One Bitcoin will equal $30,000 USD by Christmas, that was the predicted value prophesied by crypto-pundits. And guess what, they were wrong. I wasn’t surprised, even after it climbed back to $4,000, I knew it was going to be short lived. You might be wondering how I knew. Let me share with you a story about Pokémon cards. Before kids were addicted to cellphones, they were addicted to Pokémon cards. When it first came out, it quickly became the biggest craze the world had ever seen. Kids demanded their parents to buy it for them making the Japanese creators boat loads of profit. I remember talking with friends and shop employees about the value of certain cards, some worth $25 while rarer ones allegedly worth over $100. You may be thinking, a hundred dollars for a shiny foil card?
Why don’t you ask the same question for bitcoin?
Consumers treated these cards as if they were made from gold. I recall of how careful my friend’s brother handled them while he negotiated a trade at the store, bargaining one card for another as if they were some sort of commodity. I remember reading about the creator of Pokémon, he looked so young back then, and I joked with my mom that Japan was making a fool out of the entire world. The whole planet had their children hooked on these cards, pictures of cartoons printed on pieces of paper. There was no intrinsic value in them other than the promoted hype pushed by marketers and the brainwashed kids who followed along with their dumb parents who permitted it. In other words, Pokémon cards were only valuable due to blind faith. Without it, they were worthless. Some smart kids realized this and never bought them, and responsible sensible parents never allowed it, but most went along with the crowd. Japan back then must have thought that people were idiots, they’ll buy anything that’s hyped up enough.
Guess what these cards are worth today? Absolutely nothing. Several newer versions of these cards came out replacing the old, and their value is a sad pathetic shadow of its past. Bitcoin is the currency equivalent of Pokémon cards. Different kinds of cryptocurrency have already popped up, and the future will likely have more which will drastically reduce bitcoin’s value.
Bitcoin is an Imitation of Money
Cryptocurrency originated in third-world countries who couldn’t afford to have printed money. To prevent riots, clever politicians came up with a digital currency that people would use instead of cash, and it worked, people were happy with it and used it to pay for purchases. However, it was made as a temporarily solution until physical money could be returned, and yet now digital currency is being hailed as the savior of a weakening economy even though its value continues to decline. Compare bitcoin’s current worth to its infancy and you’ll notice that it’s been steadily declining year after year, but that’s just the tip of the iceberg. The government has caught on, and so bitcoin is no longer the poor man’s savior. All Amazon would need to do is create its own cryptocurrency and just dump a bunch of capital and viola, Amazon will become a major competitor in the industry, if not the leader. Bitcoin will become replaced and cryptocurrency will level off, no longer being worth thousands of dollars, because it will eventually become dominated by a corporation who must abide by some government regulations. So you see, cryptocurrency is not a real currency, it’s an imitation, a sorry excuse of real money. The other problem with bitcoin is it being technology based, making it unattractive to a lot of people. Technology historically has a very poor track record, just look at virtual reality. It has been around for a while, yet even with its resurgence, it still isn’t living up to the hype. Apart from a handful of innovations like television, phones, and the internet, technology is known for having a high failure rate. Even automobiles aren’t selling as much thanks to public transport and modern living. Most cannot afford travel so planes and ship cruises are limited. Price and inconvenience are two consistent problems with technology and bitcoin has both. The other thing is bitcoin was created by Satoshi Nakamoto, another red flag primarily because nobody knows who or what he is. A currency cannot sustain with this kind of cyber shady leadership.
Still, some “experts” predict it will be worth around a million dollars in 2020. Even if that manifests, it will still be useless.
What do I mean by that? Let me explain…
The One Deciding Factor Everybody Missed
Economists based their predictions on numbers, but they neglected the importance of human behavior. Emotions and other human factors heavily influence the market much more than they realize. A new car may be the safest in the world, but if its design isn’t visually appealing, it will topple. Just look at when the wave of eco-friendly small cars hit the market referred to by some as smart cars (my Irish neighbor calls them clown cars). Geek head scientists thought the world would happily switch over because on paper it technically made sense – save energy, less gas, and blah, blah, blah. But it didn’t happen as they expected, and in fact, the car itself didn’t meet the promise either. So hard numbered data isn’t always accurate without understand human nature.
Just like with small compact cars, bitcoin won’t work in the long run for one reason – it’s unattractive.
