“WHAT THE HELL IS BITCOIN?” HERE’S MY “FOR DUMMIES TAKE” FOR THOSE WHO DON’T KNOW.
Okay, I’ve had several people ask me “what’s a Bitcoin?” Cause they hear everyday people starting to talk about it. Which is potentially the first bad red flag sign for anyone buying or selling it. As they say, “when people like your grocery checkout lady starts talking about investing in Bitcoin, real estate, etc., it’s time to get out.”😂
We’ll here’s my take, that I’m sure many who are trading Bitcoin won’t agree with. Bitcoin is what is called a crypto- currency that’s like the U.S. Dollar, accept it’s invisible. You have to see it with your mind, instead of your eyes. Baby-boomers and any prior generations will have the hardest time seeing this new generation currency in their mind. Cause they are use to a using a tangible currency.
It’s a currency made for and by the millennial generation who have lost trust in paper currency, which is created and controlled by the central banks. So Bitcoin is considered a decentralized currency. That’s it’s attraction. Ideally no one group controls it, which I find questionable. But all transactions are direct between a buyer and seller over the internet, digitally. No middleman other than autonomous computers are involved.
The Crypto Creators
Crypto’s were developed by software developers who use what are called block chains that are digital ledgers. Running on computers around the world, checking and balancing all cryto-currency transactions. Bitcoin is just one type of crypto, there are several others, just not as popular. Just like there are many different paper currencies around the world.
Once all transactions have been correctly checked, a token such as a Bitcoin is released into the market to be bought or sold by mining machines that operate in conjunction with these block-chain ledger’s. So I guess the block-chains would be considered to be like virtual accountants.
I know, sounds out there and confusing. It’s because, like I said, “you have to see it in your mind and not with your eyes. But let’s attempt to bring the metaphysical into the physical.
EXAMPLE: As we know, brick and mortar big box stores are going away, or at least becoming less needed. They were controlled by big companies and owned by wealthy families. These families are some of the wealthiest in the U.S. if not the world. So they basically had an iron fist control over the profits from the retail market.
Most people like you and me couldn’t afford to build or lease the prime real estate high traffic spots, these big box stores occupied. Therefore they could corner the market on wealth. But once the internet and an invisible retail online store like Amazon has come along, that central wealth controlling barrier has now come crashing down like the Berlin Wall.
A Decentralizing Force
So look at the invisible Bitcoin crypto-currency as if it were the invisible Amazon retail store. Because they are both wealth power decentralizing forces, that are destroying the ability for a few people to control the majority of the wealth in the world. At least that’s how I see it.
Amazon, when it comes to taking the power away from brick and mortar big box stores. And Crypto-currency like Bitcoin when it comes to the Wall Street Banks and the families that own them.
With crypto, there is little to no fees that a bank would normally charge, who is now cut out of a transaction between you and another person. That’s a major reason or sales pitch for why crypto is gaining more and more popularity. It’s more cost effective and less constricting. How many times have you used an ATM and paid a fat fee to withdraw your own money and asked to yourself, “Why am I paying such a high fee to use my own money? I know I have… And that’s the major why many people are turning to crypto. There are little to no fees. So I suspect this whole block chain ledger technology is going to be serious threat to the brick and mortar banking industry. Cause fees are how physical banks make their main dough.
The other and I think most significant reason crypto’s like Bitcoin are in position to win is because the U.S. Dollar is no longer actually money. It’s what’s called a fiat currency, since 1971, when President Nixon took the dollar off the gold standard. In other words there is nothing more of value backing the dollar like gold use to. So it’s sole value is now determined by consumer confidence.
Hence, the reason why crypto is gaining more use and popularity. People around the world are losing confidence in paper currencies, so they are losing value. Approximately 95% of the dollar has lost it’s value since 1971.
The Future of Crypto
This is what the crypto currency people who have been bitten by the Bitcoin Bug are betting the farm on. Crypto eventually supplanting the U.S. paper dollar and other world paper currencies. Which I believe will eventually happen. But it’s not going to happen without a fight and a lot of amateur investors losing a lot of money over a long period of time.
Cause the problem with crypto is that it’s a currency as well. And all currencies are designed to go down in value over forty years, which few people understand. It’s also backed by nothing. So it’s a very volatile market, meaning there will be many rallies and crashes before it maybe finds it’s place as the prime currency that everyone uses for buying and selling.
I will say this… What it has over the dollar is that at this time. It has been agreed between these software developers, that only so many of these crypto’s can be released into the market. That way it maintains some intrinsic value.
Granted, I know that’s not saying much. Because at one time, in 1944, what was called The Bretton Woods Agreement was put into law. Bankers from around the world agreed that only so many dollars could be printed and released in accordance with how many gold bars existed. So much for that.
God’s Money And Beyond
Well I hope some of you have a better understanding of what this Bitcoin craze is all about. I certainly don’t get it all either. Right now, all I know is I don’t trust anything that’s not real money, which is also known as God’s money. Tangible assets like gold, silver, oil and real estate, because you really can’t make anymore of it than exists. Which creates a natural intrinsic value that man can do little to manipulate, like paper currency.
But will see my blog friends. But I encourage you to first invest in your financial freedom IQ on crypto, before you invest in any currency like Bitcoin. That way you’ll have a better chance at profiting from it, or at least limiting your losses.
And I also recommend that if you are going to buy crypto, to wait until it crashes before you do. Cause more profits are made off crashes than booms.