Wise consultants have been avoiding the topic of bitcoin all together lately. After watching many currencies plunge from their apogee only to dive again after a short rest, pundits remain quiet as no one seems to know what may happen next in this space. This tumultuous market has brought in an unprecedented influx of new investors to the world of cryptocurrencies. While it may be unwise to make any statements on the future of these offerings veterans of their use find themselves being asked more each day to explain what they are, how they work and what may happen next.
While I find it very rare that people will use the advice given, I do want to share my opinion. The following is my “two satoshis” in regards to the market activity we’ve all observed in the last three months.
I was first introduced to Bitcoin as a form of anonymous payment. The appeal to any tech professional of a currency that could be mined on the same machines we already used at work was undeniable. On first glance it seemed to make perfect sense for those who dealt in the dark corners of the web. Initially it was a commodity whose sole value to me was its anonymity. While less than 5 percent of its overall use had to do with illicit behavior, it was this element that brought it to the attention of the main stream media a few years later as the Silk Road and it’s fame lent a lot of camera time to the currency that made it all work.
While it was immediately obvious that this new offering would change the banking system and the government’s ability to track the movement of funds across borders and from person to person, it wasn’t quite clear yet that people would come to see it as an investment rather than a form of identity cloaking when involved in trade deals.
A large majority of the recent investors have come to the table based on the digital currency’s ability to increase and decrease in value more rapidly than any other secure and stable form of payment. While some call this instability, the strength that is found in the blockchain based technology that runs the bitcoin platform lends a lot of security to everyone’s online wallets.
By creating a public ledger that is managed by the community, this new form of network has come to be known as one of the most secure and trust worthy platforms ever devised. And while some find it hard to trust those with no specific companies or individuals to stand behind them, other new coins are on the ride alongside bitcoin as the consumers are rushing out to choose which method suits them best.
Many who admire the blockchain tech but lack confidence in bitcoin due to the fact that no one really knows who Satoshi Nakamoto is are looking for alternatives. These more informed and skeptical investors find themselves looking to open Source offerings like Ethereum and more traditionally structured companies that are backed by banks and intellectual institutions such as Ripple. These adaptors of consensus ledger technologies are creating a vast landscape of investment opportunities that offer both centralized and decentralized management of holdings.
While the differences may seem subtle to a new user the experts are mindful of using exchanges and holding companies that act as intermediaries as some of the world’s largest groups have fallen victim to corporate espionage and insider fraud. These stories should not be held against bitcoin or any other Digital Coins as all security breaches were proven to have happened outside of the public ledger and were all due to users allowing their private keys to be held by their wallet companies. Leading bitcoin exchanges that were not built on blockchain technology with the same attention to detail as the currencies themselves. This peril ridden past has lead some to avoid bitcoin all together but as the companies handling these transactions become more sophisticated and maintain a reputation of remaining secure, the public will eventually come to see that properly coded systems managed by accountable and intelligent teams can be considered as safe an investment as any other.
The strengths that separate bitcoin from traditional trade systems set cryptocurrencies apart because not only are they a currency but also a payment portal and an investment platform. While some may still be using them for trade, old fashioned greed has drawn this project into an international phenomenon leaving many fearful of missing out on getting in early on a rise that could set new records. The boom recently experienced had analysts worldwide looking on as the value jumped to more than twenty times what it started at that year. Satoshi’s vision was not only thriving, it was showing the world that both the need and the demand for bitcoin was strong enough to carve out a market cap of over $1 billion. While understanding how to use it properly may be complicated to many, using it as an investment platform seems familiar to anyone who has traded currencies or stocks in the past.
Simplified by user-friendly “wallet sites” and simple transaction processing, this complicated technology has had most of the hurdles removed from those wishing to join in. While acquiring coins may be effortless there are many hidden risks to consider before buying in. Depending on how you buy and where you buy from, many of the key benefits of this system such as privacy and encryption fall away unless the sites managing the accounts pay as much attention to security as the systems they are vendors for. Some still ask for very little info while other wallets expect to see photo id before allowing you to trade on their systems. Careful research and trial and error will lead even the most discerning investors to find someone online that can cater to their needs with out asking for more than they are willing to share.
While many people talk about bitcoin, very few of us are actually users on the platform at this point and those that are may simply be bandwagon jumpers watched as the value of a single coin soared and wanted to get on the boat before it was too late. The question most of them are asking today is the same: “Is it too late?”
The answer is NO. The market will rise and fall many more times and depending on when you buy and sell there is still a lot of money to be made by reading the trends, regardless of what name the money has when you spend it. Most users of the platform have no doubt that bitcoin will rise past $20,000 again in our lifetimes (with widespread expectations of it topping out at $40,000 in the end, most experts agree this would be the plateau) but for those of you jumping on board hoping for guaranteed returns based on your arbitrary time scale, you just can’t expect the laws of large numbers to revolve around your agenda like that.
While I doubt the demise of the banks will come about in our lifetime; the biggest windfall that will come to all people as the blockchain becomes more common is the savings it will offer. Removing veiled service fees and returning the endless cost of banking to the consumers who have been robbed one dollar at a time for years. This will also lead to logical systems that provide more access to open source financial assistance programs. Clean-cut lending that will not see race or creed when calculating the value of a mortgage it can extend to you online with lower than prime rates for everyone. Bitcoin’s real value is that in decades it will remove many of the middlemen and money handlers from the world and allow for capitalists to keep more of their wealth while those of us who put community first will be able to share as they see fit. This will in time become the real value of this system which for the time being will exist outside of tax structure for those that keep their holdings private.
By giving people the right to choose where all their money goes and allowing for the most democratic government ever with voting being done by spending in the direction you feel needs to be improved some believe we will find a great future while others feel it will destroy society. For me it remains imaginary money in a video game land that can be used as a shield that protects one’s real identity, nothing more nothing less.
As we currently sit at less than half of the peak value, it does not seem that this is the lowest it will go. Projections based on the relationship between media attention and the rise of value in the past show that by December, it will be at a new high again after hitting the basement around roughly $5,000. Only at $1,000 per coin would I currently add to my wallet for the sake of “buying low” and I doubt it will drop to that price again unless other contenders in the market become the leaders and the founderless coin is abandoned for more secured options.
Some may say they took a large loss since mid-December. I only had winnings in the pot so I’m not worried either way. But however you play this market, spend wisely and only leave in what you can afford to lose. This crypto game can cost you billions. Just ask Winklevoss Capital,
But for the time being my advice can be boiled down to three words:
HODL SPARTANS HODL!