thanks to special coding called cryptography. Every time someone makes a transaction, such as sending Bitcoin, it is recorded on something called a blockchain. Think of it like a public digital notebook shared across thousands of computers, rather than being controlled by banks or governments. Bitcoin, which launched in 2009, was the first of its kind. Since then, crypto has grown into a world of peer-to-peer payments, smart contracts, meme coins and decentralised finance.
The million-Bitcoin question
So, here’s the million-Bitcoin question: how has cryptocurrency evolved over time? When Bitcoin was officially introduced to the virtual market in 2009, it quickly gained popularity and significance. Its blockchain system enabled it to distinguish itself from other currencies on the market. In fact, Bitcoin didn’t just join the party; it basically started it, becoming the OG that put crypto on the global map. Fast forward to 2011, and so-called altcoins considered rivals to Bitcoin began to emerge, such as Namecoin and Litecoin. It was not until 2013 that Bitcoin cracked the $1,000 mark. Fun fact: the first Bitcoin ATM was installed in Vancouver, Canada, the same year.
The launch of Bitcoin futures trading in 2017 caused a rapid increase in activity. By February 2021, Bitcoin’s value exceeded a jaw-dropping $50,000 for the first time. Remarkably, two months later, the total market capitalisation of Bitcoin and other cryptocurrencies surpassed $2trn. Not bad for a digital coin that once bought a couple of pizzas.
Like anything bold and new, revolutionary financial technology, such as cryptocurrency, brings both significant opportunities and substantial risks.
Like anything bold and new, revolutionary financial technology, such as cryptocurrency, brings both significant opportunities and substantial risks. The fact that there are no intermediaries enables faster peer-to-peer transactions, cutting fees paid to third parties from the equation. Automating and speeding up processes increases efficiency, which is vital in sectors such as finance, where quick and secure transactions are crucial.
In places where traditional banking doesn’t work so well, whether it’s because of insufficient infrastructure or shaky economies, crypto can be a game-changer. Whether through a basic smartphone or a simple internet connection, people can send, receive and store money securely, bypassing traditional financial barriers without interference from a central authority.
Take Luxembourg, for example. They’re making moves with their fancy new Blockchain Law IV by introducing a control agent who can track who owns what in the blockchain, without needing to hold the assets themselves. It’s smart, it’s secure and it’s helping make Luxembourg a fintech hotspot.
Notable downsides
That said, there are notable downsides. Cryptocurrency lacks legal protections and a central authority. If you mess up a transaction, or if someone hacks your wallet, there’s no “undo” button. No customer support hotline. Just think of James Howells, a man who claims to have lost a hard drive containing 8,000 bitcoins in 2013, which would be worth around $822m.
Bitcoin was meant to buy everything from apples to mansions, and while we’re not quite there yet, crypto’s definitely growing up. These days, you can pay employees, shop online or even buy a car with it (yes, really). It’s also shaking up finance by letting people borrow and lend without middlemen in suits. Not all crypto is accepted everywhere; value and volatility still matter. And in Luxembourg? In-store crypto payments are still relatively rare, but online shopping is starting to catch on. Baby steps… but in blockchain shoes.
However, crypto isn’t just about cool tech and quick payments; it also has a significant environmental footprint, which raises concerns about carbon emissions and the broader environmental impact of this new fintech. And let’s be real: using blockchain tech isn’t always easy. Simpler user interfaces would make the technology more accessible and essential for broader adoption. If blockchain remains too complicated, its use will likely be limited to a small group of experts.
One thing that can’t be overlooked is that blockchain technology is quite expensive to implement. Building a secure blockchain wallet, like an Anesec Investment Club Wallet, could cost anywhere between $125,000 and $200,000. And hiring the right people? Even harder, as blockchain experts aren’t easy to find, and they don’t come cheaply. So yeah, it’s innovative, but not without some serious startup costs.
Challenges to conventional banking systems
Cryptocurrencies are still far from fully replacing traditional government-issued currencies, but they undeniably pose significant challenges to conventional banking systems. One of their most notable advantages is the ability to facilitate high-speed transactions with minimal fees, something traditional international payment systems often can‘t keep up with. They are putting increasing pressure on banks, forcing them to reevaluate their service models and adapt in order to remain competitive. While many traditional banks continue to rely on outdated infrastructure and in-person processes, cryptocurrencies operate entirely on digital platforms. This aligns well with the expectations of younger, tech-savvy generations who prioritise convenience, speed and accessibility. If banks fail to modernise and embrace innovation, they risk losing relevance in an increasingly digital financial ecosystem.
Bitcoin is comparable to gold: both are limited in supply, not issued by governments and are seen as a protection against inflation or unstable currencies. While gold is physical, heavy and not easily transferable, Bitcoin is purely digital, borderless, and easy to divide and send, which makes crypto very attractive in today's world.
The perspective of younger investors
But why are crypto and stocks two very different types of investments? Well, imagine stocks as the reliable grown-up; they represent real ownership in actual companies, and regulators closely monitor them to keep things fair. Now, crypto? That’s the wild child of the financial world. Crypto is digital, often unregulated and highly volatile; however, some countries, such as Luxembourg, have already adapted their laws and regulations to support blockchain-based currencies.
Crypto appeals to younger investors because it’s accessible 24/7, easy to get into with just a few bucks and offers the potential for fast, big gains. However, it’s much riskier than stocks, with fewer protections and more price swings. So yeah, it’s exciting, but make sure you’ve got your seatbelt (AKA, research and a plan) on before jumping in. Theo Delvaux from the Anesec Investment Club shares his critical view on crypto: “No. I don't see them as an investment, but rather as a speculation because cryptocurrencies have no intrinsic value in my view. There are no fundamentals that justify its price, especially for meme coins like Dogecoin.”
But why do younger people often prefer to invest in crypto rather than in stocks? Young people are moving away from traditional investing in stocks and bonds because they no longer think that’s where the big gains are. Instead, they’re exploring the fast-paced crypto world, where they are free from any intermediaries, putting a significant proportion of their money into these riskier areas compared to older generations. Maxi Ullrich from the Anesec Investment Club confirms this by stating, “Yes; high risk/high reward,” when asked whether and why he invests in crypto.
For many, it has also become a trend, something that many young people are jumping into simply because everyone else is doing it. While rules and regulations can make things more complicated, that hasn’t stopped them; they’re chasing fresh opportunities and shaping a different way of building wealth, one blockchain at a time.
The world of crypto can be a bit mysterious, but one thing is for sure: it offers the chance to make quick gains or to lose everything at any time of day or night. That excitement is what attracts so many younger folks; it is the thrill and energy that comes with it. Even though crypto has been a hot topic for a while now, it still feels like it has some growing up to do. Right now, it is mostly used for trading or occasionally buying things, but it has not fully settled into the role of a currency just yet. Instead, it seems to be more of an investment tool, something people are exploring for fun or to diversify their portfolios.
Written by Eva Brakonier, Claire Pegel, and Marie-Catherine Motingea
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