Why Cryptocurrencies like Bitcoin have experienced explosive growth!
The people of the world are speaking with their feet while the highest regulatory bodies, watchdogs and bankers issue severe warnings about investing in cryptocurrencies. It seems similar to a dog warning the chickens to stay still and be quiet because there is a fox in the area, when all the while their protectors are sharpening their axes to prepare the chickens for their dinner.
I vividly remember 2008 when the regulatory bodies, banks and governments all tried to explain why it was the fault of someone else that resulted in a loss of over $22,000,000,000,000 (TWENTY TWO TRILLION DOLLARS) by the US financial markets and probably at least another $2,000,000,000,000 (TWO TRILLION POUNDS) by the UK financial markets. Ultimately it was the average tax paper that paid and suffered the most. The middle class is decimated, the poor class has swollen and a larger number live on food stamps, ALL WHILE the bankers, politicians and regulators live the life of the rich and famous.
No wonder the people of the world, who are not in the privileged 5%, are investing in and trusting mathematical algorithms of the BLOCK CHAIN and CRYPTOCURRENCIES. My father told me to always do the opposite of what the politicians, banks and regulators told you to do, and I would be okay. I am getting rid of fiat currencies, debt, bond and most stock and buying cryptocurrencies, gold, silver, uranium and commodities.
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You've hit the nail on the head, Roger.
The Global financial system is nothing more than Socialism for the rich and powerful.
The most effective way for governments and central banks to control the population is to manipulate currencies and engineer economic crises.
And yet so many people swallow the line that cryptos are a bad thing because there is no centralized, ie, government and central bank, control. That is exactly what the strength of crypto is.
And yet the Block Chain technology upon which cryptos run is entirely transparent, massively secure and has real world applications which governments are now taking seriously.
Cheers
Rich
You are so right about centralized banks and government.
Banks have been proven guilty of totally illegal activities, admitted guilt and paid fines, yet keep doing the same old thing. Instead of changing and being truthful they tell us over and over to give them even more power and they will fix what is wrong.
I'm really intrigued by the cryptocurrencies too! I pointed out in another post this week, that everything - institutions, industries, organizations, are all going digital. It's an era of data-ism. Medicine, insurance, religion, oil companies, the military; if we look around, everything is going into a database format. Artificial intelligence is exploding. Recently, a computer was able to beat a grandmaster of the ancient Chinese game Go, which is one of the most incredibly complex strategy games in history, and a feat that was thought to be decades away in artificial intelligence.
It stands to reason that currency will eventually make this move. Investing in cryptocurrency now has the potential to be the frontier like Apple, Google, Netflix, and the others, that started out at $4 or $5 a share were in the early 2000's. It's just a matter of knowing which of the 1,200+ cryptocurrencies to invest in. It's likely that only about 5% of them will actually explode, and the rest will go bust.
The U.S. has not made a serious move into cryptocurrency yet, either the government or big businesses, and for that reason many people don't believe it's as huge as it is. In Japan over 210,000 businesses are now accepting and even encouraging cryptocurrencies. Considering how data and tech advances in Japan have historically affected the U.S. in the past couple decades, it's not too groundless to expect the move here. I guess we'll see.
Great information. According to coinmarketcap.com there are 1,375 cryptocurrencies now and I believe there will be more than double that number by the end of 2018. Should be a very interesting year.
Thanks for this, Roger.
It is great to have your perspective on this topic, as you have devoted the time to study it, and the money to invest in it.
The initial reason for coinage was to provide greater trust that the silver or gold used for commerce was real, and not actually some base metal. In other words, it's about trust. Stamping the likeness of an emperor on the piece of gold or silver did the trick (for the most part), so the government or bank involved performed a useful service.
A few millenia later when the old US "Silver certificates" were replaced by "Federal reserve notes" this process got changed completely, but there was still a big government behind the money. US notes have remained pretty stable, as money goes - certainly less volatile than the value of silver or gold. There is a case to be made that conservative central bank policies are good for monetary stability.
That said, I'm pretty much with you on the topic of preferring a means of exchange that is immune to tampering by politicians and bankers - who I also feel have worked hard to earn our distrust.
I'm ready to join you, when there is SOME rational basis for trust in a cryptocurrency. It isn't history, statistics or any other track record - these are still too new for that. It isn't backing with a valuable commodity like gold or platinum. It isn't support by a huge government or corporate institution.
If the backing of cryptocurrencies is a digital calculation scheme too complex for us peons to fathom, it sounds a bit too much like credit default swaps, and we know how those turned out.
I'll wait for some rational reason to trust them before I start putting my money in cryptocurrencies. I'm convinced they have great utility and immense potential. Now all they need is value and trust and we are off to the races... Until then, I look upon them as a great future possibility and a present puff of smoke.
Cheers,
Steve
You are absolutely right TRUST is the critical factor and I don't know enough about mathematical algorithms to trust them to create trust. The highest math I ever took was grade 12 and it did not include calculus.
So far I can only say that if the blockchain brings trust to all the uses it is being suggested for, then I am all for it and will get more involved.
After all I don't understand the technology involved in a modern car but I still trust my life in one.
