99% of Cryptocurrencies are total scams. And, yes, Cryptocurrencies are te a bubble.
BUT. the chance is NEVER going away and generational wealth will be made. So you have to know the basics, why this chance even exists and what to observe out for.
Here’s the problem. There’s around 900 different cryptocurrencies that exist, with fresh ones being created every week.
I can tell you for sure: 95% of the cryptocurrencies are scams or Ponzi schemes. And I get questions every day: “Is XYZ currency a scam?” And nobody listens to the reaction.
Everyone is coaxed they are right. That’s a bad sign. I always tell myself I’m the dumbest person ter the slagroom. Then I call the smarter people and ask them lots of questions. And then I read everything I can. And te this case, I read the code.
But the chance is immense. Think, “Internet 1994”. Right before the “right before”.
BC will stand for “Before Crypto” and AC will stand for “After Crypto”. Wij are ter AC right now and the world is about to switch.
I’ve never written about Bitcoin and cryptocurrencies before. But there’s a reason I want to commence now.
Wij’re ter a hype bubble.
It doesn’t mean cryptos or bad. It doesn’t mean you shouldn’t buy. It just means. there’s a lotsbestemming of hype and scammers out there. Wij’ve seen this story at least twice before te past 20 years and many people have gotten hurt.
I’ve bot actively involved te investing te Cryptocurrencies since 2013 (I sold my book, “Choose Yourself” ter a Bitcoin-only store I created a month before I released it on Amazon). And for the past Legal months I’ve participated te various ICOs (Internet Coin Offerings) that are all doing well.
I say this just to establish some credentials. I will be writing more frequently about cryptocurrencies simply because I see so many people I know embarking to be hurt when, te fact, there’s opportunities to make a loterijlot of money ter the space.
A plain cryptocurrency transaction looks like this:
A) James wants to send Joe Ten bitcoin.
B) James has 100 bitcoins that he has gotten from 500 people who, ter turn, got from Ten,000 people, and on and on back to the very very first bitcoin transaction.
C) James puts together a “transaction” (technically complicated but simply described spil a “transaction”) and sends it out onto the block chain.
D) A “block” is a list of transactions.
E) enough “miners” confirm that the transactions te a block are legit (all of the inputs are legit and all of the outputs are legit. The merchant (te this case, “Joe” ) can determine how much validation he needs.
F) the bitcoins get transferred
Every step above is much more complicated, but for a reason.
A) a standardized and neutral confirmation policy backed by software that has no human agendas.
What does this mean?
Imagine I want to send Joe dollars to buy his house. I need to trust all of the middlemen inbetween Joe and mij: local canap, central canap, lawyers, governments, Joe’s handelsbank, etc to approve of this transaction if I do it ter dollars.
This is ok but at each step someone can be untrustworthy. They are all humans, even the government (humans subtly influence the price of the dollar and also share details of the transaction with unfriendly parties (the IRS)).
Also, each step ter the above has a transaction cost. So inflation is built into the system.
If this were a bitcoin transaction, enough miners need to approve that this transaction is valid. So even if a few miners are not trustworthy, the bulk of them will be and wij can trust that the transaction inbetween mij and Joe is legit.
[This process is complicated. Suffice to say, it works on Bitcoin and any other “legit” cryptocurrency.]
This is the ENTIRE reason for cryptocurrency: avoid governments, borders, middlemen, reserve transaction costs. Spil well spil have high security and avoid forgery.
(there is another reason for cryptocurrency, which is to do more complicated transactions that wij can call “contracts” without lawyers, etc. This reason is sometimes the ondergrond for legit ICOs).
Imagine the history of money. Money is used spil a store of value OR spil a way to transact without having to use a barter system.
Very first it wasgoed the land you wielded and the resources you developed on that land (wheat, grains, etc).
Then it wasgoed metals. Gold, silver, etc. You traveled with it by fashioning it into jewelry. Too much gold = tighter to travel.
Paper currency. Backed very first by gold but then. faith ter Heer (“ter Heer wij trust”) or government. (Or a pyramid. with an eye ter it. )
Electronic currency. Lightly transportable. But transaction fees all overheen the system. Zero privacy.
