I’m guessing by now you’ve heard of Bitcoin, or know someone who’s told of the fortunes they’re making buying it up like it’s a tech stock from the late 90’s. But have you spent any time trying to learn about what Bitcoin, or Ethereum, or any of the other 1,800+ cryptocurrencies out there are? Does the word “cryptocurrency” make your head spin? More importantly, have you heard of Blockchain or learned anything about it?
If you are familiar and are involved, invested, or using blockchain and cryptocurrencies, you can stop reading. You probably know everything I’m about to say (hell, you probably know more than me on the subject and could write a better blog about it than I’m writing).
If you’re still reading, then your answers are likely either:
- “Yup, heard of them, but don’t know much and couldn’t explain them”
- “WTF are you talking about?!”
I was the first answer a few months ago and so I started researching and trying to learn more. What I’ve concluded (for now) is that this stuff will likely revolutionize not just global currencies, trade, and economics, but it could very well turn the future exchange of most anything on its head. I’m talking about the exchange of contracts, records, certificates, deeds, titles, identities…..even the exchange of ideas.
My two cents: get on board or get left behind and do your best to catch up later.
I’m by no means an expert. Not sure at this stage if anyone is an expert. But there’s a ton of really, really, really smart people out there doing some amazing things that most of the world doesn’t realize is going on. Someday, the rest of us will wake up and wonder what the hell happened while we were napping and dreaming of our 401K plans, stock portfolios, and paying off mortgages.
“So where do I start” you ask? Google of course is a great place to start. Here are some quick links to get you caught up a little:
- Satoshi Nakamoto white paper “Bitcoin: A Peer-to-Peer Electronic Cash System”. Satoshi Nakamoto is the fictitious name of the person(s) that designed bitcoin and the blockchain concept that Bitcoin uses. This is a good explanation of both. All other cryptocurrencies operate more or less on the same premise.
- https://www.coinbase.com/. Coinbase is one of many cryptocurrency money transmission services out there. They allow transactions in Bitcoin, Ethereum, and lightCoin
- Of course I’m going to mention Wikipedia…https://en.wikipedia.org/wiki/Bitcoin
So after reading some or all of the above and seeing the amazing growth in cryptocurrency values, your probably ready to jump in and start investing. I think the returns have been phenomenal and I wish I got in long ago. If you had $5 worth of bitcoin back when it started, that bitcoin would be worth around $350k now! But be smart about how you invest your money. Take note that the US Securities and Exchange Commission (SEC) and other regulators are looking very closely at this stuff and could act at any moment in a way that could kill the value of any or all of these currencies.
- See this ruling by the SEC on the now defunct cryptocurrency called the DAO: https://www.sec.gov/news/press-release/2017-131. As of now, none of the other exchanges have been ruled on and officially classified as a “security”. But you know the saying: “if it looks like a duck, walks like a duck….”
- See here for the IRS’s current treatment of cryptocurrencies: IRS Virtual Currency Guidance. As of now, they are not recognized as a currency at all, but instead as property. Either way, be careful you don’t forget that Uncle Sam wants his cut of your profits.
Just like any disruptive, new, maturing innovation, cryptocurrencies have alot of unknowns and details yet to shake out.
I’m not necessarily advocating day trading cryptocurrencies, but I am advocating learning more, and getting involved sooner than later. Buying Bitcoin maybe as an investment you’re willing to lose, or to use as a commerce tool would definitely help one learn more about it. But you should also pay attention to the space in general. What’s going on with regulatory policies, what new ICOs are occurring, what new startups related to Blockchain are popping up?
My prediction: decentralized, virtual, distributed technologies are possibly the most disruptive innovation of the modern world. Whether it be currencies, contracts, or any other tool used for exchanging things with others, the world as we know it will change dramatically. When fully implemented and perfected, Blockchain will eliminate the need for all the “middle men” historically required for transactions. Banks, attorneys, government treasuries are all scared to death of this stuff. Don’t believe me? Why else would China outlaw it (Forbes: Why China Crushed Bitcoin)? Because it would eliminate their ability to manipulate and control their currency. JPMorgan’s CEO Jamie Dimon says bitcoin ‘is a fraud’, prediction or wish?
I’ve jumped on the bandwagon. Join me, there’s tons of space still for you.