I am very keen on Bitcoin, I was not in the beginning as I thought it had shortfalls. I was right about that, it does, I was dead wrong about these being an issue though. The bitcoin community is growing fast, the need for systems like this are beyond question now.
I constantly hear, ‘how much is it worth now?’ and read about speculation and buy/sell advice, it’s at the same time exhilarating and annoying. Bitcoin is a trading mechanism that allows people to transfer a service or goods across the world, without borders. At this moment you can live in bitcoin and increasingly so every day. You can send money to family, somebody in need or simply to buy something you need or want. It accomplishes those tasks quickly, cheaply and without fear.
We are entering a new world now, not one that requires regulation to bend it back into the shape of the old world (the one with the collapsed financial system). This new world is the world the Internet has led us towards. One of the Internet’s greatest gifts so far has increased transparency and highlighting inconsistencies in our culture and governance methods.
This won’t stop, just as people became educated after the Gutenberg press, so they have as the Internet grows. There is no stopping education, it becomes part of our psyche and cannot be unlearned. I see bitcoin in this vein, the cat is out the bag now, there is no going back.
When I say bitcoin, I don’t mean cyber currencies, I actually mean bitcoin (the protocol). I still believe there are deficiencies with privacy, scalability and security, but I am more convinced than ever these issues will be solved. They are more than certainly solvable. It may be a bit like the 20-year-old broom, it may get several new shafts and some new heads, but it will still be bitcoin.
So back to the premiss of this short piece, the price of bitcoin in dollars, or pounds or euros etc. why does it not matter? The answer is clear when we take a step back and think, does the price of a euro matter to an American getting up going to the shops and receiving a paycheck ? no it does not. It may affect inflation etc. in his country but that’s another story, people living in a currency do not really care what other currencies cost as it does not affect their daily life (directly and immediately).
As bitcoin grows and more people enter the cost of entry seems higher, this is not the case, the point is just enter at any cost that happens to be the cost of getting away from fiat currencies. Get into bitcoin and maths based currency, if you give to a charitable venture in bitcoin it will not get turned into an AK47 and put in the hands of a child soldier. It won’t furnish the house of a money moving banker and it will not even pay the salary of some charity chief executive. It will in fact leave your wallet and deposit immediately into the venture of your choice, whether that is buying a shovel for a farmer, food for a child, medicine for a village etc. You for the first time can see your gesture being received, get thanked personally and sleep well knowing you never funded any of the listed ‘charity sink holes’ mentioned. Some other things you can do immediately:
- Start a business, create coloured coins, get backers and your off, immediate, irrevocable and solid.
- Sign a contract and allocate a satoshi to it on the blockchain, now we have mathematical notaries.
- Pay your staff in bitcoin either directly or via https://bitpay.com/bitcoin-payroll-api
- Buy stuff all over the world http://coinmap.org/
- Buy and sell on many markets on-line.
This will not reverse and the key is to immerse in the community, it’s not simple today, but it will be simper tomorrow! The early adopters (and it’s very early now) will have a little pain, but the rewards of early entry may be substantial indeed. You may become a little more wealthy, but more importantly you will be living in the next version of society, society 2.0. In society 2.0 you will not care how many dollars buys a bitcoin or piece of a bitcoin, it simply wont matter.
Bitcoin helps us with money, but what about an even more valuable (or arguable as important) asset we have as humans, data and knowledge? This is for another post but for now check out MaidSafe 🙂 Society 2.0 cannot have thoughts and dreams stolen and spied upon, it’s as illogical as manipulated fiat currencies.
It is going to take a while before the supply/demand ratio is high enough to warrant natural pricing. If I was to walk into a store to buy eggs, I do not know how much to spend on eggs without comparing price of eggs in several places. If I am being paid in dollars then I need to compare egg price in dollars to egg price in bitcoins to decide which eggs to buy.
I agree with you on the premiss, but I do think the timescale is a logarithmic one. I am not sure as humans we ‘get’ exponential growth. The internet is a good example, so were phones and faxes. One minute these things were known and the next irreplaceable (for a period). I think things overtake our senses and early adopters have an ability to jump on and profit.
This is good as it means the wiser risk takers of the species benefits and wealth should swing back round to the smart people. This helps us move forward. The finance industry though has squashed innovation for so long there is definitely a tough hill to climb though, I do agree with that.