One of the hottest hot button topics today - seemingly everywhere - is crypto currencies and sub-topics Bitcoin, blockchain tech and gpu’s. Some experts say it’s a fad, it has no value. Some say it’s the second coming of money and not only stores value but actually creates it. I’ll go out on a limb here and say that not many people I’ve talked to are really convinced one way or the other (a sign of intelligence, I suggest.)
But we can always count on the Fool to be conservative. Without taking any direct quotes, my takeaway so far from the Fool in aggregate has been a vague notion of “stay away; that way be dragons.” Yet the published values of crypto currencies are soaring, mining is rampant and the topic is becoming deeply embedded in endless cultural and economic topics.
One of the unspoken, subconscious thoughts scrambled in my head has been “TMF will recommend crypto-currencies when hell freezes over.”
Welcome to the Freeze. I received an email today from David G. I guess it was a promotion for the podcast of Rule Breakers, which I’m ashamed to say I’ve never taken the time to listen to. Anyway, in this email is a partial transcription of an interview between David G and a RB analyst Aaron Bush. I will quote but 2 tiny slices here.
Gardner: Should I today be buying Bitcoin?
Bush: I’m going to say yes. If this does prove to be a legitimate store of value, the $93 billion market cap today can go 10x, 20x, higher just as people believe in it.
Bush: … I think what is exciting about this movement, in general, is that it’s starting to expand beyond that core group of people into new, exciting applications and new people joining and being interested.
Gardner: [There is a] $93 billion value to this asset class. Even if Bitcoin is zooming up and down daily and is somewhat speculative, there’s real value being created out there.
It’s the idea encased in that very last phrase that has so far befuddled me: there’s real value being created out there.
On one hand I have to wonder how putting some 1’s and 0’s in a machine has possibly created value out of the ether. On the other, I’m sure many third world citizens who have never used an ATM are still wondering the same thing in regards to my accounts at Wells Fargo. Maybe the 2 cases are actually similar. But wait. I worked and provided value in exchange for those 1’s and 0’s at Wells Fargo. I thought that was where the “value” part of the equation originated. Was I wrong all this time?
Frankly, I was kind of hoping crypto currencies would fade away like Beanie Babies and Silly Putty; Learning yet another high-tech investing niche is not high on my list of fun things to do right now and I don’t have the time anyway. But if this is indeed going to change the world we live in …
< sigh > Oh well. Looks like I should get started as soon as time allows. Welcome to the Freeze, indeed. We may be experiencing global warming here but I here hell is solid ice. (Can anyone confirm?)