Digital fever: what is cryptocurrency and why is it important to know about it

“What can clients and beauty salon masters talk about? You won’t believe about cryptocurrency! — 34-year-old Irina does not hide her surprise. — But last fall we argued about the benefits and harms of shellac. Today I felt as if everyone was leaving by train to a brighter future, and I was standing on the platform in confusion.”

Indeed, a few years ago, the words “bitcoin” and “mining” were considered professional slang for programmers and advanced brokers. Now, even schoolchildren, who hardly have free millions, have joined the games with cryptocurrency.

Why do we believe in the good fairy

Cryptocurrency excitement is often compared to the gold rush in the middle of the 10th century, and bitcoin is called digital gold. “This is a hype, a surge of interest, and an international one at that,” explains Denis Makarhin, a psychologist, business coach, and tutor at the Moscow Business School. “Seven years ago, 000 bitcoins could buy pizza. Bitcoin is currently worth over $8. And many felt that it is more profitable to invest in electronic money than in a deposit or stocks.” The interest of experts is understandable. But why do those who are ignorant of exchange operations violently react to changes in the bitcoin rate?

Cryptocurrency appeared too recently to be able to somehow classify people who are passionate about it. Perhaps for some it is a fashion trend. “Among the buyers you can meet the so-called geeks — those who are fond of new high technologies,” says Anna Fenko, a psychologist from the University of Twente, the Netherlands. “It is they who stand in line for a new iPhone, buy Google Glass glasses and install the Smart Home system in their apartments. But among them may be conditional Leni Golubkovs — desperate losers, hoping to improve their financial situation with the help of miraculous bitcoin.

Investment professionals, bankers and other professionals, who are a minority among us, know exactly how this new financial instrument works. “For them, there is nothing supernatural about it. They know economic laws and use them,” explains psychologist, family therapist Maria Dyachkova. “But when people who are far from financial institutions seek to somehow participate in this market, the system of magical thinking works — the same as in the story with vouchers and MMM.” There is only one motive: how to get rich and get out of poverty at once, without doing anything special? Even those who simply discuss crypto-currency involuntarily become participants in gambling action: if such and such could, then one day I can too.

Magical, magical thinking is completely natural for early childhood, when a child believes that his desire to receive a toy will come true by itself (and gifts from Santa Claus support this belief). But when an adult hopes that he, without doing anything, will wake up a millionaire, this is a wake-up call. We can find a perfect example in the fairy tale Cinderella. The poor girl, sorting through millet and serving her sisters and stepmother, did nothing special: she just dressed beautifully and received the “prize” — a prince in love. Moreover, the clothes, the glass shoes, and the carriage are not the fruits of her labor, but the magic of the good fairy. The logic of Cinderella is simple: everything will happen somehow by itself, regardless of me — someone who knows (a kind of Fairy Godmother) will make everyone who has invested in cryptocurrency rich.

Who should not take risks

“In any crisis situation, we are driven by strong emotions: fear, despair and hope. The fear of losing financial well-being pushes many people to take very risky actions,” says Anna Fenko. In a state of crisis it is difficult to think rationally. For many, cryptocurrency is a saving straw. In the 90s of the last century, many took risks by investing in dubious enterprises, but it is a deep delusion to consider them fools or naive people. “At that time, sociological studies of the MMM phenomenon were carried out. Observers recorded conversations in queues for the purchase and sale of shares, Anna Fenko continues. “The vast majority were aware that they were participating in a scam, but hoped to deceive other participants.”

Sometimes players of a virtual exchange become out of love for excitement. But not everyone is able to painlessly relate to financial losses. In Western practice, the risk tolerance of the stock market investor is necessarily assessed: the broker offers the client to pass a special test.

“If I am conservative by psychotype, then I need a calm tool for generating income,” explains Denis Makarhin. “I will sleep soundly myself and let my broker sleep.” Profitability will be low, but the risk is minimal. If I have a high risk tolerance, I am calm about ups and downs, I am not afraid to lose some amount, the broker offers more risky, but also highly profitable operations.

Cryptocurrency is for those who know how to “take risks calmly”. In the end, you can earn not only as an investor. “Thanks to the hype topic, the infrastructure began to grow, highly paid specialists who understand this appear: brokers, programmers, marketers,” explains Denis Makarhin.

How to find yourself in a new world

But why do some succumb to mass hypnosis called «cryptocurrency», while others do not? Family therapists know the law of homeostasis, according to which the system strives to maintain constancy. “When we (family, society) move to a new stage, the forces of development and the forces of stagnation simultaneously operate in our system,” says Maria Dyachkova. — Some family members say: let’s develop, let’s invest in bitcoins, they are the future. And others answer: “No, we will stick to what is familiar and verified, the way our ancestors lived.”

Stereotypes (caution, fear of taking risks) helped us survive and structure life. “Even if it ruins me, even if I am in deep debt, I will still choose what I know. When the level of self-awareness grows not as a member of the system, but as a subject separated from previous stable habits, then there is an opportunity to try something new, ”concludes Maria Dyachkova.

For every conservative there is always a revolutionary. The first to start working with the blockchain system were programmers. For them, it was a transition to another reality. These are people with a different philosophy and paradigm of life, who believe in high technologies that irreversibly change the world and our understanding of it.

“Changes will inevitably affect everyone, even those who think that the IT revolution will bypass them. Therefore, sooner or later it is worth starting to understand this,” Denis Makarhin is convinced.

Any technology carries for the psyche both risks and threats, as well as chances and opportunities. The question is not whether each of us should invest in cryptocurrency. It is wider — how can we find ourselves in this new, ever-changing world.