A few weeks ago a coworker and I were discussing his previous job as a supervisor for a high end landscaping company. He told me how he had to supervise a bunch of labor workers who would take a nap during their lunch break before getting back to work. He said that his boss would tell him that he needed to treat these workers like mules. He thought it was wrong and felt bad that someone would do that to them considering how nice and humble they all were. These men, he said, were likely on a work visa from Mexico, working here in the States to save up their money and send it back home. After he told me, I said how it would be so much easier if they were paid in Bitcoin. If they sending all their money back home, a Bitcoin transaction would be as quick and painless as sending an email and cost virtually nothing. Of all the millions if not billions of dollars that gets sent overseas by working men and women, you know those transaction fees add up. I’m sure there are a select few in the more well-known banks ranking in the big bucks.
In the “old” days, when the economy went south, many would hoard precious metals like silver and gold. Funny thing is, the “old” days can go back as far as 2008. Yeah, really not that long ago. By 2013, anyone who was fairly active on the internet knew about this new, innovative cryptocurrency called Bitcoin. I’m sure we all remember how quickly the price jumped back then, reaching almost $1,200 per coin. Many thought this was the next get rich quick scheme. For a brief period of time, it kind of was. A lot of people who bought the currency back in 2011, when it was no more than $20, were selling it and making HUGE profit. There was one story of a guy who bought a few, likely for drugs off the Silkroad, and forgot about it. He realized he had some and sold them during their height, and bought a nice apartment. Crazy!
When the price came crashing down, many critics were saying the fad was over. This always angered me. Everyone assumed it was no longer relevant and moved on. It showed to me that these people knew little about money or basic economics. It also showed that the vast majority of people only want something that can get you money in the here and now. Sometimes investments take a while, and sometimes, they need to be worked upon before they gain their potential value. Bitcoin in my opinion is far from being over. I would argue that it has just begun.
Many law makers around the world are discussing what to do with the currency. Its potential could be threating to some major financial institutions. To my surprise, the US government didn’t intend on regulating it. I figured the senators and representatives’ grandchildren were investors. However, China has been real iffy on the subject. Many Chinese investors created hype that brought the currency into legitimacy among international markets, yet their government made some rulings that would limit its status as an official currency. Actions like this and the strength of the dollar, euro, yen or whichever major currency, seem to be the main factor on dictating the price. Many have gone on record to say that the spike in price may have been due to Cyprus’s economic turmoil. Makes sense. As Greeks begin to prepare for the worst, the value has gone up. I wouldn’t be surprise if the price goes over $300 within a month. With so many people educating themselves about it, and now turning towards it for salvation, I will boldly say the currency is here to stay.
So why are people going to Bitcoin over precious metals? For one, Bitcoin is SO much easier to store, transfer and use. The beauty and one of the major reasons why I am in love with it, is not the potential value (some speculate the price could go up to $1 million dollars), but the ease and lack of restrictions. As stated in previous blogs, our digital age is making it easier to do things we could have not been able to do before. We are gaining more control over our resources and doing so quicker than ever before. When I bought some silver, I had to wait 2 to 3 days, sign a slip and lug the heavy box into my home. Luckily I didn’t have to pay a shipping fee. When I transferred my Bitcoin offline to a USB, it took 10 seconds. I transferred over $1000 of BTC (Bitcoin) into a $5 USB in seconds and paid NOTHING. Granted, it does takes some time to buy BTC and have it sent to an online wallet.
As of 2015, most people seem to be buying and hoarding waiting to see if they become rich or if it becomes the backup currency in case any of the major currencies fail. What I hope, and I’m sure will come soon, are major retailers accepting BTC as payments. As far as I know, Overstock and OKCupid accept BTC. Major sites like these are a huge step. I look forward to the day where you can go to any store, scan a QR code to buy something and the money will automatically be transferred from your online wallet to the company’s. All you really need for this to work is have some sort of app that will automatically exchange the value to the dollar to BTC. In other words, if you want to buy something that would normally be $25 but rather pay in BTC, the program will simply charge .10 BTC. If the BTC rate changes and is not worth $500 to 1 BTC, than the program will charge .05 BTC for the same product. If something like that exists, let me know!
A lot of people read about the hype and wonder if they should get themselves invested. For those wondering, like anything you invest in, you should only put in as much as you are willing to lose. If you want to put some money into something that will preserve wealth, by all means, buy precious metals. If you want steady growth, go for stocks. If you are a risk taker and want big gains, penny stocks are something to consider. However, if you are one of those who likes the idea of changing currency as we know it, and wants to be a part of something that could be one of the biggest staples in human history, buy some Bitcoin. Again, only as much as you are willing to lose. One of the best things about this currency is the fact that it is a series of numbers. You can buy as much or as little as possible. Only want to buy .093423 BTC? No problem. How about 5.612 BTC? Knock yourself out. Just keep in mind many sites are now beginning to cap on how much you can buy and sell in a day. Remember there are only 21 million BTC that will be mined. Once they are mined, that’s it.
So the bigger question is, what can a future with Bitcoin look like? Well for starters, I doubt it will be the world’s currency let alone replacing gold or silver as backups for the SHTF scenarios. Like precious metals, when things go bad, these commodities go up. Should we expect this or hope for this in order to become wealthy as Bitcoin users? No, not at all. If this were to happen, life would suck. Your time and money would be spent on supplies for survival. No fun or planning for your future. Just the essentials for get through the day.
What we should be hoping/ expecting is a world where select stores, businesses and individuals accept BTC as payment. If we were to get 2% of the world’s economy in BTC, we would see drastic changes in our understanding of money. If we were to see 10% of all black market transactions, we would see drastic changes. It doesn’t take much to make a difference. In order to progress the currency and have it reach its full potential, we would need to invest. Not much, but enough to make sure we call have as many as are currently mined. With a currency that has a set number and will not inflate, other currencies will begin to compete. Money management will become smarter, safer, conservative and open source. With BTC, we can see all transactions thanks to the network. Money that allows us to see how much is spent at any given time, can educate the general public where all the money goes. We can grasp on who has control, how much, how long and eventually come up with the reason why.
A Bitcoin future to me looks something like this. Imagine you get paid on Friday and you are deciding on what to do with your money. You go on your smartphone, and click on a few things. One tab is for your bills. You click “Pay Bills” and the BTC are automatically sent. You see another tab for “Savings”. This can be for another online wallet or an offline on you keep in a USB or a piece of paper locked in your safe. You choose how much you want sent and you do so. And finally you see “Other”. This is the wallet where you put some money you are saving for a vacation, tattoo, a new TV or anything at strikes your fancy. Again, you decide how much you want to put in and it is sent. All of the following transactions can take less than a minute combined. It’s almost unheard of to think of a currency on which you don’t actually hold. You can carry it on your phone and scan something. Admittedly, it would take some time getting used to, especially with older generation. Within a few years though, I can see it becoming common practice.