I've learned lots of math; I've a masters in Engineering - But all math can do is provide a rational relationship between two conditions, situations or facts. If blockchain and other parts of the trading scheme can give us powerful trust that ensures uniqueness of a particular digital monetary entity, that means it can be tracked and we have some rational support for the idea that it is the same one Joe Dough traded $400USD for last week. It also may provide convincing evidence that new bitcoins or other currency units were not created in quantity, diluting the value of this one,
That is important, and valuable, if a digital currency is to be accepted. It also means that we may be able to track this piece of digital money back to its' creation. It is that creation that causes my concern - it was arbitrarily created, rather than traded or used to represent something of accepted value, like an ounce of silver, or a Swiss Franc. Millions of people perceive a value for an ounce of silver and millions perceive a value for a Swill Franc. If I create a digital cryptocurrency called the Dsteve today, and issue a billion of them, I can set a price, but it is arbitrary, unless I back it with something like an ounce of gold or 100 Euros. That's my concern. There is nothing and nobody backing the currency, accept a fragile market, which can collapse to 0 in seconds.
While the idea that a market for the paper sets the value of shares of stock on the NYSE and $100 bills of US Dollars, is legitimate, both of these are backed by:
- Physical assets like buildings or trucks with value set in $USD or shares of company stock
- Expectations of millions of citizens who perceive a value of these assets, and state it publicly
- Track record of value with historic statistics that go back decades
When it comes to currencies like Swill Francs, Euros or USD, the long history and trillions of them in circulation and use provide inertia and a degree of stability. I feel that for cryptocurrencies to become stable, they need the kind of commodity related backing or exchange guarantees that most currencies start with. If I'm mistaken, and they have them, or used to, then I stand corrected. Otherwise, I'm hopeful that a new digital player will come along with such guarantees, so I can come to trust them.
I would be so happy if cryptos were backed by either gold or silver and I would be more involved in them.
My trust in financial institutions and politicians is so low right now I choose inaction most of the time. Having said that, I have most of my assets in 70+ mining stocks, bullion and real estate, constantly wonder if they are better protected elsewhere.
When I was growing up the highest goal was to become a millionaire. Now that I am older and life spans are increasing that is a minimum to survive independently, especially with decreasing assets.
That sounds like a sound philosophy, Roger. Political chaos is so widespread, now, that lack of trust in government backed paper seems like a great idea. If I had enough liquid assets to worry about where to keep them, I think Swiss Francs would look good to me, but for more inflation-stable investments, I think you have a great approach. Of course bullion and real estate are famously volatile, but if you are diversified in such holdings, you are still probably better off than a money market in USD or Euros, IMHO.
When I was in college, I spoke to my macro economics professor about money basis and proposed a theory that it should be based on a basket of economically critical commodities like tons of iron pipe, kilowatt hours of electric power, bushels of wheat, etc. He was not impressed, countering that all these commodities were too volatile. I'm now convinced he was wrong; volatility of commodities is natural, but if they are essential for commerce, they should balance out, although during a sharp recession most of them do drop in monetary value today.
I hope this backing weakness of digital currency is resolved, along with other issues like excessive computing capacity and energy use. I would like to see them replace the political paper we use now.
I couldn't agree more. I do believe a strong commodity cycle is waiting in the wings and I am stocked up on gold, silver, uranium, copper, lithium stocks.
I'm not convinced that these are viable entities yet. Case in point the huge cryptomining hack that occurred this week. https://www.wordfence.com/blog/2017/12/massive-cryptomining-campaign-wordpress/
They don't sound legitimate to me with this sort of thing going on.
Thanks for the URL. I read the article, but understood little. There are so many bugs, viruses and underhand things happening on the internet, I have started to unplug my computer when I am not using it.
My mobile phone is a problem because it is always on so I refrain from doing any banking or anything to do with money. Try to use it only for non-financial communicating and researching.
Any suggestions are appreciated.
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Does anyone know how I can get onto an exchange that supports Ripple (XRP)? I'm going nuts, because it's been the most affordable rising crypto for a while, and I can't seem to get verified for an exchange. They're all either slow, or "don't have service in my area". Has anyone else had trouble getting verified?
Where are you located? You will just have to keep trying as a number of exchange have been flooded with request from prospective clients to be verified and present clients have trouble getting deposits accepted.
Kraken (one of the largest reliable exchanges in the USA) has a warning on their site. .https://blog.kraken.com/post/1399/
I also heard today that some New Zealand and Australia Banks have frozen accounts of individuals trading Cryptocurrencies.
Don't worry the Blockchain is not going away and there will be all sorts of opportunities to invest in 2018 and on. BUT be sure to do your research and get some training before you jump in.
Thanks Roger! I came across that warning on Kraken too. I'm located in south-eastern New York. A town called Port Jervis. I've mainly been desperate because Ripple is affordable right now, and it's been going up daily. It was barely over $1 about a week ago when I first signed up to Kraken, and it's already around $2 now. That's why I've been urgent. I"ll just need to be patient.
There are always new ones coming up. RaiBlocks XRB has no transaction fees and very, very fast on a new type of blockchain. Be sure to read their white paper and do your research before speculating. I plan on getting some.
RaiBlocks sounds really good too, from what I've read. Do you know of an exchange that I could actually get into, without waiting weeks just go verified?
I haven't got that far yet. Let me know if you see any good reviews on RaiBlocks.
What I have read about RaiBlocks is all good, but that can easily be the written by paid promoters and those with a vested interest in it being successful.
Sometimes it takes awhile before individuals who have invested and had a bad experience, to come out and say so.