And the next generation is Cryptocurrency. Lightly transportable, little to zero transaction fees, no human intervention inbetween payor and payee, high anonymity, and even functionality.
Money evolves, like anything else, and the natural evolution of money is always spil a store of value that is lighter to budge, more secure, and more private.
Transactions have the same history. And the same issues. How can you transact across a far geographic area with less fees, less costs, less chance for human error, higher security and privacy.
A natural evolution leads go crypto-currency.
Theism ==>, Humanism ==>, Data-ism
Think about every industry ter human history:
Theism: A country programma on going to war would make sacrifices to their gods. Would beg. And would capitulate to the fact that whosever maker wasgoed stronger would win.
Humanism: More people, more bullets, more human intelligence, equals the winner ter a war.
Data-ism: This is the war being fought every day right now. Wij witnessed lil’ snapshot of it with the election but it’s only a snapshot ter a ten year long movie.
The war is on every single day. It’s fought ter every country. It’s fought with gegevens and hacking and piracy.
Theism: Shamans and priests would beg for health or do rituals to enhance health.
Humanism: The doctor knocks your knee, puts forearm on head, take two aspiring and call mij te the morning
Data-ism: Bloodwork, DNA work, robotic surgeries, fMRIs, Catscans. Statistical matching with massive database of similar scans to do diagnosis. All medicine is kicking off to be outsourced to gegevens.
Theism: “Te Schepper Wij Trust”
Humanism: Let’s throw a Voorzitter on there. Let’s get the signature of the Secretary of Treasury up there. “Don’t worry, wij’re good for it.” While wij print a few trillion without telling anyone.
Data-ism: The natural evolution: Cryptocurrency.
Does this mean Bitcoin is “The winner”. Buy bitcoin?
Ideas for a world out of balance… sent straight to your inbox!
My aim is to supply to you a fresh perspective…
Something to help you make sense of the puinhoop.
Sign up below for Altucher Confidential, my tell-all FREE weekday e-letter.
By submitting your email address, you will receive a free subscription to Altucher Confidential. This daily investment newsletter produces free independent financial forecasting and commentary along with cautiously selected products and services that wij think might rente you. Wij will not share your email address and you can unsubscribe at any time. Privacy Statement.
No. It just means the natural evolution of currency is arriving and nothing will zekering it.
The basic philosophy is:
– Decentralized. So no one government entity can calmly mint money for their own purposes and have access to your transactions, accounts, etc.
– Security. So nobody can forge or steal your money.
– Privacy. Your transactions can’t be seen and reported to other entitles.
– Functionality. This is the more technical parts of the blockchain ter Cryptocurrencies but suffice to say some of the “intrinsic value” of a coin is the functionality and computational power used to “mine” that functionality.
There’s not going to be ONE winner.
Just like there is not one paper currency (or metal currency). There’s dollars, Euros, pesos.
The difference is: those currencies have geographic borders.
Cryptocurrencies have “use” borders. ZCash might be used by people requiring higher anonymity. Filecoin might be used by people requiring decentralized storage. Dash might be used be people requiring quicker transactions.
The borders are created when more problems are solved. Which is a true innovation for currency.
Spil opposed to borders (and supply) being created by geographic boundaries, central banks with secret control, or a gold mine down the block.
With Bitcoin, a list of transactions is sent out to the network te the form of a “block”. Miners, who are leisurely paid te more bitcoin up to a maximum of 21,000,000 validate a transaction.
If a transaction doesn’t make it into a block (on Bitcoin) it waits a certain period of time to get into the next block.
This means it might take more time (a problem).
Another problem is that everyone can “see” the transaction on what is called the blockchain. They can’t see who it wasgoed but they can see the size and other details. (a problem).
Sometimes software can provide a solution (a coffee shop can say, I’ll verify the transaction anyway and trust that ter ten minutes I’ll know for sure and there’s not a loterijlot of risk te this).
But a software layer involves humans and human error and human “evil”. Hence there are scammers and Ponzi scheme and theft (just like with paper currencies).
The good news is thesis are problems that can be eliminated.
