FUD: What it is and how to steer clear from it
If you are new to the crypto community then you might have come across the word FUD in Reddit, Twitter or Discord conversation thread. If yes, then you would have noticed the passionate exchange of words that takes place with FUD as the core topic. Now, why is FUD such a crucial part of the crypto community discussions?
Long story short, FUD is the slow poison that can slowly suck the life out of the crypto realm. Sounds alarming right? It surely is and that’s why you need to be wary of it. So let’s start with the basics.
What is FUD?
FUD is an abbreviation for ‘Fear, Uncertainty and Doubt’. The term is used to represent information, events, and comments that are aimed to influence anxiety and likewise neurotic responses from the receiver. FUD has slightly different interpretations when it comes to various industries. For instance, it is used as a sales tactic by established brands to discredit new brands that might offer better and improved products. Here legacy brands try to invoke the feeling of familiarity so that the customers stick to them instead of trying the new products.
Now the role played by FUD in the crypto realm is unprecedented and that’s why it is often used to appeal to the biases of the human mind.
How FUD Influences You
There are 3 elements in FUD: Fear, Uncertainty and Doubt. Evolutionaries have characterised every three elements as a strong motivating factor behind the actions of a human being. The fear of the unknown, uncertainty of the future, and doubt regarding the creature or environment that a human encounter has been inherited by the modern humans from the cavemen. And why not? This has what kept the beings alive and away from the perilous path.
Since FUD extracts safety centric behaviour from a person, it has long been used as a reliable marketing and sales tactic. The same practices have become a part of the adolescent crypto industry, used by individuals within and outside the industry for their benefit. Here’s how FUD is weaponized in the crypto world.
FUD in the Crypto Industry
FUD in the crypto industry works at multiple levels. Since cryptocurrencies offer the means to establish a transaction medium without the influence of governments and legacy financial banks, the currencies have faced the scrutiny of these institutions since the start. You must have noticed the following
- Cryptocurrencies are labelled as an elaborate Ponzi scheme.
- The tech behind crypto is questioned regarding its reliability.
- Often individuals discussing cryptocurrencies are fed the idea that the industry is a bubble that will burst within a few days.
And a lot more. Interestingly, this all occurs while millions of dollars are being invested in the crypto industry. And every day the crypto-blockchain community comes up with commendable industry-disrupting tech that can change the way things have worked.
A point to note here is that both blockchain and cryptocurrencies are relatively new tech, and this unfamiliarity is exploited by crypto naysayers to align individuals and communities to their ideology. Often comments promoting FUD lack elaborate and substantial backing and this is what you need to look for. More on this in the next section.
Also, FUD is just not used by institutions to deter people from taking part in the crypto community. The tactic is well used in the crypto market to exploit the volatility of cryptocurrencies. Since cryptos are extremely volatile assets, misinformation is often targeted in the market to maximise profits while crypto trading. This includes deliberately accelerating the growth of one crypto, cashing out the gains and then letting the asset crash once the steam cools down.
But it does not mean that you can’t do anything to save yourself.
Ways to Protect Yourself From FUD
I have often said this and I will say it again here: A thorough research is a bare minimum that you can do while investing in cryptocurrencies or interacting with any crypto-related news. You can even enforce this practice in your daily decisions to form a well-informed decision. Thorough research consists of the following:
- Analysing the source of the information and ascertaining the credibility of the source
- Checking about the genuine information on the website, newsletter, or any other media platform, of the company whose product is under question.
- Reading and thoroughly analyzing articles that discuss the happening to get an overall view of what might be the truth.
- Delay forming a decision if you are not content with the information you find on the internet. Decisions made with shallow and superficial information are counterproductive to the process.
And that’s it. Once you do all this, you then understand if the information is credible or not. Also, if the information is credible then by analysing articles with opposing viewpoints you can understand the pros and cons of the new development. This protects you from making emotionally charged decisions in the spur of the moment.
While FUD is regularly criticized in the crypto market, it still has a few undeniable Merritts. FUD offers crypto enthusiasts an opportunity to question their decisions. The Crypto industry has its share of nefarious characters that come up with scam cryptocurrencies, DeFi projects and exchanges. At points like these when you are required to commit your funds to an unknown party, FUD can play the role of a crucial checkpoint.
You should channelise fear, uncertainty and doubt as a motivating factor to do in-depth research regarding the product and company in question. The age of the internet, although has revolutionized the means of information exchange, has also made the spread of disinformation easier that often leading to devastating results. You should also make sure that whatever information you share is backed by credible sources and you have not turned into a source of market frenzy.