What You Don't Understand About the Bitcoin Explosion
By now your feed is absolutely filled with Bitcoin. All of a sudden the “experts” are coming out of the woodwork. A bunch of people are offering courses. And there’s talk about the “bubble.”
I’m going to attempt to explain what is happening from a layman’s point-of-view. I don’t know much, but I know the future when I see it. I’ve built my entire career on being first or early to the game. So forgive me if I get it somewhat wrong, but this is what I believe is taking place.
The first thing you need to understand is that what’s happening is NOT about the price of Bitcoin. Sure, Bitcoin $10,000 is all over the news. There are scammy-sounding network marketing organizations capitalizing on people’s FOMO and greed. There are pumping and dumping operations and some coin offerings that are pure scams.
But this is all noise. Here’s what you really need to understand.
The world’s financial systems are broken. The US dollar goes down in value every year. The centralized banking systems put people at the mercy of their high fees and antiquated processes. Trust in the systems of the world, be they political or financial, is at an all-time low.
When Satoshi Nakomoto released the now infamous Bitcoin whitepaper in October 2008, he proposed a new form of currency that be decentralized, meaning no one had control over it. It would be peer-to-peer, meaning anyone could send money quickly and easily without incurring ridiculous fees. It would be anonymous, meaning no one could stick their nose into your personal business. And it would be trustworthy, meaning the ledger created by the blockchain technology that Bitcoin was built on would be without error.
Without explaining exactly how Bitcoin works, I want to focus on the real key word in the above paragraph.
It’s not Bitcoin. It’s not money. It’s not currency.
The word is BLOCKCHAIN. And it is the reason that Bitcoin is soaring, and that the cryptocurrency market cap currently exceeds $315 BILLION dollars (more than the value of Disney, Wal-Mart and VISA).
In 1993, a web browser was created that changed how we would access information… forever.
In 1997, a company dared take on Blockbuster Video by creating an easier way to rent movies, and eventually pivoted to the leading streaming service they are today.
In 2007, a smartphone was created that seized the market from Nokia and transformed the way we consume information.
And in 2008, an idea was proposed that would forever alter not only how we make purchases, but how we manage contracts of every kind.
You see, regardless of what happens to Bitcoin (bubble be damned), Blockchain is a revolutionary technology that is here to stay. And it is getting ready to disrupt just about every industry you can name. Yes, even your industry.
Is Bitcoin like the tulip craze? Could there be a more asinine question? Flowers vs. revolutionary technology. Hmmm… can you spot the difference?
Has Bitcoin risen ridiculous fast? Yes, there’s no question.
Will there be a pullback? There HAS to be. Gravity says so.
But here’s what’s different about Bitcoin. There are only 21 million of them… ever. Period.
17 million of them are currently in circulation. The other 4 million will slowly come into circulation over the next 120 years. (Yes, you read that right.)
Of the 17 million in circulation, it is estimated that at least 4 million are lost forever. It’s also believed that the mysterious Satoshi Nakamoto owns up to a million of them.
That means only 12 million Bitcoin are actually in circulation.
How much printed money is out there? It’s a seemingly endless supply. It’s not hard to come by. It’s not scarce, and the government prints more whenever they feel like it.
Huh. How about that.
Even so, it’s NOT about Bitcoin. It’s about Blockchain, the technology which makes Bitcoin possible.
I’m not a financial analyst or a financial advisor, but I am a futurist. And I can clearly see that there is a revolution taking place right before our eyes.
Blockbuster didn’t see Netflix coming.
Nokia didn’t see Apple coming.
Sears didn’t see Amazon coming.
The world doesn’t see blockchain coming. But it’s here, and it’s not going away.
Bitcoin is now all over the news. Thursday night it hits the mainstream as an episode of The Big Bang Theory will introduce the concept to millions more people. (I'm sure the episode will be stupid because it's a stupid show.)
