Money In Our Pockets Is Only Worth What You & I Agree It’s Worth, The Same With Cryptocurrencies
“Commit first and figure the rest out later.” — Grant Cardone
There’s a whole bunch of you out there that know a lot more about this space than I do but the fact that you know more doesn’t mean you do more. To begin, I’m no expert on Bitcoin or crypocurrencies but turn to your left or right and that’s pretty much the only topic of conversation going into 2018. So I thought I’d bring some value to the space and discussion.
However, educate yourself first on the topic by reading this paper published by the mysterious Satoshi Nakamoto on Bitcoin: A Peer-to-Peer Electronic Cash System. Also, watch a few Ted Talks and YouTube videos before jumping into a conversation about it.
Something in every part of our lives we do not understand or comprehend. Trust me, I feel the same way on a day-to-day basis in business, insurance and financial services. I’d be naive if I told my audience I am the expert. We always have to be learning and growing. But what I do know right now is Coinbase is one of the number one mobile applications in Apple’s app store going in to the holiday season.
Do We Really Understand Any Currency We Accept?
Why is everyone so baffled at the crypto thing? Do you really know where any of your currencies are let alone an electronic and Internet-based one?
As an example, we take cash everyday whether it is $1, $5, $10, $20, $50 or $100 with no real or true understanding of its value. Before you blurt out, “Yes I do know what it’s worth,” but do you really? The U.S. dollar, Chilean peso, Euro, Indian rupee, Swiss franc or Japanese yen have worth because we as human beings agree to giving it some sort of worth. So tell me, “How can a piece of paper be worth anything?” It doesn’t make any sense that adults put different value on pieces of paper. The same goes for cryptos. They are incredibly speculative at the present moment.
What I respect about cryptos is there isn’t really a middleman or intermediary like there is with Wall Street’s casinos. Technically, we can make the argument there is because of all the “miners” in the world but I’m not going to go down that rabbit hole.
Why is there a Wells Fargo, Bank of America, Citigroup, TD Ameritrade, PNC or JP Morgan Chase bank on every street corner in the world? These capitalists take our money, do not pay us anything for holding our money and then convert our money to digits. Bitcoin, Ethereum, Litecoin and all other cryptos do the same thing. They take our money → boom! it turns into digits.
Cryptocurriencies could disrupt one of the biggest and oldest problems that has existed on our planet: the ability to move currency. That I respect because there are a lot of people in other areas and undeveloped parts of the world begging for cash or some sort of currency to exchange goods and services with. Again, the innovators and entrepreneurs of the world currently solving these big problems are the one’s getting rewarded the most.
What We Don’t Enjoy About Bitcoin
All of this is great but there are still a few issues that need to be solved with cryptos. These few bullet points are simply based on my opinions and what other individuals are saying as well:
- No income is produced
- No tax advantages
- Heavily speculative
- No long term track record/history
The best way to predict the future is to create it.
Will cryptocurrencies change the banking and financial service industries in the future? None of us really know the answer to that question at the moment. Some say yes, others no. Will there be a correction of some magnitude? Probably at some point. Could Bitcoin continue to appreciate and go up? Absolutely. However, for something that has been around for less than ten years it is too early to tell since none of us have crystal balls and can predict the future.
My Very Best,