Afternoon y’all. A word on bitcoin if I may following a rather interesting discussion I had today. Let me quickly outline a few things for you if you are browsing for information then I can crack on and do my thing.
Bitcoin, in fact every crypto coin out or about to come out, has one thing in mind and that is ultimately they want to, not necessarily replace money but sit alongside it. Obviously it couldn’t replace it as probably 4/5ths of the world population have either no clue or no tech to be able to use crypto instead of cold cash, hell most don’t even have a bank account! Listening to people like myself and many of the people I know and businesses we all know are actively engaging in crypto or blockchain significantly more over the past 6 months and here in Gibraltar since the GBX raised it’s “Rkt” and the Government brought in DLT legislation the grip is even tighter on the imagination.
So these coins are here to stay and or are being invented all the time I recently blogged about the approximately 1400 currencies out there, at a conference recently the figure 1500 was used for the same. Whatever their name they are going to be used at some point instead of cash. A house for sale currently in London is being offered with a bitcoin price and even now you can buy other smaller things in bitcoin the way it is fluctuating though may be hard to settle on the price. Revolut the virtual card is about to start its very own cryptocurrency to sit alongside the other currencies you can use around the world. But it cannot replace cash because at the moment cash has a couple of standards bitcoin doesn’t have, confidence and price.
With forex we do see fluctuations in currencies but rarely do they fluctuate as dramatically as bitcoin and the current crop like Ether, Litecoin, Bitcoin Cash etc. It is a fact you could today buy an ice cream in bitcoin and it’ll be fine, it might cost you more tomorrow but as you’ve eaten it you are happy anyway and tomorrow you can decide not to buy it if its too expensive. However if you get a loan for a car in bitcoin you could find your car one week could be worth many times less than it was worth last week or indeed many times more depending when you bought it as the dips and troughs recently have been huge. These have to hit an average eventually otherwise investors will continue to cash in and cash out at a whim. At the conference the other day in fact one speaker talking about token sales pointed out that if a token sale is to be a solid investment then the person who raises all the capital must have the morality not to dump all the coins he holds/creates immediately or the investors will stop taking the risk in this kind of sale. Makes sense.
As to my other point today the odd thing that people will find odd about crypto is its smaller parts. I remember on the 15 Feb 1971 decimalisation came in. The UK changed from “old money” to “new pence” creating confusion for many consumers. I had to go around the market with my mother who at the time was 40 years old and convert from new to old so she could understand the value of what she was buying. This confusion lent itself to greedy retailers increasing prices. In essence the same could happen when allying bitcoin or any cryptocurrency with a fiat currency. Taking bitcoin as an example 1 bitcoin today is worth about €7000 which means if you were to buy a coffee at my local bar it will cost you 0.0001428577 bitcoin or 14,286 Satoshi. There are 100,000,000 satoshi in a bitcoin. This I think gives the general public a real headache in terms of value per se in their head, certainly initially and until this is resolved, or the oldies die out .. it is for me a reason bitcoin cannot yet replace cash.