But the fact is we are at the beginning of the technology adoption curve and over the next ten years we are going to see a transformation of tech that is going to make the smartphone revolution look like a hop from writing with pens to using a typewriter.
Buy Bitcoin or don’t buy Bitcoin. It doesn’t matter. What DOES matter is Blockchain.
Pay attention, whatever your industry may be. If you can’t see how Blockchain WILL disrupt your industry, allow me to introduce you to the executive team at Blockbuster, Nokia and Sears. You’ll be in good company.
Blockchain, my friends. Blockchain.
(Please share this post wherever you like if it would be helpful for your friends and family to read!)
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The cryptocurrency show I host with Travis Wright is called The Bad Crypto Podcast. We are around #30 in all business shows on iTunes, and also available on Stitcher Radio, Spotify, iHeartRadio, Google Play and other places. I invite you to listen and go down the rabbit hole with us!
Insightful and well said.
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6 年Agreed 100% and that's just the beginning...
My clients grow 100% to more than 3,000% in 12 months or less. I help CEOs thrive in the ever-changing business climate. 30 years - 17 countries. REAL results. More Money! Less Stress! More Fun! DeberahBringelson.com
7 年Excellent Joel! I still have a lot to learn, but his is great. Thank you!
Human Resources Leader | Executive Coach | Connector | Mediator
7 年Great piece JC!
Today is a good day to build.
7 年Well, no. Excluding the valuation (which is going to be the subject of some fascinating investigations a few years from now), I'm gonna have to rain on the "blockchain will change everything" parade a bit. Every example you mention, of legacy vendors blindsided by upstarts, was because those upstarts all gained traction with consumers. They took something that everyone wanted to do (Watch movies, communicate, buy stuff) and optimized the experience to the max, in most cases developing entirely new ways to deliver value. Bitcoin is not gaining traction with consumers. The peak hype came and went in 2014, and most of the vendors who signed on to support Bitcoin as a payment mechanism have quietly dropped it. I have yet to see a technology adoption curve that has a *loss* of support as a defining feature of eventual dominance. All the hype right now is about the price. People aren't buying Bitcoin because they want a more complicated way to pay for stuff at a small handful of vendors, it's because of the price increases. "Blockchain" itself is not a monolithic technology - it's a set of solutions to the Byzantine General's Problem (of trusted communication in a trustless landscape). Hyping up how "blockchain" will destroy the world is about the same as hyping up "open source". Surprise - proprietary is still here, stronger than ever. What blockchain tech *does* enable are some massive efficiency gains in verification, reconciliation, and immutability - characteristics that will certainly improve a lot of our existing processes. There are already vendors selling in solutions based on this new paradigm (R3, RippleNet, etc), and the ASX is moving to a permissioned blockchain for securities trading in 2018. But it's not without weaknesses. The "21 million" number is actually something of a myth. It's not a hard-set limit, but rather the logical outcome of the block halving schedule - which is only immutable through consensus. Everything about the public ledger can be changed through consensus (like fixing the 2010 Value Overflow incident), and the 51%-attacker problem has not yet been solved. Ultimately, blockchain tech is just software, written by humans, with all the flaws that entails. A lot of reporting about "blockchain" ignores these shortcomings. It's an impressive tool, and it enables some interesting use-cases, but it's not as earth-shattering as the current media hype proclaims. You're likely to see blockchain tech quietly replace underlying internet infrastructure - like DNS and SSL, and be used in the consumer space for more "pedestrian" applications like identity (which is not a pedestrian problem at all). The best-case scenario that I'm rooting for, is for blockchain-type tech to make it into media and journalism, replacing centralized social networking and ensuring an unbroken chain of authenticity (from device, to editing, to broadcast, to consumption). That's something we'd all benefit from: A defense against fake news. But is it going to topple the entire system? Doubt it. The system's already starting to win, between BitLicense and the SEC cracking down on the more adventurous ICOs. The taming of the blockchain beast is well underway :)