Why BITCOIN might go 10x again in 2018?
The biggest question that is facing everyone is will the bubble last? and should I get in or not ? A huge FOMO or its even easier to dismiss it like a Tulip Mania or the DOT COM bubble or even a housing bubble. So let me break it down for my friends and family atleast, so that they can make better informed decisions.
First — Does it solve any real problem for the world?
Radical transparency — Bitcoin offers a radically transparent world where every transaction can be reported, tracked and evidenced including governments, charities and public cooperations. A global wallet registry can make the whole world way more transparent, sophisticated and very very safe.
Fail safe economy — Ever since the world has outgrown the gold standard, the national currencies have been susceptible to global economic shocks or wars. Bitcoin delinks the store of wealth from everything else including runaway inflation in any country or a banking collapse.
Homes for everyone — today a home serves two purposes, a place to live and a store of value. Bitcoin delinks the store of value from the utility of real estate, thereby making the whole system very very efficient. It will be easier for everyone to own a home or find a place to open a business.
Permanent Investment boom— by making the store of wealth more liquid and move away from real estate, the possibility of investments in business and creating jobs increases. When HNIs invest in business instead of real estate the world problems get solved faster with much higher job growth.
Global integration — with having a universal currency we create a more borderless world and a common world view. Bitcoin is a logical extension of easier and faster global e-commerce with less forex risks.
Unprecedented Automation— a global currency standard with smart contracts opens up a new level of automation to create new level of global supply chains that can be built by any startups.
Second — can BITCOIN be compared to other bubbles?
Fixed supply — there has been no bubble in the past that has had a absolute fixed supply. Bitcoin supply is fixed and hardcoded into thousands of computers across the globe.
Unique characteristics — No bubble in the past has had such a large and permanent public benefit.
Fungibility and divisibility — The bubbles in the past are not comparable due to the non-fungibility. Each bitcoin is completely similar, replaceable with zero difference. Its divisible upto 18 decimal places. Like, mBTC is $20 today. Bitcoin can only be compared to a currency.
Unprecedented global acceptance — there has been no bubble in the past that has been at a global scale. Bitcoin can only be compared to a global currency like USD or EURO but with neutral backing.
Prisoners Dilemma — Bitcoin has different phases of the game. A prisoner’s dilemma is bigger than fear-of missing out. We are not talking about just missing out of a movie or a startup investment here. The whole wealth game is changing. The dilemma is now playing at the institutional level. Very rapidly it will start playing at the nation state level. The country that jumps in last will loose the maximum gain.
Third — Can Bitcoin be stopped ?
Its a constitutional right — Governments around the world cannot stop it because it is a constitutional right in most countries to provide such freedom to trade. At best it can be regulated to prevent money laundering and illegal activities.
Why government will never block it ? — it is already giving unprecedented access to intelligence agencies globally to ween of the world from bad actors. It is mother of all regulations like FATCA and GATCA. All tax heavens and evaders will go transparent.
Its technically not possible — due to the design of the technology it is actually not possible to shut it down just like darknet, or bit torrent. Even if you shut down major mining rig the arbitrage between Bitcoin and electricity increases and incentivises the whole globe to jump in.
Its regulation resistant— its very difficult to coordinate 200 countries to shut down such a system. Any action taken against a bitcoin holder would make all other holders to jump out of the jurisdiction easily. It will lead to loss of wealth for any individual nation acting alone. On the contrary if citizens get wealthy, governments earn more tax and good for the economy.
No crypto-currency can replace it — the game theory does not allow the currency to be replaced. It’s called GRIM trigger equilibrium. Bitcoin will always dominate all currencies automatically.
What about the huge electricity it burns?
The forex markets today are also largely dependent on OIL. Since, the world is anyways shifting to electric cars and computer automation, it is natural for the economic order to completely shift to electricity prices. Infact, it may cause a mini solar-revolution and save climate change. Bitcoin mining is likely to become complete solar driven. It may fuel development of rural economies by making them sustainable with solar-mining. More adjustments will eventually emerge to ration the mining in the future and possibly become the basis of universal basic income.
Finally — How much can it grow?
Bitcoin and other cryptos are already crossed $0.5 trillion. If it does grow to the level it is designed to reach then it is not difficult to imagine another 100x increase even from a $20k level. You may consider it like a black swan even right under your nose. The revolution is a exponential phenomena caused by an unprecedented technology. It will continue to be denied by many people even after the whole revolution is complete. It is completely natural for people to not adjust to the new world order so quickly.
The classic mistake of all bitcoin investors
In most bitcoin conferences I come across people who booked profits and are afraid to get back in at a higher price again. You must know it is still extremely early days of bitcoin. Not even half a percent of people have ever bought bitcoin. For bitcoin to be the store of world wealth to make the world radically transparent — it will need to grow to $100 trillion. Will it go there? my bets are definitely on.
The new world will be radically more transparent, with no corruption, no tax evasion and completely borderless. That’s the real promise behind bitcoin.
Bitcoin is not a quick money scheme.. but a political grass root movement, where everyone is absolutely welcome. Share this with your friends and family too if you eventually want to have a rich circle of friends.
