Long (Live) Bitcoin?

By now, most reading this have at least heard of Bitcoins before. If not, here’s some reading material on it. Bitcoin (BTC) is essentially peer-to-peer payment system and math based cryptocurrency that has sparked tons of conversation about e-payments, credit fraud, a decentralized financial system, and lots of other things within a stones throw away from it.

I’m by no means an expert on BTC or cryptocurrencies, but I wanted to share some of my thoughts on it?

Economically, I think Bitcoin is the same as anything else deemed valuable. It follows the rules of pure economics which center around supply and demand. Bitcoins are “mined”. Miners can uncover more Bitcoins as a reward for essentially tracking and monitoring Bitcoin transactions. There is, however, a finite supply of them. At some point, there will be no more Bitcoins available to be mined.

The demand for Bitcoin is still (in my opinion) relatively low in comparison to where I see it potentially being in the future. I see it increasing in value once more retailers and merchants begin to accept it as a form of payment. Overstock and the Sacramento Kings were some of the early adopters. 

With tapered demand for it currently, BTC is more susceptible to extreme volatility (See: People’s Bank of China and Silk Road). Should a major retailer, say…Amazon or Walmart, bring on BTC as an acceptable form of payment, I see the value drastically increasing. As it stands, I think BTC better serves me personally as a means to cover a small debt owed to a friend over dinner. 

I finally opened up a Coinbase wallet today. I only put in a small amount of money. A small enough amount that I wouldn’t be heartbroken if I lost it all.

There are tons more questions that could be asked about Bitcoin:

  • What will it take for more major retailers to accept BTC as payment?
  • Is it really as secure as it’s described to be?
  • How quickly can BTC be transferred from P2P? (could it rival paypal?)
  • Who becomes the arbitrator in a payment dispute since BTC is decentralized?
  • Will BTC be used as a true currency? Or will it’s infrastructure be used as a secure exchange medium?
  • What would happen to the value of BTC should an attempt be made to regulate it?
  • Are more people currently using BTC as a form of currency? Or treating it as a stock and trying to buy low/sell high. 

I’m super interested to see where it goes. I think it has incredible potential. So am I LONG $BTC? I don’t know. I can’t really say. I’d like to think that in the future the value could increase dependent upon the widespread adoption of it as a currency. Adoption of it’s infrastructure as an exchange medium could give it some power too. I also don’t think it’s farfetched for it to tumble in value as a result of an attempt to thwart it in one way or another. I suppose only time will tell. Tell me what you think on Twitter