Bitcoin! (Part 2)

Scene 1.

It is a dark and shadowy night. The camera slowly pans out to reveal a man seemingly lifeless on the ground. Slowly he raises his arm, looks into the camera and whispers…

“”S…save me…”

He drops his arm, and there is silence, scene fades to black.

EXACTLY how I feel – working like a DOG and being pummelled left, right and centre until I’m left in the GUTTER.

Personally I don’t mind the stress once in a while, until you start to feel like this:

I’m fortunate to have writing as an outlet which is why I’m so very grateful to you for your continued support and feedback – couldn’t do this without you guys!

Following on from my earlier post on bitcoin, MrsFrugalSamurai-to-be asked me whether she should get involved.

“Hey, should I buy some bitcoin”, furiously typing on her phone as she asked the question.

“Well my dear, let me tell you about bitcoin and cryptocurrency in general. You see based on my research I believe…”

“BORING – too late, I already made some money while you were talking gibberish”

SERIOUSLY.

Get treated like a doormat at work, get treated like a doormat at home, might as well just lie down and accept fate.

For those of you interested in what I said to MrsFrugalSamurai-to-be, here it is:

Bitcoin isn’t doing what it’s meant to do.

Bitcoin was founded as an alternative way to transact for goods and services.

It was created as an alternative currency to say F U to the man, here is a currency of the people, by the people, for the people.

MrsFrugalSamurai-to-be stopped listening to me and started to open an account.

But apart from a few notable transactions in the earlier years rampant speculation and price growth has seen bitcoin used as an investment vehicle instead.

It doesn’t make sense to buy using bitcoin when neither the buyer nor seller can confidently predict the price of bitcoin when a transaction is exchanged. Not yet anyway.

Bitcoin has limited supply.

Bitcoin has a finite supply of 21 million. Currently it’s estimated there are around 16.6 million bitcoins out there, so in order to “find” new bitcoins you have to “mine” them.

In the very early days you and I and our trusty home PC could do the job of mining bitcoins easily – these days, the amount of energy, power, capability and cost involved with mining bitcoins means only the very dedicated and state-of-the-art facilities make mining worthwhile.

If it costs $30,000 to mine 1 bitcoin worth $20,000 – well… why bro? Just pay $20,000 for it instead.

MrsFrugalSamurai-to-be got up to wash her hands – I continued on, raising my voice so she could hear me over the running water. 

40% of Bitcoin is held by 1,000 users.

The other 60% is held by 15 million others.

That’s a serious amount of weight these 1,000 have. Any stake that big controlled by so few would mean that the majority of bitcoin holders are at the whim of any of the big players. Should they decide to sell a portion of their holdings, it can seriously move the price. Given the astronomical gains of the last couple of years, you wouldn’t put it against them to cash in.

There will be a few die hards in that bunch I’m sure, but at the end of the day its all about buy low, sell high right?

Illiquidity

Don’t just take the price at face value – much has been said about the numerous middle-men who at certain times…

At this point, MrsFrugalSamurai-to-be placed her first trade. I, of course was oblivious and carried on talking…

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P.S. Every post is the personal opinion of yours truly – I’m pretty smart I know, but sometimes not THAT smart you know?