The world feels fairly surreal sometimes. I watch the relentless rise in price of bitcoin, ether, litecoin, and brethren, and feel it’s just a truly weird moment we’re living in. I’ve never seen assets rising 1000% of, in ether’s case, 5000% in a year. It’s crazy.
Alongside this, I see exchanges being hacked on a regular basis – the latest being Bitfinex – and ICOs appearing and disappearing almost everyday – the latest being Configo (some sort of con anyway) – and I feel a little confused. Or am I?
Actually, I just had this idea recently that it’s the circle of crypto, a bit like the circle of life but with money. Real money. In the circle of life, you have the death of the old refreshed with the birth of the new. With the circle of crypto, you have the death of old money with the birth of new. In this case, real US dollars, euros and yuan are being replaced with bitcoins, ether, and monero.
You see, ignorant people who have no idea what these cryptocurrencies are, are now plying all their savings into buying the assets because they’re seeing 1000%+ rise in their value. But their value is only rising because millions of people who have no idea what cryptocurrencies are plying their savings into them.
Meanwhile, you’ve got a lot of geeks, nerds, and technologists, who had large numbers of these cryptocurrencies in their earliest state. These are the guys who had 1,000 bitcoins for $2,000 at the start of the decade. They now have 1,000 bitcoins worth $6,000,000. Great. For these people, if they take $60,000 out of their bitcoin wallet and put it into Configo, it’s no big deal. And if Configo folds and disappears with their $60,000, that’s also no big deal because (a) they still have $6 million worth of bitcoin and (b) for every Configo that disappears there’s a lot of other decent ones out there, that are likely to return a further $6 million or more over the next years.
