When Asked What Do I Think About Bitcoin…

I start off by saying the technology (blockchain) behind it is impressively forward-thinking and when applied to the concept of cryptocurrency — like Bitcoin, the more popular among others — it seems impressively convincing.

I am not too critical of people who invest in Bitcoin or any other cryptocurrency. Everyone is entitled to their own pursuits of prosperity through curiosity and faith. Evidently there is a certain degree of risk involved, and I too engage in such risks which could result in substantial or total loss.

What I do to mitigate that risk is consider how much I can afford to put up and am comfortable with losing. Even that can be unsettling so I go another step further in contemplating an exit strategy. For example a 100% gain is relatively as impressive as a 500% or 1000% gain in that this is rarely achieved in any investment with time being a factor — for example with a longer timeline a greater reward would be expected in my exit strategy. Setting limits to stop loss or realize gain is absolutely prudent, and gaining back your initial investment along with costs and some profit is a good idea, and even better, reinvesting a portion of gains would be even more prudent. Letting it all just ride seems irrational and would just be a condition of greed at that point.

However, this leads to where I am somewhat critical of Bitcoin’s haphazard premise. Some of the outlandish notions that drive its appeal seem willfully ignorant. It is very clear to me that the mobocracy behind it plays an outsized role in that collective anarchistic appeal, which ultimately causes the gyrations in value of Bitcoin. Bitcoin has no intrinsic value. Its utilization as a completely non-asset based and intangible replacement to fiat currency seems far-fetched enough to be absurd or counterintuitive when it is predominately obtained only by said fiat currency.

The endgame

Apparently, the math works, the calculations behind Bitcoin (its blockchain) is sound. The ownership concept is nuanced to say the least and the theorem is quite complex. There is no central bank or repository, the stored value seems to reside with the computational work of miners who confirm transactions to form a block that proves there was no double spending — falsified or duplicated. The block chain is the public ledger. The incentive is said to be 25 Bitcoin

Although Bitcoin has Dutch tulip craze-like tendencies, I am not willing to go as far as saying Bitcoin is a fraud. I see potential on the spectrum of good and bad. Elements of fraud are being fed into it — hacking, scams, and imprudence with the exchanges or access points have obstacles much like the ones that fiat currency faces with centralized banks and its intermediaries.

It seems only time will tell how the adoption of cryptocurrency will prove beneficial to all earthlings. Right now it appears rather exclusive and discriminating, whereas fiat currency can land in the hands of those who are relatively poor and have no access to internet and technology, with Bitcoin and Ether, not so much.

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It appears the more that I write the better I perceive.

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