Since it’s currently en vogue right now, I would love to announce I am launching my own cryptocurrency next week.
Let us call it “kingcoin.”
Nah, that’s way too self-serving.
How about “muttcoin”? I have always had a soft spot for mixed breeds.
Yeah, that is perfect – everybody loves dogs.
This’s going to be the biggest thing since fidget spinners.
Congrats! Everyone reading this’s planning to receive one muttcoin when my new coin launches next week.
I am going to evenly distribute 1 million muttcoins. Feel free to spend them anywhere you like (or wherever anyone will accept them!).
What is that? The cashier at Target said they wouldn’t accept our muttcoin?
Tell those doubters that muttcoin has scarcity value – there will only ever be 1 million muttcoins in existence. Furthermore, it is backed by the full credit and faith of my desktop computer’s eight GB of RAM.
Also, remind them that a decade ago, a bitcoin couldn’t even buy you a pack of chewing gum. Now one bitcoin can buy a lifetime supply.
Plus, like bitcoin, you can store muttcoin safely offline from thieves and hackers.
It’s basically an exact replica of bitcoin’s properties. Muttcoin has a decentralized ledger with impossible-to-crack cryptography, and most transactions are immutable.
Still not convinced our muttcoins are going to be worth billions in the future?
Well, it is understandable. The point is, launching a new cryptocurrency is a lot tougher than it appears, if not downright impossible.
That’s the reason I believe bitcoin has reached these heights against all odds. And due to its unique user network, it will continue to do so.
Sure, there have been setbacks. But all of these setbacks has ultimately resulted in higher prices. The recent sixty % plunge is going to be no different.
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The Miracle of Bitcoin
Bitcoin’s success rests in its ability to create an international community of users who are either happy to transact with it now or even put it for later on. Future prices will be influenced by the pace that the system grows.
Even in the face of wild price swings, bitcoin adoption continues to grow at an exponential rate. There are twenty three million wallets open globally, chasing 21 million bitcoins. In a several years, the number of wallets are able to rise to include the 5 billion people on the planet connected to the world wide web.
Sometimes the new crypto converts’ motivation was speculative; other times they were seeking a store of value away from their own domestic currency. In the last year, new applications such as Coinbase have made it even easier to onboard new users.
In the event you haven’t noticed, when people buy bitcoin, they talk about it. We all have that friend who bought bitcoin after which would not shut up about it. Indeed, I am guilty of this – and I am certain quite some readers are too.
Perhaps subconsciously, holders become crypto evangelists since convincing others to buy serves their own self-interest of increasing the value of the holdings of theirs.
Bitcoin evangelizing – spreading the good word – is what miraculously resulted in a price ascent from $0.001 to a recent price of $10,000.
Who could have imagined that its pseudonymous creator, fed up with the global banking oligopoly, launched an intangible digital resource that rivaled the value of the world’s largest currencies in under a decade?
No religion, political movement or technology has ever witnessed these growth rates. On the other hand, humanity has never ever been as connected.
The Idea of Money
As an idea was started by Bitcoin. To be clear, all money – whether it’s shell money used by primitive islanders, a bar of gold or possibly a U.S. dollar – started as an idea. It is the idea that a network of users value it equally and would be ready to part with something of equal value for the form of yours of income.
Money has no intrinsic value; its value is purely extrinsic – just what others think it is worth.
Take a look at the dollar in your wallet – it’s just a fancy piece of paper with an one eyed pyramid, a stipple portrait and signatures of men and women that are important.
In order to be useful, society must view it as a unit of account, and merchants must be happy to accept it as payment for merchandise and services.
Bitcoin has demonstrated an uncanny ability to reach and connect a system of millions of users.
One bitcoin is only worth what the next person is willing pay for it. But if the system continues to grow at an exponential rate, the limited supply argues that prices are only able to move in one direction… higher.
The Bottom Line
Bitcoin’s nine year ascent has been marked with enormous bouts of volatility. Therewas an eighty five % correction in January 2015, plus several others over sixty %, including a colossal ninety three % drawdown in 2011.
Through every one of these corrections, nevertheless, the network (as measured by number of wallets) continued to expand at a fast rate. As some speculators saw their value decimated, new investors on the margin saw value and became buyers.
The abnormal levels of volatility are actually what helped the bitcoin network grow to 23 million users.
Hey, maybe we only need a certain amount of price volatility in muttcoin to attract new users…