You have to appreciate the title. Pretty accurate? Before I say anything, I will have to tell you – “I am NOT against Bitcoin or any other cryptocurrency/technology”. Do I have some, well, it doesn’t matter. A lot of people made a lot of money and that’s the bottom line. I will just state couple of facts and let you think about it.
Everywhere you go, everyone is talking about Bitcoin and cryptocurrency. Literally, you go to Starbucks and at least one person will be talking about it. It reminds me of the boom of Pokemon GO. Do you remember this one? Yeah right…
But let’s get to the bottom of it. Why is everyone so excited about Bitcoin? Well, I have to tell you that it showed growth like nothing else before. Simply growth of the price. I’ve never seen anything like this before and according to a lot of big names such as NY Times, there wasn’t anything like this before. Strictly in terms of numbers. Ask yourself, what the Bitcoin is. Many are arguing is the new gold. I would argue that this is impossible because if the electricity dies, it’s much more likely to be able to pay with gold, rather than “something that I have online and it’s saved on my computer, but I have to wait for the electricity to come back, to give it some value”.
Now, why do I need a Bitcoin? Virtual money? PayPal incorporated this long time ago. I got a payment from a client a year ago and I am still paying some business expenses with the money I got via PayPal, without taking a single dollar out. Isn’t that crypto money? What’s the difference?
A bubble is an economic cycle characterized by rapid escalation of asset prices followed by a contraction. It is created by a surge in asset prices unwarranted by the fundamentals of the asset and driven by exuberant market behavior. When no more investors are willing to buy at the elevated price, a massive selloff occurs, causing the bubble to deflate.
In other words – IF I had $10M worth of Bitcoin, and I try to sell it, I might cause the bubble to burst.
But before we get to this – How Easy is to sell the Bitcoin. Well I did an experiment and it turns out not that easy at all! I can imagine it becomes much more difficult if you try to sell a bigger amount – let’s say 4-5 bitcoins. There are many fees and catches that nobody mentioned when the Bitcoin first came out. It was advertised as an easy and fee-free currency that everyone is going to use – bullshit.
Who started using Bitcoin first?
Before we got to a point where everyone is talking about it and ready to accept it, something that not a lot of people know is that the HACKERS made the currency popular. Have you ever heard of Ransomware? It’s a software that takes your computer data, locks it and in order to get access to your computer and encrypted data again, you are required to pay ransom to the hackers. The biggest target – Hospitals, Law Firms and Banks. How did they got paid? You got it! BITCOIN!
That kind of makes me thing that having absolutely anonymous currency is not such a good idea, especially in parts of the world where people are being kidnapped on daily basis. People are complaining about the government watching everything all the time, but I think that this is a good thing. I would much rather the government and the FBI to be able to track where all the money are going, than paying ransom to some criminals who stole my data or worse.
Yeah everyone is looking for deductions and way to get around, but IRS has been a tool to detect a lot of illegal activity for years. Anonymous currencies would give a huge flexibility to the narco cartels to get money in and out of the country un-tracked. For me this is another red flag that the government shouldn’t/won’t let that happen.
I get comments on technology and crypto from people who didn’t write a single line of code. You have to be able to understand how it works to truly understand the potential pros and cons. Don’t invest blindly riding the wave. I am not saying that crypto is a bad thing, I am just saying that many people don’t have a clue what is the whole noise about. It kind of repeats a pattern that rings a bell in my head.