Bitcoin: An Update
People ask me if Bitcoin is a fad.
Not financial advice, but I've never thought Bitcoin was a fad. Back in June, when one Bitcoin was around $9,200, we published on our opinion site Illuminist my lone view that the pandemic could be just the freak disaster crypto had been waiting for, in essence. https://www.theilluminist.net/blog/covid-may-be-the-dystopian-black-swan-bitcoin-amp-crypto-needed-all-along
Today, with one Bitcoin above $23,000 each as of earlier in the day, and 24 hour trading volume above $20 billion worldwide according to coincap.io, it seems that theory may have had some legitimacy.
You see, COVID shatters the old establishment. The federal system, with its spidery surveillance and health agencies and countless well-fed bureaucrats, including very serious people in Washington who definitely don't cash checks from George Soros, and definitely never attend spirit-cookers or other weird occult bonding events - these folks somehow missed COVID, even though roughly half our productive wealth goes their way via taxes.
A new order comes in, millions of us are done with these failed bureaucrats, the end level boss that just will never get out of the way. Bitcoin was the perfect solution to a problem that had not yet come: a West shattered by a (poorly managed) viral pandemic economic perma-slide.
Bitcoin, the first cryptocurrency, the first of its breed, is also the easiest and fairest to understand from a game theoretic view, making it attractive even to some billionaires, as Bloomberg recently reported.
Only 21 million Bitcoin will ever exist, and about 18.56 million or about 88 percent of the total coin supply, has already been "mined" into existence by computers running the competitive mining software. Of that supply, experts believe millions have been lost forever, due to lost passwords, deceased owners, and lack of discipline during Bitcoin's early experimental years, when tranches of coins were occasionally sent to addresses without knowing the password, essentially burning those coins from ever being re-accessed or spent.
With PayPal now allowing users to buy/sell Bitcoin directly on its platform, making the world's first cryptocurrency available to more than a hundred million potential PayPal users and more than 26 million PayPal-accepting merchants, it's easy to see why interest in the rare crypto has rocketed in recent weeks and days.
And my gut instinct here is that the world at home, social distancing as per Lord Fauci's indefinite orders, has only metastasized a crypto awakening as people with discretionary income and little else to do other than read about crypto and central bank conspiracy theories dip their toe into Bitcoin waters, perhaps for the very first time.
And although other cryptocurrencies have done well in the wake of Bitcoin's recent rise, my (also) gut instinct and little more than that is that the first cryptocurrency on the planet by more than 2 years before any of its competitors launched will command a monetary premium since it is, truly, the best time tested and most accepted crypto to date. A simple capped mining economic structure may, over time, attract many users since it isn't difficult to understand. And although competitors such as Ethereum and Litecoin boast slightly faster confirmation times, Bitcoin's 10 minute average block time is a security feature, much like the watermarks on a paper check, not a weakness. A corrupted blockchain would be disastrous to Bitcoin's value, and so its creator indulged a particularly long confirmation time so that blocks would be mined with finality, it is believed.
When users in the West of the financial system want dollars, it's generally US dollars they want, not Zimbabwe dollars... and in much the same way, the crypto with by far the largest daily trading volume, Bitcoin, is likely to command more loyalty from the marketplace over time than smaller mined coins and knock-offs, although just my personal opinion and not that of the company's, necessarily.
In an uncertain world, as long as there's a functioning Internet and a marketplace for Bitcoin mining, there will be a Bitcoin payment network. And that is part of what is attracting so many in late post-apocalyptic 2020.