About a year ago, I got an email from a member of our church who wanted to know if the ministry accepted cryptocurrency donations. I was intrigued by the request, so I began doing some research and paying careful attention to what seemed to be the latest “thing.” Not long after receiving that inquiry, it was announced that Staples Center was changing its name to Crypto.com. Then, I began seeing commercials featuring celebrities touting the advantages and potential benefits of investing in cryptocurrencies of different sorts. Most recently, an entire edition of the Harvard Business Review was dedicated to an exploration of Web 3.0 (the latest iteration of the internet), which reportedly will be based entirely on the idea of cryptocurrency and blockchain, the technology on which it is based. It seemed to me that crypto was everywhere.

Before we go further, I suppose I should tell you what cryptocurrency is—just in case someone reading does not know. Cryptocurrency is digital or virtual money. It is referred to as crypto because it uses encryption, a technology that protects sensitive information being transmitted online by scrambling the data into a code. The idea behind it is that instead of using paper based financial instruments, people can do business with each other privately without the participation of banks, governments or any other third parties. The oldest cryptocurrency is called Bitcoin, but there are many others.

To be honest, I never quite understood the rage nor the excitement concerning the phenomenon, primarily because in graduate school I learned that every currency has to be backed by something. Money is a means of exchange (you can use it get stuff) and a store of value (you can use it to keep stuff). But it is only as good as what’s behind it. Until 1971, the value of the American dollar was backed by a fixed quantity of gold ($35 per ounce, in fact). America is now considered so powerful and stable, that the dollar has the implicit backing of the federal government. The point is that a dollar would not be worth anything, could not be used to get anything, and would not be able to store anything if there was nothing behind it. The problem that I have with cryptocurrency is that I do not understand what is behind many of them.

As a result, the value of any particular cryptocurrency can fluctuate wildly. This inherent instability is hilariously depicted in a Turbo Tax commercial that you can watch here. It’s about a man who is a millionaire one minute and then not a millionaire the next. Well that’s the problem with crypto—no one really knows what’s behind it (if anything) so the value keeps changing. Get this: over the past decade, more than 2000 cryptocurrencies have failed! I suspect cryptocurrency is more hype than anything else. Many years ago, I came across what they call the Gartner Hype Cycle. Here it is;

Basically it says that when any new technology emerges (and this goes for ideas and products as well) everybody hypes it up, and as a result it gains enormous visibility and popularity. Then it falls, gradually gets better, and if the fundamentals behind it are strong, it will eventually stabilize and then normalize. Otherwise, it’s just a fad. Unfortunately, many of these currencies are just a fad. Most people see it as opportunity to get rich quick, and simply do not understand what they are getting into. I suspect that Warren Buffet may be right, who called cryptocurrency “rat poison squared.” LOL

After conducting my research, I politely declined the cryptocurrency donation request that I had received . I told the person who offered it that while I sincerely appreciated his generosity, I could not accept it because I did not understand how it worked, nor how to square its’ value with fundamental monetary and economic principles. But I also assured him that our ministry would gladly accept cash, checks, or debit cards, stocks or real estate. LOL. I UNDERSTAND that stuff!

That experience reminded me of how easy it is to get caught up in fads unless you are protected by an awareness and understanding of the fundamentals.

Fads are fast. Fundamentals are slows.

Fads are sexy. Fundamental are boring.

Fads come and go. Fundamentals stick around.

Fads overpromise and underdeliver. Fundamentals underpromise and overdeliver.

God wants us to build our lives on fundamentals. When you understand the fundamentals you are aware of and understand the basic rules, principles, and laws that undergird something. To know the fundamentals means that I know why something works and how it works—and understand it so well that I can explain it to a child. Building our finances, our families, and our faith on the fundamentals is the key to maturity. According to Ephesians 4;14, once we are mature,

…We won’t be tossed and blown about by every wind of new teaching. We will not be influenced when people try to trick us with lies so clever they sound like the truth.

There will always be somebody or something trying to blow us away.

Question: What fads have you uncritically or unconsciously adopted?

Get rich schemes, lose weight tricks, and find your soul mate shenanigans abound.

PT Barnum used to say a “sucker is born every minute.”

But you don’t have to be one of them.