Do you remember 1998? This was the year Eastman Kodak (they made photography film) was in their “prime” for business. Who would have thought just 3-4 years later most of us would never take a picture with “film” again? The Eastman Kodak business model died and so did their company.
I think the US Dollar is headed down a similar path.
You see, there is a new crypto currency that was invented in 2009 that is quietly causing quite the stir in the finance world, and could potentially take over the paper (fiat) money business.
What is this piece of technology? It is called Bitcoin and Crypto Currencies and these are the first decentralized digital currencies optimized for the digital world we now live in. No single individual or government owns or controls Bitcoin, however that cannot be said for other Crypto’s. The Bitcoin network operates on the internet and is kept secure by so much computer power it equals 500 of the world’s most powerful computers all together and working on a single task!
Currently 95% of all transactions in the US are already being done digitally through a patched up financial system. It was never designed for the digital world we now live in.
The greatest “invention” with our monetary system in the last 50 years is the invention of the ATM card. Could it be that is why we have so many problems with identity theft and credit card theft?
Our current US Dollar system is just a patch up system of Band-Aids, chewing gum and bailing wire. Why do I say this? Look at our current financial system, we all use plastic to pay for everything, but is it really a good system?
You say, well everything works pretty well or does it?
Recently Target, Home Depot, and Capitol One have all been hacked to get the credit card information of consumer’s accounts.
About 2 weeks ago my credit card company, Visa, called me to verify a $1.38 charge that they thought was suspicious; sure enough it was, as it was NOT a charge I had made. So they advised me they would have to issue me a new credit card as my account had been “compromised” somehow. I wonder what database the hacker hacked into to get my information.
Visa sent me a new card, no problem. Then last night I tried to make a purchase online to buy some car parts (yes, I have an affinity for old cars), but the brand NEW card had to get additional verification from Visa before it would go through (I think it was all supposed to be automatic) but ultimately it failed. What a pain in the A**. I ended up having to call the credit card company to get them to approve it. That is NOT a sign of a strong financial system one can trust.
This is ONE of the main reasons I am such a big proponent of crypto currencies like Bitcoin and why I believe it will take over our current monetary system. When using crypto’s, like Bitcoin and others, the payment does not go through unless you authorize it, period. If you set your accounts properly nobody can hack into your accounts and steal your Bitcoins or other crypto currencies. None of your private information is attached to the crypto currencies, so your risk of identity theft is almost ZERO. And one of the biggest perks is that your bank, a merchant or the government cannot say or stop any of these transactions.
We believe Bitcoin is the answer to our future financial transactions instead of relying on plastic cards with chips embedded in them for our “security”, which is obviously not working well.
During Bitcoin’s short existence of 10 years, it has amassed a tremendous amount of interest and capital. It now has a Market capitalization of ~$186 Billion, just since 2009! Can you imagine in another 10 years where it will be? This impact makes me think of Bitcoin as another version of the Internet (like Internet 2.0) where money is not only involved, but becoming disrupted!
We believe that Bitcoin is just getting started on this run. A single Bitcoin is now worth nearly $50,000 and was only worth 1/1000th of a cent when it debuted in 2009.
Bitcoin could be a really good investment. The Bitcoin protocol (software) will only have 21 million Bitcoins produced by the year 2140. Already 80% of those Bitcoins (17.8 million) have been produced. This means there are only 3.2 million Bitcoins left to come in existence over the next 120 years!
Let me point out there are 7.5 BILLION people in the world and MOST do not own any Bitcoins. How would you have liked to have invested in Google, Facebook or Apple when they were a company no one had heard of? Well now I think we are at the same point with Bitcoin. Bitcoin has the potential to become much bigger than Google, and Facebook put together!
Since 2012 there has been more venture capital going into the development of Blockchain (like Bitcoin’s) than any other technology. This has also sparked life into many similar cryptocurrencies as well, but NONE have the market capitalization of Bitcoin nor do they have the infrastructure being created to support such. This makes Bitcoin way ahead of them in this regard.
Be very careful of anyone coming along and saying their new crypto (xyz coin or whatever) will take the place of Bitcoin. In most cases they either do not know what they are talking about or they may be trying to profit from your lack of knowledge. Be very skeptical.
At this point today, we do not transact in Bitcoins, but that could change in the near future. Looking at history, in 2005 no one had a smart phone.
Today almost everyone has a smart phone. With a smart phone you can now carry $1000 worth of Bitcoin on it and send it to whomever you want in the world within seconds if you so choose.
The world is changing and I do not think it will work out well for the US Dollar.