Last week, President Trump tweeted that he is not a fan of Bitcoin. His reasoning was, that Bitcoin has no value, because there is nothing backing it up. I have to wonder then, how he believes the U.S. dollar has value, when nothing backs that up either.
Being in my mid-fifties, I’m at the far edge of the age demographic that accepts Cryptocurrencies as valid forms of value. There are very few of us, when compared to the younger Generations, who accept Digital Money without reservation. There are fewer still, who are older than I, that think of Bitcoin or any other Cryptocurrency, as anything other than a scam.
I understand this. I have an advantage. I’ve been playing with computers since I was 12, and was a member of that first wave of Hackers, who broke copy protections on video games, back in the 80’s. As a programmer, I trust the code, and I understand how the bitcoin encryption works. It took me a couple of years of research, to be convinced of the value, and stability of bitcoin. Most people won’t take that time, wouldn’t know where to look, and wouldn’t understand the technical parts, if they did find the information.
There are a lot of comparisons between bitcoin and the Internet. People in the know, say that bitcoin (and the other Cryptocurrencies) are at a place now, that is comparable to where the Internet was, in 1993. I was on the Internet in 1993, and I think the comparison is accurate. In 1993, about all you could do on the internet, was email friends, and look up text files, if you knew how to use applications like Archie, Jughead, and Veronica. There was no World Wide Web.
Two things allowed the Internet to become what it is today. The web was created, and America Online made computer networks User Friendly. AOL was the Killer Application that got grandma onto the Internet. The Web allowed anyone with the knowledge, to put text and images up for anyone else to see. At this point, no Cryptocurrency has functionality anywhere near what the Web and AOL provided then. Eventually, it will.
The Internet was useful only to those who understood it, in 1993. The same is true of bitcoin now.
When Grandma can use bitcoin to send you $20 for your birthday, we will see the greatest transfer of wealth, humanity has ever experienced. When that Killer Application for bitcoin comes along, everyone will have at least some bitcoin, just like when AOL became popular, everyone had a computer, and got an email address.
The other thing President Trump mentioned in his tweet, was how volatile bitcoin is. It absolutely is, but every stock trader knows that volatility is where you make the most money. When an asset rapidly climbs or drops in price, you have the opportunity to make a lot of money. The advantage of bitcoin, is that it has a very prominent cycle, and so far, has increased an average of 80X during each cycle. On the down side, the average drop in bitcoin price is 88%.
Stablecoins now make it easy to move the value of your bitcoin, to a Cryptocurrency that is pegged to the dollar, the pound, the euro, the yen, or whatever fiat currency you like. Basically a Money Market for Crypto. That means, for the savvy investor, moving the value of your Crypto to a currency that will hold that value while bitcoin drops in price, has never been easier.
Bitcoin can never be censored, corrupted, or inflated, unlike the paper you have in your pocket. The fact that it is decentralized, unlike fiat, which is printed by a Central Bank, means that bitcoin is nearly impossible to counterfeit, can’t be diluted, and is impossible to steal, when properly held. Any amount of bitcoin, can be sent anywhere in the world, nearly instantly. Bitcoin is as close to perfect money, as we’ve ever found. The fact that those in the establishment, keep saying how it’s a fraud, or a scam, just proves how good it really is.
After all, if the President of the United States suddenly praised Bitcoin, any economy based on the U.S. dollar, would begin to collapse. That is the nature of fiat economies.
