It is actually quite funny that while the whole world blamed the banks for 2008 financial crisis, they continued anyway to store money in those same banks. They willingly pay hefty fees, and wait countless (certainly feels like that, no?) days for money to be transferred from one location to another. Although no bankers (I mean CEOs) were jailed from the crisis, at least something good came out of it. It was around that time when bitcoin suddenly appeared, and was rumoured to be created by a person called Satoshi Nakamoto.
Now that the price for each bitcoin hit US$5,000 it seems oddly appropriate to share my obscure story which I never thought I would end up writing. To me, bitcoins and cryptos were so obscure that no one wanted to learn about it, at least until now. Truth be told, I have seen bitcoins going from US$12 to US$70, and that was when I bought my first bitcoin. Crypto or crypto-currency as a word was not even invented yet, let alone being considered as an investment product.
Reason I could not get hold of bitcoins when it was at US$12, was that I could not find a seller easily, seeing that it was only starting to trend in the US back in the days. It was something rare and not really sought after. Today when looking back I regret not buying more. At US$70, it may have seemed like a bargain but back then it was considered a pure speculation. Today, at the time of writing, bitcoin selling at US$4600 may seem expensive, but perhaps in the near future may seem like an absolute bargain!
Low prices…never again?
I also had the privilege to first trade Litecoins, when it was trading around US$0.50, saw its meteoric rise to US$50, and falling all the way to below US$2.00.
The point is, we may never be able to predict the price of bitcoins, or any crypto-currency. The price will continue to rise if more users find use for it, whether as means of transferring value or retaining value. This write-up should not function as an investment advice, but merely a reminder that people will put value (or ‘money’) on anything they deem worthy. Involving in speculation has always been and will always be (at least for the foreseeable future), a human trait.
So you may have read about the 2 pizzas that were bought for a price of 10,000 bitcoins. “Goodness gracious!” – someone probably said in shock. Gone are the days when bitcoins were considered worthless. Now, we’re talking about mainstream adoption, financial instruments being created using bitcoins, and so on. Besides the meteoric rise in price, what could be the reason bitcoin is so widely used? Three main reasons: Privacy, Lower Costs, Speed.
Shots fired! Fintech are you listening? Okay, everyone listen too!
Think about it, if you are a fintech company, this revolutionary “invention”, which is probably more important than the internet, just turned your business inside out. The sooner you admit it, the better! While the rest of the VC world is partying away, and getting drunk on their own cool-aide that fintech is cool and growing, they have pretty much ignored the applications of crypto until this year. This was when ICO just came in and swept everyone in the industry by surprise. Even governments were surprised at how easy it was to raise capital – bypassing the banks and legislators. Maybe that is why it got banned in multiple countries. If no one can stop the rise of cryptos, what makes the governments think they can stop ICOs?
In closing, the whole world is ripe for disruption. Cryptos just made it 100x easier, and faster. Some saw the disruption coming, some did not. Some are still in denial. If it is so easy to raise, transfer and to store wealth, what then would be the role of bankers, investment bankers, accountants, auditors in the next few years? Will they suffer the same fate as taxi drivers when Uber just swept in like a hurricane?
Only time will tell, or you can just ask me.