Just like Internet software since 1991 solved (albeit always improving) the problems of speed, security, transactions, privacy, more functionality, etc think of cryptocurrencies spil the “Internet of Money”.
Thesis problems are being solved.
Either with fresh currencies (examples: Ether, Dash, filecoin, etc) some of which may be scam currencies, others may be legit. Time and research will tell (just like with the Internet te 1995). OR with “forks” ter currencies, like what is happening today with Bitcoin and Bitcoin Contant.
SO WHAT IS BITCOIN Specie AND WHAT SHOULD I DO?
Bitcoin Metselspecie attempts to solve the problem of how can I buy a cup of coffee with bitcoin without using the software layer of Bitcoin.
Reminisce, if a transaction doesn’t make it onto a block that is then sent out into the network to be validated, it has to wait.
Bitcoin Specie is simply the same spil Bitcoin, except it increases the size of a block from 1MB to 8MB. Hence, swifter transactions.
The reason that many exchanges are jumpy about this “hard fork” is:
A) it’s never happened before. So there could be the possibility that wise developers can find a flaw ter the process and steal money.
B) A “fork” is similar to a human election. Wij had a choice inbetween Clinton and Trump and forked to Trump (not an precies analogy but rough).
Bitcoin is designed to limit human involvement spil much spil possible because all humans have different agendas.
For example, perhaps China is greatly te favor of Bitcoin Contant because they presently have a thick edge on mining and they will be able to amass a large amount of Bitcoin Contant before others can.
So the fallout of Bitcoin Specie, while very likely onberispelijk philosophically and from a software point of view, is still unclear from a human point of view.
Same for the development of any fresh cryptocurrency (albeit all fresh currencies need scrutiny on the software side spil well). But this fork is a bit more intense because Bitcoin is so big and it’s the very first time this has happened.
This leads instantly to some logical conclusions:
What to do right now about Bitcoin Contant and August 1:
A) eliminate your bitcoin wallet from exchanges and store it ter cold storage. If you google “cold storage” you can see step by step how to do that.
B) If Bitcoin crashes 20% overheen the next few days because of this fork, I’d be a buyer. The philosophy of Bitcoin remains the same, it’s still the thickest, and volatility only creates chance.
C) If Bitcoin Specie goes up too much, I’d sell or sell brief, only because wij don’t truly know how people should value it.
Cryptocurrencies are going to be volatile for awhile. So te addition to the basic chance (Cryptocurrencies taking overheen all currencies) there is many extra trading opportunities due to the volatility.
Very first, back to the basics:
Why does volatility create chance?
Because it’s zonderling that intrinsic value switches very quickly from day to day.
Example: Wij know everything there is to know about McDonalds and 1000s of analysts research the company.
The intrinsic value of McDonald’s will almost certainly never go down 20% ter a day. But if the stock went down 20% te a day (example: a 9/11 event occurs causing a mass fear selloff across all stocks), then MCD becomes a value buy because the volatility exceeded the normal switch te value.
If you can identify the Cryptocurrencies that are legitimate and not scams, then you can make a lotsbestemming of money playing ter volatile situations ter Cryptocurrencies.
A) Cryptocurrency philosophy is valid and not going anywhere and is a natural evolution te:
a. the history of money from bartering to coins to paper money to gegevens money
b. the history of every industry from theism to humanism to data-ism.
B) Volatility is enormous spil people determine what coins are real and what aren’t.
Thesis are the basics.
I wrote thesis basics around the circumstances of the event happening today: The bitcoin fork.
But I also want to start helping the many people who are being scammed by all sorts of schemes and layers of schemes that are attempting to sigaar people into buying or trading cryptocurrencies that can be potentially worse than giant Madoff schemes.
The evolution of money, and the evolution of every industry, strongly imply that Cryptocurrencies, very likely te many forms, will be te our future. And will predominate the money supply at some point.
And how wij get from “here” to “there” will be paved with many lucrative opportunities.
But I wasgoed burned slew this type of chance ter the 90s and ter the 00s and I don’t project on doing so again. The solution is research, diversification, building a network of intelligence people who understand all the relevant issues, and then making wise allocation decisions.
If you like this article and would like more on Cryptocurrencies you can let mij know te the comments.