Oh my God! Cryptocurrencies, may be is the hottest thing on the market right now.
A meteoric rise of over 400% in 2017!
That weird currency that we only knew about as nearly untraceable, and when we or others, needed to buy illegal goods online – requiring you to set up certain bank accounts to transact with. What trouble and what a poorly thought out system… How inconvenient…
Fast forward to 2017 and BitCoin is no longer unknown – it is making headlines – every day.
As we speak I’ve set up accounts on GDAX, Bittrex, Kraken, CoinSquare, and QuadrigaCX with the intention of nearly fully leveraging, or 1.5-2x leveraging myself to enter the market.
Why would I consider this?
What ever happened to the classical expression:
Be fearful when others are greedy?
-Warren Buffet
As a disclaimer: I’m not saying that this is going to turn out well, but there is reason to madness. And simply following age old paradigms without examination is almost most certainly madness as well.
Bitcoin, and further, cryptocurrencies represent a much larger change than simply an online currency. I don’t care to explain because there are pleny of websites which will aid in your understanding.
Before we start, I ask you, how much do you think the general population knows about cryptocurrencies. Blockchain technology. What about yourself?
Precisely.
For this reason, I believe that there is still a first-movers advantage into cryptocurrencies. One thing is certain. There is a very high likelihood that cryptocurrencies are here to stay in the future. And the general public is still in a state of convenient ignorance about the topic. For the general public, it is not beneficial, nor pressing, to evaluate this too closely at this time.
There will be some form of cryptocurrency, BUT, whether 2017 is too early, that is too early to determine. There very may well be a 1-5 year lull where cryptocurrencies remain depressed as ancillary and supporting services catch up to provide a truly compelling ecosystem.
But you can’t spend cryptos
Sure you can. In the year 2017, in THE VERY FIRST year that Bitcoin exploded on the scene, there already is the ability to use Bitcoin backed VISAs (to spend at you favorite supermarket – bypassing the need to pay taxes on your gains), and the ability to order online Amazon goods (purse.io). (Sure purse.io isn’t used to directly purchase such goods – but we can see it is possible – people are doing it – and therefore market will respond). Point being. Do people seriously expect that an infrastructure for the currency of the future to be built and ready in one year? They certainly don’t understand the implications of cryptocurrencies and what they aim to do.
As people become more educated (or brainwashed), they will see that this is a real phenomenon. Perhaps I am brainwashed, but this is certainly a phenomenon. Whether it’s here to stay, or go, I cannot say.
Psychology
What’s interesting is that people are right. “Yes, cryptocurrencies can’t be spent anywhere (except for the aforementioned). Yes, it’s only digital imprints, etc”.
But they fail to see the positive network effects inherently bred into blood of cryptocurrencies (I’ll generalize to Bitcoin in the future).
It doesn’t matter if it can’t be used. It doesn’t matter if there isn’t any practical use for them
We’ll start by stating the obvious, that fiat currency (paper money, etc), also doesn’t have any intrinsic value.
But on to the next point.
For every thing that Fiat currency can’t do, people are going to THINK that Cryptos can.
Whether this is right or wrong. It doesn’t matter. We are being displayed news lines every day about Bitcoin. The public gets slightly more educated, or misinformed, or sold on the ideas of Cryptos being the new future.
Okay, where is the value then?
The current market capitalization of bitcoin is currently $79 Billion. Do you know what the Market Cap of Netflix is?
The market cap of Netflix, an entertainment company, video streaming service, and content generation service is $77.83B.
So when we make a comparison. $79B certainly sounds like a lot. I would certainly say though, for a global currency, $79 Billion is not… hyperinflated.
We forget to realize that this is a global phenomenon. Investors in China are eyeing Bitcoin. Governments are eyeing Bitcoin. The lay-person is eyeing Bitcoin. I’m not sure you could say the same for Netflix…
Bitcoin is making headlines in every country.
Well I like the fact that equity markets do rely on “actual” people to “actually” be developing the company.
You are not investing in a company. Period.
There is no governing body. There is no board of directors. There are no aimless employees working inefficiently to ensure the company meets specific targets.
One of the beautiful things about cryptocurrencies is that every single dollar in, is a vote for the currency to grow larger and more ingrained in to societies core.
Literally THE ONLY value in Bitcoin is what people put into it. And we’ve seen many instances in history of how quickly positive network effects can change the world, no?
The Technology
Bitcoin is based on blockchain technology, but is not blockchain. Currencies were just one of THE BEST, and quickest areas where blockchain could find it’s roots in
Information on the technology is available everywhere online. I think the technology is good. But I’m with you. It’s not “necessary”.
Sure, chaining transactions and contracts sounds great. Sure it’s the future. Sure it makes sure that we have traceable roots to every transaction. No big deal.
But oh boy, there are a lot of people with an axe to grind (against the bigger brother). And I’m going to be putting “some” of my money with them.
– Thoughts of a Ho, now you know.
Now besides that, what am I gaining and what are some other interesting facts?
- Opportunity
- Never has my understanding of resistance, entry points, support, bid-ask spread, been more solidified. I’d ask you to take a look at GDAX.com and see how it helps your understanding of the financial system and it’s fucntioning. Because of the “open-information” concept of cryptos, these concepts are signficantly more solidified than with traditional markets.
- McAfee will “eat his own dick” if Bitcoin does not takeoff
- I’ve been told by someone who’s thoughts I respect greatly that cryptos are a big deal. He is associated with an individual heavily invested in cryptos.
- Regulatory hurdles may very well kill the short term future of cryptos. Hopefully there will be enough time to hedge and remove oneself as we get closer to these issues becoming real.
- Bitcoin is the gatekeeper to all other cryptos.
