Happy New Year everyone! I hope this finds you starting off 2018 with a positive outlook and some much-needed rest over the holiday break. I thought I would cover some technology news and happenings that have caught my attention as most of the world in recent months. While here at Mission Repair our day to day activities rarely leave the scope of computer or mobile device repair. If you thought the iPhone in 2007 was revolutionary, you might want to learn more about “Blockchain” and what it represents. I will be doing multiple parts on the subject and hope you can find a bit of knowledge in my ramblings or simply enjoy the information presented.
If you watch or read any of the news lately Bitcoin and Blockchain are two words you probably have heard a lot about. What in the world is it? How does it work? That’s the real question of what could be the next really, really big thing in how money and information move around the world. I’m by no means an expert, but I’ve spent the last several month researching, educating and dabbling in some various means of Bitcoin and altcoin investing and mining. I heard about Bitcoin back in 2010 and knew enough then that it was something I didn’t understand well enough to pursue or invest in. OH if that darn crystal ball would have just made some noise haha. However, it never was completely off my mind and if it’s in the technology realm… I’m interested in learning about it.
First and foremost this is not a guide to investing, nor anything more than my opinions and knowledge thus far. So what is Bitcoin and why should anyone care about it? Bitcoin is a cryptocurrency, in general terms a digital form of currency. There are literally hundreds of cryptocurrencies currently trading on various cryptocurrency exchanges. They all have specific purposes and while some coins are just nonsense and will fail, others are purpose-built for say business to business contracts. Others are built for things like “in-app” purchases were all so fond of. Bitcoin, while it can be used to purchase things online it is viewed as an investment vehicle to store value/wealth.
So how is it different than a stock like Apple? First off it’s not a regulated by a formal government agency like stocks. Stocks have the (SEC) Security and Exchange Commision that monitors the overall market, think of them as the stock or Wall Street police. Before you just write off Bitcoin and other cryptocurrencies as some horrible thing that only thieves and hackers or criminals will use… consider this.
Bad things still happen on Wall Street such as insider trading, most notably Martha Stewart in recent years. Hardly a hardcore criminal but illegal none the less. Then you have the Ponzi scheme’s etc… Bernie Madoff ring a bell? He went to jail for a massive Ponzi scheme. Remember the real estate crash from the late 2000’s? JP Morgan was one of many investment firms fully knowing they were putting Americans at risk with subprime loans… which the US taxpayers bailed these firms out and did anyone go to jail?? Nope! So if you think “Wall Street” is the “safe bet”, well think again, it’s all risky. Anyone that tells you it’s a “sure thing” or there is zero risks is lying. Period. So does all this new technology have a risk? Absolutely. The real magic here is understanding and considering the impact the underlying technology (Blockchain) has and will have in transforming the banking and investing industry along with pretty much any form of payments made between people, business, banks, and countries worldwide.
So what is the “gold standard” for investing? Well, punny you should ask… 🙂 Why is gold widely considered the safest investment? I believe people find gold safe due to the fact you can physically hold a gold bar, lock it in a safe, bury it in your backyard or whatever makes you feel safe. Gold has been used for centuries as a means to store value. It can be transported, there is a finite supply and it is divisible by melting it down into literally any amount from grams to ounces or pounds. The stability is what’s attractive and the fact if you have a pure gold bar/coin etc… you can probably spend it nearly anywhere in the world. I’m sure there are exceptions but you get the idea. Universal currency so to speak.
How is Bitcoin similar? While it is a digital coin, you can, in fact, write down with pen and paper a series of passwords and numbers that you can physically hold in safe to restore your digital currency at a later date. Bitcoin is divisible by any amount and there is a finite quantity. There will be no more than 21,000,000 Bitcoins created/mined which is why by comparison to other cryptocurrencies it’s 17,000+ per bitcoin and could possibly reach much higher or end up back at pennies per coin. More on that in part 2…
Back to the security of things. Currently, Cryptocurrencies do not have a government “police” agency as they revolve around the Blockchain technology and the fact anyone and everyone can see the ledger and each transaction is verified by numerous computers (miners) around the world. Bitcoin is in simple terms checks to see if each transaction is “legit” and real by a very, very large mathematical checks and balances. The “cryptology” behind it all is described best in the link to “Blockchain” above.
I’ll leave you with this thought for Part 1: Nearly 1/3rd of the people on earth do NOT have a bank account. Something we take for granted. Digital currencies and this transformative technology can help bring currency and aid in so many aspects where the slow grind of government agencies have failed to reach people. You may be thinking how can they receive it without a computer or cell phone? Companies like Western Union and other “wire cash services” are already looking at and partnering with certain cryptocurrencies to enable access to money around the world and making it as easy as sending a text to help someone in need.
I hope if nothing else you can watch the news now and not be completely mystified as to what in the heck they are talking about. More to come in Part 2!