Studies have proven that good looking chaps and gorgeous babes get better treatment and opportunities in career. You may think that’s not fair, but hey, that’s human nature, something these “expert” businessmen fail to acknowledge. Just like with people, money has attractive currencies and ugly currencies…guess which one is the ugly duckling? That’s right, cryptocurrency. You can’t touch it, but you can hold cash and rejoice which is preferred by just about everyone, and for this reason, cryptocurrency will be short lived.
The economists did not factor this one important variable – human preference.
I’ll give you another example – when the eBook industry exploded, it was predicted that no one would read books, but the opposite happened. The internet enabled consumers to buy more books and the result was that hard copy book sales increased. Although there was a boom in digital books, physical books still sold well, and even today it is the preferred choice of most people leaving the “experts” scratching their heads.
Why did this not go the way they were expecting? Simple answer – human preference.
People prefer to interact with good looking people, to live in a mansion over a shack, to drive a sleek sexy fast car over a bucket with wheels and own a luxurious designer handbag over a thrift store bag. And I know that whatever the “next big thing” is, will quickly be replaced by the “next big thing”. Millennials want to live in modernized apartments with all the latest updates, not condominiums from 1985. They want the latest phones and cool devices, nobody cares for the old, and bitcoin is so yesterday’s news.
Getting Started is Unnecessarily Complicated
To open a Coinbase account you’ll need to provide your real name and address. Yes, they will verify if it’s real, because you’ll need to link a bank account and provide government ID before you can buy Bitcoin. There are some that don’t require it, but as you’ll soon learn, eventually you will have to identify yourself, especially if you plan to cash out.
Here are some of the wallets, they can be downloaded to your desktop or phone:
BitPay (also for receiving payment if you run a business)
Bitcoin (can buy with a credit card)
Once you get a wallet you can buy bitcoins via bank transfer, credit card, or through cash and an ATM near you. There are also companies that sell USB hardware wallets for more protection and privacy. Basically, it’s like your money is stored on your USB, or your phone if you download an app. You can try it if you want, but I don’t recommend it.
The Big Risk
Hackers stealing your bitcoin is obviously the main concern because if you have internet access on your desktop or phone, there is the potential for theft. Billions of crypto-dollars have collectively been stolen so that is something to think about before going forward. Banks have been robbed too in the past, but personally I don’t have much faith in cryptocurrency and don’t advocate it at all. As I’ve said in my early works, bitcoin is a game for those who know how to gamble to make some quick cash but as a long-term investment, don’t expect everyone, especially the technology handicapped elderly, to convert their retirement into digital currency. This is the demographic who holds most of the money and they don’t want to bother with cryptocurrency any more than they want to open an email account. Their preference is cash, and that’s all that matters.
The other big question nobody asks is, who’s going to buy it if it goes big?
Here’s why Bitcoin is useless
Let’s say the economy collapses and one bitcoin is worth $50k, who is going to do the exchange and give you fifty thousand dollars? Sure, you could use Coinbase for a bank transfer (which will require ID verification and track your activity), but you would have to go to a country unaffected by the economic collapse and exchange it for cash assuming they would do so. Listen, if the global economy does collapse, I highly doubt bitcoin will magically save you because you will be still living in a world which does not recognize it as money. Most stores don’t accept it, and there is no guarantee that you will find a bank or trader who will give you $50k or anything close to its alleged value.
Another thing most don’t realize, is that there are still transaction fees just like you would get from banks for wire transfers or for using PayPal. What happens if you can’t find a conversion outlet? Well you may be forced to pay a hefty transaction fee to get your cash, something these “expert” economic advisers failed to tell you. Many suggest purchasing precious metals, but in the past, the government manipulated the value of silver, so history has proven that the economy is rigged in that the government has the power to instantly devalue or value whatever it wants to suit its agenda. If the government has devalued gold & silver in the past, what makes you think they can’t do the same to bitcoin and other cryptocurrencies? Do you honestly think that if the economy collapses, they’re going to just sit quiet and let everyone who holds bitcoin live happily ever after? They most likely already have a backup plan to address this in place as you are reading this right now.
That’s why I say Bitcoin is a fool’s investment. I don’t care if it becomes worth a million dollars in the future, the fact of the matter is, it’s intangible, based on nothing, backed by nothing, and will not matter in a brave new world.
AND, going back to my original point – it’s an unattractive currency.
Cash is king, that’s what is preferred.
My advice is to stick with what everyone recognizes as money.