Bitcoin is a tulip. Famosly, Dutch Merchants engaged in a frantic tulip trade, which reached a fever pitch in late 1636 and was a bust by early 1637, and they paid incredibly high prices for some bulbs. When a number of buyers announced they wouldn’t pay the price previously agreed upon, the market fell apart and caused a small crisis. Tulips now are a completely unremarkable flower, bought for a few dollars at most.
Bitcoin is not just a tulip, it’s also a Beanie Baby. During the later half of the 1990s, these were a major fad, and they were collected as a financial investment. Beanie Babies are still being bought and sold, like any other collectible, but they are down in value from the heights of the bubble back to near their original price.
Bitcoin will be the same. It will reach a dizzying height in value, then crash. It will, of course, retain some value, never going to zero, but what will that value be? When should you cash out your Bitcoins, and turn them back into cold, hard cash?
People are staring into crystal balls, checking their tea leaves and even reading Internet articles, trying to predict what Bitcoin’s peak value is going to be. The emotion that is driving all this is the same that drove people to buy tulips and Beanie Babies. That emotion is jealousy.
You read about some kid investing a thousand dollars in bitcoin, back when bitcoins were worth only a fraction of a dollar, and you read about what that kid is worth now, which is millions, and you feel the deepest and most powerful of human emotions, the desire to get a piece of the pie.
Bitcoin is magic money, being conjured up out of nowhere, and who doesn’t want that? The world feels like a dangerous place right now, and we can argue all day about what the root cause of the world’s instability, inequality, and general messed-upness is, but the fact remains that, with a world in this shape, and threatening to lurch ever further toward the sort of dystopian hellscape usually reserved for a YA novel, we are all feeling the urge to get ready to face the coming storm of crazy.
In a world of computers and the gig economy, algorithms seem laser focused on sucking money out of the pockets of ordinary people, to be concentrated in the war chests of mega-wealthy dynasties. We can all feel it happening, and as real money disappears from our wallets, it only makes sense to welcome cryptomoney into our digital wallets instead.
If you have ever received money at all over the internet, you can get a sense of how powerful computer-based finance is, and how archaic bricks and mortar banking is. Electronic transfers between Internet sites take fractions of a second. You send the money from one platform and before you have clicked on the browser tab to go to where you sent it, it is already there waiting for you. The electronic money travels faster than the human finger can click.
Try sending the same money to your bank and it takes days. Maybe they want you to think highly trained operatives are driving through the night to put your money on a plane and send it to where it needs to go, but they aren’t. They are sending packets of ones and zeros, just like everybody else. The only difference is they take their sweet time about it.
I know what type of money I prefer. I want the kind of money that moves like lightning, so it is where I want it to be, when I want it to be there. I want electronic money, such as, for example… Bitcoin.
None of this has anything to do with the current roller-coaster ride. People are not considering how useful a currency Bitcoin will be. Even a powerful currency like the dollar, isn’t worth much more than the paper it is printed on. If Bitcoin is lucky, it will end up worth about the same. I’ll go further, I will predict that Bitcoin will be worth a little less than one dollar, and it will happen sooner rather than later.
You heard it here first folks. Bitcoin, within five years, will be worth more or less exactly one dollar. It will then go up and down in value, just like any other currency, approaching the heights of the Swiss Franc and the Yen sometimes, or plunging down again at others.
This prediction comes to you from the same guy who confidently predicted that the Internet would never catch on, and that the UK would never be stupid enough to vote for Brexit. Okay, so I don’t have a great track record, but if I’m right and Bitcoin indeed will one day crash down to a fraction of its current value, that just makes the desire for a piece of the pie even stronger. This gold rush won’t last forever, so we all have to get on the train while the prices are going up, and somehow work that magic that allows us all to get off again before the crash comes.
There is an even more gloomy prediction I could make, and that is that Bitcoin might not even be money at all. It might be completely worthless. Bitcoin has a fixed limit on how many bitcoins can be mined, that makes it like gold, the thing once used to back currency. What would that mean for Bitcoin’s long-term value? Nothing good.
The vast majority of coins - 99% - will have been mined by around 2032. Roughly 20.67 million coins will exist.
Think about it. Bitcoin isn’t money it’s gold. You don’t have to mine money, you have to mine gold. There isn’t a finite supply of money, there’s a finite supply of gold. The only difference is that gold has uses. Gold is used in mobile phones and jewelry, where Bitcoin isn’t any use at all, outside of being the technology behind electronic money. If Bitcoin isn’t even money at all, it might fall to zero value.
So… the question is, how do we work out which of these possible futures for Bitcoin will come to pass. The only guide we have is the valuation of the currency. When it goes up, we can believe in a brave future of e-commerce and plenty, in the post-scarcity future sci-fi authors have been talking about for so long. It will bring with it the paperless office and guiltless chocolate
But then it slips in value, and that can only mean this beautiful future is doomed. We will continue to work gig jobs in the dark satanic mills of some CEO’s dynasty family, paid with a few grubby handfuls of dollars. Certainly not enough of them to pay the rent or buy medical necessities.
This is why Bitcoin is such a roller-coaster ride, even for people who haven’t bet big money that it will continue to go up. Even if, like me, you are way too chicken to actually commit funds to this craze, whatever the outcome is will still have a huge impact on all our lives.
So buckle up and let’s ride thus bronco together. It will make us all millionaires in a post-scarcity wonderland, or it will crush our dreams and leave us wandering the post-apocalyptic woodland, all of us, not just the winners and losers in this little round of currency speculation that is going on right now.
Galaxy Dog (Dark Galaxy) Start Reading the Dark Galaxy Trilogy
The first book in the Dark Galaxy Trilogy, always the best place to start, is Galaxy Dog. It’s a little more old-school and fun than a lot of the sci-fi that is around at the moment. It has spaceships, robots, battles, and brave warriors rebelling against an evil empire. Click the book cover and go to the storefront you prefer to buy it now, or follow this link.
This is a universal book link (UBL) and you will be greeted with a page displaying all the places the book is available online. Just select the storefront you prefer and, if you want, also make this your default bookseller. From then on, every time you click a UBL you will be taken directly to the book you are interested in, on the storefront you prefer. The UBL even allows you to go to the Amazon store that matches your region.