What Bitcoin forgot to tell you about Bitcoin

9 March 2018

So working in the finance industry I’ve started to attract the attention of worried people who continually bury their heads in the sand and those who are seeking a quick profit from what they envision me as an ASX shares tarot reader.  Especially in regards to a recent trend in what many consider the ultimate investment opportunity.  Bitcoin.

Ohhh here we go.  Another article among the already thousands about Bitcoin, its sudden rise and how your pizza delivery guy sold his entire net worth, invested into Bitcoin and now he is a multi-billionaire.  No, sorry to disappoint you.  The article I wish to share with you is the underbelly side of Bitcoin and what your pizza delivery guy forget to mention.

 

Bitcoin is almost 10 years old.
Despite what you might already know, believe it or not, Bitcoin is actually nearly 10 years old.  The initial conception is a bit hazy, mainly due to cryptographers and their hidden world on the dark web.  But once upon a time it was worth considerably less; in 2010 it was worth about 7 cents.

And here is where we all throw our hands up while eagerly shuffling in our seminar seats to inform the person next to us that we considered buying during this period.

Nobody actually knows who invented Bitcoin.
Have you seen those T-Shirts that show the name Satoshi Nakamoto, yes, he is said to be the actual marker of Bitcoin.  But the reality is that nobody actually knows.  The man on the t-shirt does exist and he was the name utilised from original emails from the original creator, when the reporter found him, he had no clue what Bitcoin was, interestingly enough though he did live only a few houses away from one of the original cryptographers.

Recent trips into daily news reading found me to discover an article yesterday that even mentioned the possibility of Elon Musk to be its original creator, he did look good in that suit I’ll admit.  Look I’m now also seriously considering that famous chef Gordon Ramsay is the one and only.  C’mon Gordon…I know it’s really you, confess.

Bitcoin was used to purchase drugs, firearms and more.
Before Bitcoin was regulated you could actually purchase drugs, firearms, stolen credit cards and more with Bitcoin.  How you may ask?  Well, you could take a trip down the silk road that’s how.  Because of Bitcoins controversial origins with the dark web and its concept for avoiding the modern banking system, an interesting gentleman called Ross Ulbricht decided to establish a website with various offerings on the dark web called the Silk Road.  You could transfer you money into Bitcoin and use Bitcoin to make the necessary purchase and have it posted to you, untraceable and delivered to you.  With bitcoin allowing for hidden transactions due to its blockchain system and the attached use of the dark web giving ability to anonymous web surfing it was a hidden world. As you could imagine this caused bold news headlines and eventually the silk road was closed by the relevant authorities soon after.  However it gave all the heads at the table an ‘eyes wide open gaze’ to what was now possible with cryptocurrency and what could be morally wrong, especially when misused.

Yea I know you, you are one of millions who thought their 14 year old son was just playing honest video games online and the following morning he received a percale for some so called gaming equipment.  In a positive note I guess it kept him off the streets.

Hackers have stolen millions in Bitcoin.

It’s great, it’s secure, and the pizza guy will never get robbed.  Alright I’ll stop insulting your pizza man.  But just know this, he might not be a worth as much as you think.  Many stories have now been written about theft of bitcoin.  A simple Google search will provide entertainment for the whole family.  $500 million here, $530 million Coincheck hack, $430 million from Tokyo, where does it end?  The world is in complete chaos!!, Gordon Ramsay c’mon now.

Well I guess if something is of inclining value then its value for attracting crime inclines as well.  That said, working in the financial industry, people still find it hard to contemplate that speculative investments attain speculative returns, like the potential loss from theft.  Look if you really want to purchase walnut trees from your neighbour’s friend’s in-laws sisters mother who you’ve never met but says it better than anything else then I would suggest maybe think twice.

 

Bitcoin miners are aiding global warming.

Look, just put down your ham sandwich and stop laughing at me.  You heard.  Bitcoin miners are aiding global warming.  Well according to recent statistics bitcoin miners are now consuming 0.13% of the world’s energy.  Honestly if you told me that statistic 10 years ago I would be laughing.  And to be clear, bitcoin mining is the process by which transactions are verified and added to the public ledger known as the blockcain.  Mining bitcoin to complete transactions with puzzles gives the miner a reward, in this case the reward is bitcoin.  So as for global warming, I guess it further verifies that humans are the majority of the cause.

In closing there are a few other items that I was considering on listing, especially the one where a known individual called me and found it largely difficult to contemplate that Bitcoin wasn’t an actual physical coin.  But I am now happy that you are ever more versed on the bigger picture of Bitcoin and perhaps one day I might eventually be discussing it with clients as part of their investment portfolios, but for now it’s great to observe the insanely volatile price on conjunction with their volatile emotions that coincide.

Hmmmm….I think I’ll order some pizza for lunch.

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