Given my current line of work, more and more people keep asking me about Bitcoin investment and whether or not I think it is a good idea? While I do think at least half these people are only asking to see whether or not I’m stashing away some giant cache of Bitcoin somewhere, I genuinely think at least some of them are legitimately interested in learning more. Regardless, my answer/response to them always remains the same: No, I do not currently own any Bitcoin. No, I have never bought Bitcoin throughout the past and no, I certainly wouldn’t recommend investing in the cryptocurrency in the future.
What everyone should understand about Bitcoin is that its already had its “hay day” – so to speak. Anyone whom invested in Bitcoin prior to the summer of 2015 and held onto it through the beginning 2017 ‘got rich,’ essentially, but this doesn’t mean it’s ever going to happen again or repeat itself in the future. I say this because the source code of Bitcoin was specifically written to account for the eventual rise of inflation, the same market driven phenomenon effecting every form of currency preceding it. To do this, Bitcoins source code was designed so that the longer it exists, the harder it becomes to confirm transactions through the block-chain – thus requiring larger and larger amounts of power and energy to mine/verify its transactions. Put another way, the longer Bitcoin exists and the larger it becomes, the more the costs associated with owning, creating, running or mining it increase, therefore offsetting the value of the cryptocurrency itself – theoretically acting is a built in safeguard against inflation.
For example, you might recall a December 2017 study during which it was revealed that Bitcoin mining had already begun consuming more power annually than 159 individual countries worldwide? This is also exactly what I am talking about here, and this phenomenon is only sure to get worse or grow larger over time.
[Tell me again the one about the blockchain saving the world with a decentralized economy] Bitcoin Mining Now Consuming More Electricity Than 159 Countries Including Ireland & Most Countries In Africa – https://t.co/elMk7qafQO @fabriziobarca
— Alberto Cottica (@alberto_cottica) February 11, 2019
The other thing you need to understand about Bitcoin is that its value is directly tied to hacking, hacking events and other illegal acts online. Meaning that the more hacks occur globally, the more times the cryptocurrency changes hands and the more valuable of a commodity it therefore becomes. For example, you might notice how Bitcoin’s price skyrocketed at the end of 2015 and into the start of 2017, before steadily going on to crash ever since? Ask yourself, why do you think that is?
The answer is simple. Hear of any hacks and/or leaks in 2015 and 2016, say in the months leading up to the November 2016 US Presidential election of Donald Trump? No? Didn’t think so 😏. Whether anyone wants to admit it aloud or not, Bitcoins worst kept secret is that its value is directly tied to “Black-Hat Hackers” and other hacking events, because Bitcoin is how all of these people pay one another or exchange money online. This means that the more hacks and/or leaks and/or ransomware and/or cyber-attacks we observe globally, the more “valuable” of a commodity Bitcoin becomes. Therefore, if you want to invest in Bitcoin in the future, you’d have to center your investment around a time during which you’d expect hacks to once again start skyrocketing.
Consequentially, this leads me straight into my next point. Just as with the summer of 2015, when various EU countries starting holding National elections, and through to the fall of 2016, when the US held its national elections, many EU countries will once again be holding elections in the summer of 2019 and similarly, the US will be holding another Presidential election in the fall of 2020. See where I am going with this? If I were a betting man, which I’m not, and if I were going to begin investing heavily in Bitcoin in the future, which I never will, I would almost certainly time my initial investment around June-August 2019 and hold onto it through January 2021 – the first month the next US Presidential term in office. Surely this period of time is set to see a large increase in the number of cyber attack, hacks, leaks, DDoS attacks and ransomware infections worldwide, thus pushing the price/value of Bitcoin higher – but who knows for certain, honestly?
Bitcoin & Banking
Another major problem facing Bitcoin throughout the future is the “legality” of it all. For example, Bitcoin has already been banned at one point or another in countries such as China, Russia and more recently, India. These countries also represent some of the largest economies/markets in the world. As for why cryptocurrencies keeps getting banned there, and in other countries like them around the world, its because these governments cant stand the fact that 1, Bitcoin cant be taxed and 2, because Bitcoin is often times used for corrupt political practices or to launder money.
To skirt around these problems, many countries have begun making it legal to own Bitcoin so long as you store your Bitcoin wallet in/with a major banking institution – much in the same way you store money in a savings account, only using Bitcoin. Allowing a trusted banking institution to hold your cryptocurrency and see where you are spending it adds an extra layer of transparency to it all, essentially allowing Governments to cope with its existence more easily. However, many of these policies are either still up for debate, have yet to be fully enacted, or were just recently passed into law. Meaning that Bitcoin has only just begun to experience its growing pains, and debates surrounding its legality, regulation and/or usage will only continue to grow larger or get more complicated over time, before anything is solved or gets better. At least in my opinion, this is yet another major deterrent to investing in the cryptocurrency at the present moment in time.
— bitcoin beaver (@bitcoin_beaver) March 5, 2019
Categories: World News