The buzz word, crypto currency, has secured a foundation in the human psyche flooding our mind with the new American dream of overnight wealth, in a new world where the tangible is less valuable than the digital. I was moved to express my thoughts on this exciting movement after watching MicroStrategy CEO, Michael Saylor, layout a future for BTC which is clouded in uncertainty; an investor’s nightmare. Mr. Saylor when asked on CNBC, “Do you see BTC at a 1 million per coin someday” responded, “The big idea is that every currency in the world collapses into the US Dollar Stable Coin, which will be the universal medium exchange for the world.” Michael continues, “What do I expect, If BTC doubles every year by the end of the decade it will have flipped gold… and emerges as a $100 Trillion asset class; a 100x from where it is today.” High expectations to say the least but plausible, let’s examine the data.
In 2009 inventor of BTC, Satoshi Nakamoto, an unknown man, most likely an alias, introduced the world to digital currency; decentralized, peer to peer electronic cash system, with transactions recorded on the blockchain, transparent. 2010 May recorded the 1st physical use of the currency when 10,000 BTC coins were exchanged for 2 Papa John’s Pizzas, “A Giant Leap for Mankind!” This new money was not backed by a government or by a physical asset such as real estate but on technology, trust, and math. For the 1st time in modern history men and women did not need to go through a middle man, a banking institution, to get permission to use their make believe money with interest and rules to exchange goods and services. When I was first introduced to BTC, my immediate response, No Way the FED will allow this but the genie is out of the bottle so to speak.
Bitcoin has market cap of $1 Trillion today and although Gold is at $10 Trillion; the digital coin has bulled from a cap of only $232 Billion in December 2017. This when BTC spiked in both pop culture and astounding gains reaching just under $20k per coin; setting the stage for a currency revolution. Individual states within the Union have experimented with their own forms of currency but with little success, the transformation of easy access peer to peer electronic tokens has the capacity to lift up emerging markets and help humanity see its potential with the participation of “bench players.”
With a finite amount of gold, 200,000 tons already mined, and a remaining 50,000 tons estimated in the ground it’s evident, who has the gold makes the rules. But digital gold, BTC, is accessible to the common man still in this early adoption phase. Only 21 million BTC will ever be mined, period, which is controlled by the “timed” halving’s. Every 4 years the rate paid to miners for running the blockchain and mining is cut in half. For example in May 2020, miners went from 12.5 BTC per block to 6.25 BTC per block. This cycle will continue until 2140 when all Bitcoin are released. BTC is considered a deflationary asset, meaning you can buy more goods or services tomorrow with the same amount of money you have today.
The opposite could be said about the reserve currency of the world, the US Dollar. Since its birth, the Dollar has lost 96% of its value! Why is a belief in a digital tender so hard to wrap one’s head around when the fiat paper we carry is only backed by faith, Not Gold or Silver? When banks only need to physically hold less than 10% of deposits, the amount of greenbacks in circulation since 2008 has almost doubled, over 50% of average American’s can’t afford an unexpected $500 bill, and so that “American Dream” I was sold is way dead. Keeping up the Jones’s, on credit, has an indentured servitude feel to it. Yet we haven’t had an audit of the FED or counted our reserves in Fort Knox since 9-24-74.
In February this year Mark Cuban said, “Gen Z value digital goods more than anything, other than maybe a house, maybe a car [and] their phone. After that, it’s digital. They’re going to respect something that’s digital before they buy something that’s physical.” This may sound like lunacy to someone over the age of 30 but a reality to a generation that didn’t need to wait for Saturday morning cartoons. They have never felt a gold bar but a fraction of a BTC token in their Coinbase account has more validity in their reality.
The adoption by financial entities and firms established in banking, investing, and lending, have a fear of missing out and aren’t waiting for government to regulate an enemy of the status quo. They’ve hedged their bets and even though they were behind the curve, they’re adapting, learning, and believing. We can mention the price surge of BTC but I see that as irrelevant because the evolution of a “true” free market is evident. The idea of needing “them” has been broken. We are the one’s we’ve been seeking, to quote the 44th.
Asia and Africa are the hot spots for economic growth but the citizens there lack banks and credit. The undeveloped world no longer needs these institutions with the innovation of the smart phone and digital currency. They can simply point, click, send, or receive a digital medium of exchange with no fee, hassle, or regulation. Just free men and women going about their business. With only 10% of US owning gold and 22% owning a share of BTC there’s no need for a graph. Barring any unforeseen cataclysm, it seems “tangible” that BTC does replace gold. Looking at it from a park my money, a store of value perspective, Mr. Saylor affirms, “It transfers at the speed of light, the maintenance cost is much lower, and the custodial rights much higher.” Time is running out for early adoption, if you’re not educated and invested in the future, when would NOW be a good time.
Michael Saylor https://www.youtube.com/watch?v=QUgimEJtQw8
