I bought my first Bitcoin
Courtesy of Joshua M Brown, The Reformed Broker
So you are now free to dump all of your crypto-currencies because this surely marks an all-time top.
But I thought I’d mention it anyway.
For those who are curious about why and how, I’ll just say the following…
I’m old enough to realize that just because I don’t see a use for something, that doesn’t mean I won’t be proven wrong by others who do. At the current moment, I don’t see the financial industry use for Bitcoin other than some marginal activities like settling commodity trades that are very far divorced from my day to day existence. I understand the benefits of these things – the blockchain acting as verification that the counterparty has made payment instantly, etc. I’ve probably read all the stuff that you have. I’m skeptical.
I also think it’s hard to imagine the IRS, Treasury etc allowing anonymous transactions without any reporting becoming a global standard for US persons.
But I’m willing to look beyond that because the goddamn thing won’t go away. I was talking with Justin Paterno (StockTwits) the other day and his attitude toward it is pretty much where I am – “Anytime something just refuses to die, you probably have to pay attention to it.” Bitcoin, if it were complete and utter nonsense, probably should have died already. But 7 years since it burst into the public consciousness – with all of the attendant volatility and criminal activity you’d expect to come along with something so new and unproven – and it’s still here. Despite the hacking and stealing and malfunctions and crashes, it’s still a thing. It’s the f***ing rooster. Ain’t found a way to kill me yet…
Anyway, I’m not a disruption hippie or an early adopter or a visionary or an evangelist. But I’m too curious to not experience Bitcoin ownership for myself. Oh, by the way, I don’t see myself trading it on price swings, more on that in a second.
So I used Coinbase, which from what I gather is the “safe” way to buy, sell and store. We’ll see. I began with a small amount of money so if they hack the site tonight and empty everyone’s wallets, I won’t feel it. The process was fairly simple.
First you create an account and connect it to your phone and email. They text you a code to verify and send you an email to confirm. No big deal. Then you connect a bank account, which only takes a second. From there, Coinbase makes two small deposits into your bank (pennies, don’t get excited) over the next 48 hours. You log back in and report what those tiny deposits were so it can verify the connection to your bank. Once that’s done, you can transact.
I bought some BTC, although ethereum and litecoin were also on the menu. I look at those other two like silver and bronze to Bitcoin’s gold. But I’m just making that up. Ethereum (ETH) might one day be better because it allegedly has some technological advantages, but I’m a newb so I’m starting with the more established fake thing rather than the less established fake things.
Anyway, I expect a lot of volatility and I really don’t know what I will ultimately do with my digital thing. Maybe I will add to it or maybe I will buy ETH also at some point. It went up 8% today I think so already I’m a genius ????
I think at this stage in the game, it’s important to be open-minded and not afraid to lose money or look foolish. I’ve invested into way dumber things in my life. And as far as what the future holds – if the disruption hippies turn out to be right, and the 21 million BTC that will eventually be the limit are out there in public hands, it’s hard to imagine them not appreciating in price. Especially if they become more institutionalized and embedded into enterprise scale transactions – which is what the banking industry seems to be leaning toward from what I read and hear. I like the idea of scarcity and owning something that is finite by design.
And yes, I am aware of the possible split in the community, I have no opinion about it and nothing worthwhile to add. I’ve factored this risk in mentally. The resolution of this scaling problem may turn out to be a powerful upside catalyst just as easily as it could lead to a panic. Brexit-esque.
One other thing. On the Silk Road two thousand years ago, you needed gold to settle transactions. Because from Korea to the Asian Steppe to the Mediterranean, there had to be one thing whose value was never questioned. Gold facilitated trade and liquidity from one end of the known world to the other. My opinion is that this property of the element – it’s universal acceptance – remained in force for centuries…until it was disrupted by the internet. Once computers arrived, we had instant access to values and prices of goods around the world. Gold’s role in global liquidity and verification suddenly mattered less. No one realized it at the time, but gold as a currency had been permanently disrupted by the microchip and the operating system.
The Information Technology Revolution began in the early 1980’s when the computer became first a ubiquitous business tool and then eventually a household appliance. It should come as no surprise when I tell you that this moment also was the inflation-adjusted high for gold, still unsurpassed almost 40 years later.
Blockchain technology may have just permanently disrupted traditional currencies. It’s obvious to me that even if this is true, we will not know it for sure until decades have gone by.
My emphasis and picture additions. ~ Ilene
Silkroad image by Cresques Abraham – Atlas catalan, Public Domain, Link. Other images from Pixabay.
