Cryptocurrency is certainly not for everyone…yet! There will come a day in the relatively near future when some derivation of cryptocurrency will become our mainstream form of transacting commerce. Yes, you will probably even buy and sell companies on the stock market using it.
As with any new technology or idea that is difficult to embrace early on (Digital music vs. CD/Tapes/8-track; currency bills vs. Gold; ANET vs CSCO; the Cloud vs. local; the Internet; taking cash out of a machine at the bank; PayPal/Venmo; etc), glitches, iteration, fine tuning, and ultimately common acceptance will take time and trial and error, but it is closer than you may believe. You have to ask yourself if this is just a “fad” or if in fact this will stick around. I do not see how some form of it will not survive in the end, so then you have to ask at what point you want to understand it, embrace it and start to adopt it…at least on some level. I have a credit card, an AMEX, a PayPal account, Venmo…I even have a Square and Apple pay. I am dipping my little toe into cryptocurrency to understand it better and because I live in Silicon Valley, where it is embraced and used by many already. You can think of it as a new type of currency, but it is also just (yet) another form of transacting or bartering, eventually without the ridiculous fees.
When I consider how much money that banks make as the “middle man” when we execute anything from a wire transfer to a mistaken “overdraw” of funds (which they graciously “allow” to go through, but then charge us $35-50 on a relatively minuscule overdraw of funds); and how much control over our money that the banks and Government arbitrarily have and can seize at any time, hold for 10 days or longer in transit, restrict access to, and other regulations, I am encouraged by the concept of removing the middle man, the time lag, and the exorbitant fees we pay to transact money in our current banking society (though I admit the early “wallet” companies are certainly extracting their pound of flesh at the moment). But after 2008, can you honestly say you trust the banks either? And if you know the entire history, it started with the government and a change in regulation to enable the banking crisis…but I digress…
Without diving into the deeper concept of blockchain (think “accounting transaction ledger” that is infinitely more difficult to tamper with or manipulate) or the plethora of other ICO’s (Initial Coin Offerings - Think “IPO” without the bank and SEC regulation, which yes, is scary and is not for the meek of heart either way), I believe the question is not “if” cryptocurrency will eventually become mainstream, but “when” and “which one” or “ones” will win the race and be most widely accepted. Who in 1990 would have believed the internet and cloud would permeate almost every aspect of our lives today?
Full Disclosure: It is certainly too early to tell, but I personally own one (1) bitcoin as I pen this blog, which I purchased at an average price of around $4,500. I have used it to pay for coffee (just to prove I could), give my wife $5 to start an account, and I have watched it go up about 70% on the market. (I could NOT recommend it as a means of wealth accumulation or rational investment, though, unless you enjoy gambling, want to actually use it as a means of transacting, or just want to play around a bit with a small amount to learn more about the future). I own it through the app/online wallet “Coinbase”. I do however also own a lot more EURO and Swiss Franc as a hedge to my primary liquid “dollar” currency.
I would add that one bitcoin completely lost or devalued from today’s price down to zero would have virtually no impact on my life. I would not allocate even .5% of my portfolio to Bitcoin or any other cryptocurrency at this point, but I AM taking it seriously, learning as much as I can about it, using it to transact, as I believe in some form that it will have a profound impact on how we transact and function over the next 50 years.
Cryptocurrency is certainly not for everyone…yet…but I would not write it off or discount it anymore than I would electricity, radio or TV, computers in our pockets, self-driving cars, AI and robot deep learning or a manned mission to Mars. Why is a new currency or means of transacting in this Brave New World any more difficult to imagine?
