FUD and Crypto: What you need to know

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In the late 1990s and early 2000s, the technology industry was fighting for control of the future—and Microsoft had a reputation for using dirty corporate tricks to win its share.

See: 5 Things You Must Do When Your Savings Hit $50,000

It was accused of filing lawsuits to wipe out competitors and delegitimize rivals by planting fake error codes in their software that ran on Windows. If the allegations that Microsoft faced in several antitrust lawsuits are true, the company was engaged in a particularly hardball version of a classic FUD campaign.

The acronym predates Bill Gates by several decades. It has many connections, and whether you realize it or not, FUD is likely influencing your crypto decisions and your entire financial life.

What is R&D in Slang?

FUD stands for “fear, uncertainty, and doubt,” and it represents the tactic of sowing discord and spreading false information to discredit a person, product, organization, concept, or movement in the public eye.

Whistleblowers often face ugly FUD campaigns when they become a threat to power. The FBI and CIA were notorious for using FUD tactics in the 1960s to discredit perceived enemies. FUD is spread from all angles on all issues that have even the remotest political feel, from climate change to voting rights.

Although the concept is nothing new, the acronym has gained prominence in recent years when it was applied to a new, unknown and widely misunderstood form of digital capital – cryptocurrency.

What Does Fudging Mean in Crypto?

In the early 2010s, when terms like “blockchain”, “mining” and “decentralized currency” were just starting to seep into the public consciousness, much of what the mainstream public knew about cryptocurrency was based on R&D.

Bitcoin as preferred currency for cybercriminals

Many people were first introduced to Bitcoin when the FBI shut down Silk Road and seized 144,000 BTC, which was worth about $28.5 million at the time.

What was true was that Silk Road, a website operating on the dark web, provided a public marketplace for illegal activity, particularly the open buying and selling of illegal drugs. It was also true that bitcoin was the site’s medium of exchange.

The FUD was that bitcoin is completely untraceable and anonymous – it never was – and that criminals developed it to create an underground currency for black market transactions in the dark corners of the internet beyond the reach of law enforcement.

That association with crime stigmatized cryptocurrency with FUD for years to come.

Bitcoin traders are one hack away from ruin

In 2014, hackers attacked Mt. Gox, the world’s largest crypto exchange, and made off with $460 million worth of bitcoins in the largest crypto heist to date.

All of this is true, but the moment served as many people’s first introduction to cryptocurrency, and the scandal created an avalanche of FUD that painted cryptocurrency as an illegitimate, insecure and insecure online toy that could never be considered “real money.”

Like Silk Road, Mt. Gox scandal saddled the industry with FUD-based misinformation and public distrust for years to come.

Government regulators vs online anarchists

Thanks to Mt. Gox and Silk Road, crypto entered the mainstream consciousness mostly on a wave of negative press. In the public imagination, cryptocurrency was a tool of anonymous online anarchists seeking to upend the world’s financial markets and replace global fiat currency with untraceable online alt-money.

At the same time, governments and regulators were unsure how to respond to an unregulated alternative currency. In the US and beyond, officials began talking about regulating and taxing crypto. China launched a series of highly publicized restrictions and actions that eventually led to outright bans.

In reality, most crypto investors wanted and welcomed regulations and oversight, and governments had legitimate concerns about security and consumer protection. But widespread FUD created the image of crypto traders as online pirates targeted for destruction by powerful global forces – not exactly the kind of environment that attracts astute mainstream investors.

Fuding of individual tokens

As tens of thousands of altcoins followed bitcoin to market, crypto FUD transformed from industry-wide macro-level misinformation to targeting individual tokens.

In the late 2010s, “hold your coins and ignore the FUD” became a popular meme among Bitcoin enthusiasts. “Hodl” originated as a misspelling of the word “hold,” but became a crypto-initialism for “hold on for dear life”—resisting the urge to sell an asset even when a public tide rose against it.

These days, Bitcoin faced massive FUD saying it was in a bubble, that it lacked functional utility, that it was unsustainably energy inefficient, and that more useful tokens like ethereum would soon phase it out.

Bitcoin is still the world’s largest cryptocurrency, but it – and thousands of competing altcoins – are still mired in R&D.

A single tweet from Elon Musk, Kim Kardashian or another crypto influencer can stigmatize a token with FUD, as can a negative report from an industry analyst or a report that a major company will start accepting payment in a particular token.

What does FUD mean in sales?

The FUD concept is as old as time, but the acronym itself appeared in the 1970s in marketing, sales and PR literature. Back then, brands weren’t trying to spread FUD – they were trying to counter it by using marketing techniques to change negative consumer perceptions of their products or industries.

Selling is about changing minds, and salespeople can harness the power of R&D to convince potential customers that:

• A competitor’s offer is weaker than it appears.
• A competitor’s finances or management are unstable.
• Their data or personal information may be at risk if they do not purchase a product or service, or if they purchase a competitor’s instead.
• They will lose their only opportunity to buy a product if they don’t buy now.
• They will miss out on a sale that is too good to be true.
• Their quality of life will suffer if they don’t buy a product.
• Buying a product or not buying a product can make them or their families unsafe.
• Prices will soon go up.
• Cheaper options will end up costing them more in the long run.
• A controversial ingredient or component – such as sugar, plastic or gluten – is either worse than or not as bad as they might think, depending on whether they or a competitor are the ones selling it.
• Support for an older product may soon be stopped.
• Competitors are associated with dishonest or unethical suppliers, partners or authorities.
• They may lose their preferred customer status if they do not make a follow-up purchase.

What is R&D in cyber security?

R&D has been part of cyber security since the dawn of the digital age. Every new breach or hack generates FUD-based panic about the security of private data, finances or online identities – and it’s not hard to understand why.

Large institutions with vast resources such as Target, Microsoft, Facebook, Home Depot, JP Morgan Chase and Equifax have all been victims of sophisticated data breaches. Celebrities have been victims of hacks that have led to their most intimate and private photos being distributed online for all to see. Whistleblowers proved that major software companies had worked covertly to give governments or law enforcement officials access to data or devices found in millions of homes.

With all of this in mind, it’s not hard to understand why FUD can make it difficult for cybersecurity experts to convince ordinary people that they can keep them safe.

Cut through FUD

R&D is most associated with crypto, but its effects are present in all areas of the investment and finance world. FUD is based on emotion, and emotional investment is a recipe for disaster.

To cut through FUD, base all investment decisions on strategy and analysis, not social media chatter, news reports, memes or herd mentality.