Bitcoin is too volatile for me: Stability is coming
One of my clients is a young guy around 30, a clever engineer who brought 3D printing into his company and saved them around 150 thousand a year. He owns several rental apartments and spends a lot of time adjusting his investments on the Helsinki Stock Exchange and nearly every session we have, he tries to advise his much older colleague on how to save money through a whole range of little loopholes he discovers.
A couple of weeks ago at the beginning of a class with a very smug look on his face, he said he had seen that Bitcoin had crashed and had lost 30 percent of its value. His smug look was the knowing look of someone that had been proven right because in one class where it was just he and I, I had introduced him to Steemit and had talked to him about how the cryptocurrency kind of works.
I answered, 'What are you talking about? It recovered by the end of the week and is up 5 percent at 4300.' This was when it dipped to below 3000 a few weeks ago.
"Really!" The smug look was gone.
I am no expert so I had told in March that with his interest in stock investing and a little help and research, he may want to consider putting a small amount into bitcoin or some others. I suggested perhaps 1000€ as I knew it was not going to be a problem for him if he lost it but, it would still be annoying because he is very frugal.
That was back when it was at $1600 and he chose to not look at it at all.
I reminded him that even when BTC had dropped 30 percent, he still would have been up around 90. At the recent all-time high, he would have been up about 350%. If between March and today he had bought near dips and sold near peaks, what would he have? I don't know because I am an idiot.
What I don't really understand though is why didn't he look into it? Why wouldn't he spend 10 minutes investigating what may be going on here? I think that this is a major issue for cryptocurrencies but it is likely one that is soon to end.
The problem is that real information is hard to come by for the average user and there are so many untrustworthy sources, scams and people dealing in FUD. Plus, a lot of the information and websites have the visual appeal of a 90s conspiracy site. For people that are coming from traditional sectors where information is delivered in a polished manner by UI experts paid by banks, the matrix style of information presentation seems untrustworthy.
My client, without investigating and only looking at the percentage ups and downs thinks that Bitcoin is too volatile and insecure. It is. But, that too is going to change very soon and unfortunately for the worse for most of us I think.
As the banks are buying in heavily, prices will boom and everyone that is currently in will benefit accordingly. The problem comes because those that are currently in the development sectors have failed to make handling cryptocurrency and blockchain easy for the average user not interested in the tech or interested in finding out, like my student.
The banks will make no such mistake however as they have hundreds of years experience roping everyday people who are unwilling or incapable of doing the research into a debt cycle. These are the same people that blockchain tech and Bitcoin were supposed to help break-free from the shackles of centralized currencies and banks. People like my client who puts his trust into a Stock Exchange and the government regulators.
This entry by the extremely big players will likely bring stability to the exchanges and will encourage more and more users from the averages to join in through the various funnels they create. For the Bitcoin and alt-coin early adopters, this will be a very wonderful time as they realise their investments and they will walk away handsomely. But, what will they walk into?
The Gross world product (GWP) is around 100 trillion per year. 100 trillion. Per year. That makes the 170 Billion current market cap of crypto look a touch insignificant. The groups that transfer and funnel this money to and fro across the globe are almost entirely banks and as they develop their investments, platforms and own blockchains, they are not going to do it so there is anonymity for the user and they are going to manipulate to maximise their gains like they have always done in the past.
The more banks buy-in with their current banking philosophy, the more controlled the average user becomes. The people who will likely walk away the richest are the ones who have created an immutable and unarguable information source for banks and authorities to track every instance of our lives.
But, even the rich who profited so handsomely will at some point need to integrate into the system in order to actually enjoy the fruits of their investments. And those will be exclusively owned by the banking networks as large companies are very unlikely to trust a group of people they recognise as 'hackers and anarchists' with running their business information and financial systems.
Each day we seem to be moving a little closer to bringing in average users and finding small ways to connect blockchain to the real world, and currencies to items but, it is slow. And when the big boys come into play, they do not move slowly, they do not care about freedoms and they will pay extremely well for those who can develop for them.
On top of this, many of the developments that are being made are replacement technologies that do not actually change anything in the real world. There is blockchain Twitter, blockchain Youtube, blockchain Instagram. These aren't new innovations, they are taking something old and putting it on the blockchain.
I am not a technical person but this is not going to attract a massive influx of average users as it brings no change for them in there day to day life except perhaps like Steemit, a little money.
In my ignorance, I see that the true value of the blockchain is to be invisible to the average user so they do not need to make some kind of revolutionary mental shift. What I mean is that it should be replacing the banking networks and backbones and wresting control away from the centralized big boys. It should be integrating itself into every day life seamlessly yet still decentralized so that average users can be secure from global controllers.
It needs to start solving the real world problems for normal people who believed that these things were unsolvable. It needs to show to the everyday person how much banks and governments manipulate circumstances for profit and control. It needs to prove that it has value beyond giving those in power, a more precise tool with which to divide it.
It needs to work out how to ease suffering, face poverty and wealth inequalities, improve education and encourage free speech and freedom of choice, place control back in individual hands, combat unemployment and oppression and spread the power among the people of the world so each of us has the chance to be our best.
The thing is, everyone wants a Lambo, the same as everyone on Wall Street.
A bit of a rant.
[ a Steemit original ]
I do not know much of the tech, the financial systems, the banks... I don't know much of anything really. What I do see however is this world is a mess and if we as the 'free' people are unwilling to truly do something about it, nothing is going to change except for a continued increase in the loss of freedoms.