This article was triggered by a conversation I recently had in a hotel in Glasgow and it made me think that, as a 100% believer in where Bitcoin is going, I should explain my views more often.
I’m going to end this article with a link to a detailed article by Evander Smart that partly inspired this summary. If you want to really understand the importance of where Bitcoin is going and the journey it has had, his article is, in my opinion, a must read and if you disagree it'll entertain you.
If you find yourself getting a little down when you see the price of Bitcoin drop, or you get a little frustrated because it just will not get back over that $600 mark or the $700 mark you were sure it was going to transcend again, don’t worry, you just need a little pick-me-up. So here it is.
Bitcoin price drops are not only good for us but essential to its longer-term growth. Part of what any thriving economy needs is a very good reason to buy. If Bitcoin literally just kept going up and up without stalling this would not be good and motivation to buy would be harder.
Why? I hear you ask.
Because who wants to buy anything that keeps going up in price? If you are a speculator, investor, seeker of exotic ways to make money you are going to be inclined to buy Bitcoin when the price seems low. You aren’t going to buy when it seems high.
And, as an investor only, you are conditioned, as we all are, to seek value. In the absence of a real understanding of Bitcoin value you will fall back on traditional ideas of value and, thus, Bitcoin will be valued as any other basic commodity is valued based on normal market forces.
We don’t back off from buying gold when the price comes down do we? We are more likely to buy more of it in fact whilst we consider it cheaper and better value. And, in microeconomics, every commodity, product or service has to prove itself before the mainstream get behind it. Gold is there, Bitcoin isn't.
Translated to Bitcoin that means that it takes a huge amount of proof, influence and confidence to change the way a nation (let alone a planet) spends and uses money. When a large amount of the influence brought to bear is designed to kill something off then you are going to see resistance.
That’s inevitable. If we deal with Bitcoin in one of its many guises, that of investment vehicle, you can have a rich person’s mentality or a poor person’s – so which one do you want?
The rich person sees the price of an investment drop, buys while it is low, holds and then sells when it rebounds to a higher price. The poor person buys when it is high (having followed the rich into the market), panics when he sees the price begin to fall and sells. That is why the rich love the poor. The poor give the rich more opportunity to buy knowing that the poor will repeat the cycle and fuel the growth while taking the hit.
Which mentality would you prefer to follow?
I have a very simple philosophy, “I aint for turning” well, by which I mean I’m not a seller except on my own terms and I will not be manipulated. When I get a good deal, and I will decide what a good deal is, and when I am ready to sell, then I will sell, not before.
I refuse to be a sheep and follow what the sheep always do and that is get manipulated by the very wealthy and the very influential.
I recently spoke to a member of the press. He was giving me his opinion on Bitcoin and why it couldn’t possibly take off. I pointed out to him that it had already taken off and he should be more observant and there was more to come. It was clear that he wasn't listening to what i had to say, he just wanted to be the person making the most noise in our conversation. What I found stunning was that once I started to really listen to him and I got past his headlines, it was clear that he was completely and utterly ignorant of how Bitcoin worked.
And there I was staring at a prime example of why the sheep in this world will always get it wrong. They listen to whoever makes the most noise.
Let's be totally clear about Bitcoin. Any lesser investment than Bitcoin would have died a death years ago given the amount of bad noise, dirt, flak, disinformation and criticism that it has had thrown at it. They beat it over the head constantly but it will not lay down and stay down so, frankly, if you haven’t yet acquired confidence in this fantastic vehicle for investment and future income then you simply haven’t been paying attention or, perhaps more pertinently, you have been paying attention but to the wrong press or the wrong people.
Let us not forget that the banks, all of the them without exception, are scared of Bitcoin and what it could do were it to get past the fear barrier that they (the banks) and other parties interested in its downfall have erected.
All you ever hear about from them is the downside, the negative, the dishonesty (Silk Road, guns, drugs, dark web etc). And it is easy to make headlines around the idea that Bitcoin is somehow bad. Bitcoin is somehow insecure. Bitcoin isn't bad, it's simply coding. The people that use it for bad purposes - they are bad. The dollar bill isn't bad either, just the people that use that for bad purposes are.
The facts, the real facts could not be further from those down with Bitcoin statements. Bitcoin is as honest and as secure as it gets. Only outright stupidity generally leads to Bitcoin loss and you can't cheat Bitcoin, it is what it is and there will be 21 million of them.
No-one can make more. No one can just decide to print a whole new bunch of Bitcoin like Governments and central banks can do with cash.
And it is so much easier to secure Bitcoin than any other form of currency. Cash can be lost or taken. ID theft can be a plague on anything financial you own. But Bitcoin can only be stolen if someone has access to your Bitcoin wallet along with access to all layers of security you have attached to it. And they can;t target you by name because transactions between Bitcoin wallets simply use wallet addresses not names of people.
For example, to steal Bitcoin from me you would need to have my main computer and my mobile and err me actually, because part of my security is in my head. But of course Bitcoin, according to the press, fueled largely by banks is insecure. If I drop my credit card on the path on my way home, someone can pick that up and use it to make purchases online. If I drop a piece of paper with my Bitcoin wallet address on it - well good luck with that, it isn't going to get you anywhere.
So we should all use credit cards instead, right? Well that is what the banks tell us to do. And yet credit and debit card fraud is at an all-time high and still rising where it comes to remote purchases. I could write pages on that subject alone but in the interests of brevity you just need to see this image:
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