Should you buy Bitcoin?

Are you following the ups (and occasional downs) of Bitcoin?

Do you kick yourself for not ‘investing’ in Bitcoins when they started showing up back in 2008?

What about kicking yourself over Google, Amazon and Facebook too? (Sorry for the little dig!)

Check the price of Bitcoin today. See what it was yesterday. It goes up, it goes down, and either way generates story after story.

Needless to say, I’m sure you follow its fluctuations and all the content it produces. Surely you have seen your fill of the best investment ever… all the way to the you-will-lose-your-shirt-and-everything-else-you-own narrative.

Honestly, I’m the last person to write about investments, although most who do are like tech and other business writers, predicting endlessly and blaming ‘the market’ for their poor track records. Just saying.

But there’s still headroom and opportunity to retire on investing in Bitcoin… just ask the Winklevoss Twins. Cameron, one half of the famous duo, was interviewed by CNBC this week. He articulated their view simply as Bitcoin being Gold 2.0 with the possibility of it disrupting gold all together:

“We’ve always felt that bitcoin, given its properties is gold, 2.0 – its disrupts gold. Gold is scarce, bitcoin is  actually fixed. bitcoin is way more portable and way more divisible… you can see 10 to 20 times appreciation.”

Of course, for every Winklevoss (and there are two) there is any number of naysayer spokespeople, summed up by the following from Forbes, “A warning about bitcoin’s wild price swings”:

“The recent extraordinary runup and commensurate volatility in the price of Bitcoin has intensified global attention on the cybercurrency. For good or ill, Bitcoin is now a topic of interest to the mainstream press, as Bitcoin newbies near and far take notice.

Such newbies and reporters alike have nowhere to turn for information on Bitcoin apart from the established cadre of Bitcoin fans – some would say fanatics – who helped to drive its price to the stratosphere in the first place.

Just one problem: many of these fans are spouting misinformation – and worse, they believe their own nonsense.”

Two very different points of view, to say the least.

But let me share a third that should shake you up, whichever side of the argument you are on, from CNN. “Coinbase CEO warns against irresponsible Bitcoin investing”:

“The person atop one of cryptocurrency's most popular exchanges pleaded with people to invest responsibly.

In a blog post on his site, Coinbase CEO Brian Armstrong sought to ‘remind customers of some of the risks associated with trading digital currency’ -- which include wild price swings

…Armstrong warned in his post on Thursday that the increased interest in cryptocurrencies, which was punctuated by a stunning Bitcoin rally earlier this week, has led to ‘extreme volatility and stress on our systems.’"

Bottom line? Once again, we are tarnishing and restricting the true value of what our applied digital technology can accomplish by getting lost in the purest of Digibabble.

Simply put, we have taken the promise of an open, one-to-one/many-to-many technology system that was going to cure disease and the social ills of our planet, and instead empowered the largest advertising platform, biggest shopping mall and TV broadcaster ever conceived to spawn terrorist and hatred enablement, fake news and trolling.

Of course, I’m being harsh and going off the edge a bit, but my rant is to make a point. We are blessed by the technology at our disposal when used for good. In an interview with McKinsey and Company, Dan Tapscott, CEO of The Tapscott Group and author of “Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World” was quoted as follows:

“Everyone’s a participant, not an inert recipient. This has an awesome neutrality. It will be what we want it to be, and we can craft a much more egalitarian, prosperous society where everyone gets to share in the wealth that they create. Lots of great things have happened, but overall the benefits of the digital age have been asymmetrical. For example, we have this great asset of data that’s been created by us, and yet we don’t get to keep it. It’s owned by a tiny handful of powerful companies or governments. They monetize that data or, in the case of governments, use it to spy on us, and our privacy is undermined.”

Opposed to the Winkelvoss investment strategy and dream, Tapscott ends as follows:

“I’m compelled most by the power of this opportunity. I’ve been at this 35 years, writing about the digital age. I’ve never seen a technology that I thought had greater potential for humanity.”

Time to change the conversation.

The issue is really about the technology application behind Bitcoin, the system that was used to create it. In “What is Blockchain Technology? A Step-by-Step Guide For Beginners,” the primer explains:

“Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain… A network of so-called computing “nodes” make up the blockchain… Stock market trades become almost simultaneous on the blockchain, for instance — or it could make types of record keeping, like a land registry, fully public. And decentralization is already a reality.”

Blockchain technology is what’s most exciting, and what might change it all again. And let’s be clear: Bitcoin is not 100% secure, nor has it been free from problems. The problems associated with Bitcoin have been have been due to hacking or mismanagement. In other words, these problems come from bad intention and human error, not from flaws in the underlying concepts.

Bitcoin cannot be written off as a fad. Nor can it yet be written as the new gold standard. However as former US Secretary of the Treasury Larry Summers reportedly said:

"Is the blockchain technology going to be fundamental? I think the answer is overwhelmingly likely to be yes. Is Bitcoin going to be a valuable store of value, the same way as people use gold? I don’t know, but I think that certainly the answer is 'no' doesn’t seem like the right position to take."

Yes… ‘No’ is the wrong position to take.

Follow this carefully. Don’t confuse the hype and possible bubble of Bitcoin with the full-on world-changing power of blockchain. But don’t let me stop you from buying Bitcoin either – or a bit of Bitcoin. But do bite it before you buy, just like your ancestors might’ve have bitten into a gold coin to see if it was real.

Instead of the power of your data, and its monetization being in a few hands, it will all return to you if it’s successful.

Listen:

“The main event isn't bitcoin. It's using the blockchain to disrupt other industries and Wall Street”. 

- Patrick M. Byrne

What do you think?