Thursday, May 25, 2017

Bit-Bloody-Coin



Bitcoin (BTC) is trading at freaking $2500 USD now.

That's just mind blowingly insane! (especially when previously I was considering buying in at $500, ehehe #notsalty)

I'd say that I understand cryptocurrencies quite well (better than your average Ah Huat). It takes a fair bit of brain power to understand how public and private keys work and how to move the money around. Interestingly, I even ventured into the dark web and discovered "tumblers", which are basically money laundering services. For the privacy-concerned, this is an essential step since all bitcoins can actually be traced moving around. Tumblers solve this problem, at least I think. Sure, it's more of obfuscating than actually washing, but I think it does the job pretty well.

Pair this up with direct P2P cash-BTC meetups and deals, throw in / hire a middle man with fake accounts to do the deal and drop offs, and you've pretty much got an almost anonymous way to deal with money.

Okay, sounds very criminal-ish, but that's the reality of bitcoin. It moves fast, it moves together with thousands of other transactions, the owners moving the coins around can be anonymous and finally cashing out requires no law, authority or permission. And to be honest, I think that is the appeal of BTC.

Personally, I believe that the future of money is the world is going to be local, sovereign currencies governed by each country, but co-exisiting with unregulated crytocurrencies.

I'm still waiting on a crytocurrency that has the potential to be go mainstream.

As it stands right now, BTC is used for allowing capital flight, black market transactions and money laundering. I question the amount of legitimate transactions going on with BTC.

Methinks that a future crytocurrency would be able to do all of the above as well, but the main difference would be that the volume of such "dirty" transactions would make up a fraction of the volume changing hands. I'm rather certain that most of the transactions and the bulk of the value of BTC movement are for sketchy purposes.

Definitely not a tech savvy hipster paying for his matcha-latte frap at a BTC-accepting hipster cafe.

If a crytocurrency can break into the mainstream for practical usage purposes, I believe we would have found our next "gold", or at least, an international medium of exchange.

Until there is adoption by at least a sizeable amount of people using it for actual day to day purchases, crytocurrencies are in a bubble to me.

That said, Japan legally accepts BTC as payment, so they do have that going for them. With the recent news that BTC has just enabled scaling (allowing more and faster transaction confirmation), BTC does seem like it could go mainstream.

If we see more countries accepting and legalizing BTC usage, I would say that it would be time go to into BTC. Even though its not intrinsically valuable, such "legitimization" would allow BTCs to at least be cashed out in those accepted countries and prevents it from being stuck or worthless.

Watching the meteoric rise of crytocurrencies lately and also hearing stories of a guy sitting on $2,000,000 worth of alt-coins from an $8000 investment also makes me feel like jumping in, but really, it's a lot of risk, but I guess for a lot of reward as well.

I await the rise of crytocurrencies and now I'm just on the sidelines watching the big boys slug it out (BTC, ETH, LTC). BTC is simplistic, but it works, it's improving and it's big. ETH is the new player, but it's still in development and seems highly speculative as of now. But looking at the volumes, it seems quite safe to assume that quite a lot of BTC holders are moving their profits and diversifying into this. LTC, while promising, looks completely overrun by the Chinese. This could lead it to have a bigger run up, but it could also leave it high and dry (no volume).

Of course, while all this is happening, we are also watching governments de-value their currencies.

I happily sit atop my pile and count my stash of precious metals.

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