Bitcoin Is a Delusion That Could Conquer the World
Web Publication: The Atlantic, by Derek Thompson
I’m sure most people have caught a glimpse of Bitcoin news in the past few weeks if they’re watching the news at all. There’s a lot of confusion about what is Bitcoin. This article addresses that as best as any others I’ve read. This is as close as you’re going to get to understanding Bitcoin as anyone in securities or finance at this point. Maybe some Stanford grads could do a little better, maybe not.
When you get right down to it, our hands-on understanding of money is not even about that green paper we used to shove into our pocket. We don’t use that much more. Money is numbers that show up on paper; a phone bill, an online mortgage statement or a detail from your 401k. Certainly it’s the credit card statement. Money is now primarily a set of electronic ledgers as they are all generated out of a computer. So maybe you can understand Bitcoin (and other cryptocurrencies) a little easier than you thought. It’s just another electronic ledger.
My recommendation: Buy. Even now that it’s at a new high. I agree with the notion focused on in the article that it is or will become a reserve store of value rather than a day to day currency. Some people have already made out like bandits, but it’s not too late. Just don’t spend all your grocery money. The best equivalent I can think of is that it’s like the proverbial $40 invested in Coke at its inception. It’s now estimated to be worth $9.8 million. Take that with a grain of salt, but you get the picture. The point here is that even if you take a few weeks of bar money and if you’re willing to wait a few years, yes, you may lose that initial investment or else you may be taking a trip to someplace a lot better than the bar. Better yet, maybe the down-payment on a car or house.
Cryptocurrency has gone through chapters. Chapter one was all about geeks and cyber-obscurity. Chapter two was niche-geek investors. Chapter three was what the article refers to when Bitcoin received its first nod of legitimacy from the government. Chapter four just started this week as Bitcoin was approved for futures contracts, another esoteric investment vehicle. Chapter five and six will occur when crypto-coins are integrated into mainstream retirement funds and or when other countries start to index their currency to Bitcoin or other cryptos. As high as Bitcoin is now, those events have the potential to turn it into the future version of the $40 Coke investment.
Do not invest what you cannot afford lose, but you cannot afford to not invest anything.