The next Big Thing – Bitcoin 101

Bitcoin is the next big thing. And here is the first thing to understand: Whereas assets were recorded until now mainly via “Balance Sheets” (static pictures of your belongings at a certain moment), with statements of transactions as ancillary documents, bitcoin says that the main document is the “P&L”, which is the journey between two moments / balance sheets. It is almost as a religion now and he becomes a mystery man….. It is now obvious that we are not speaking about some tricky games or occult practice. Every 10 minutes a number of new BTC are being “printed” and awarded to the block winner. 21 million units is a small number. As the number of miners and the processing power grows, the time to solve the problem decreases – and the function is getting more complicated to keep up the 10 minutes. The governments are losing some of their power – the power to print and control money. I am already seeing most of the big law firms designating a “Bitcoin Partner” – this means that they see the opportunity and are taking it seriously. But my guess is that, at some point in time, if things work as they seem to work today – huge hype, lot of shops accepting BTC, accelerated learning process for consumers – we will get quickly to a point where the US and others will take the next logical step: they will treat it as a currency.

The protocol as well as storing of sensitive data may raise a lot of security issues. I believe the bitcoin protocol is trending in the same way. The internet protocol first appeared in the 70’s. People did not know where this would go, as it was only a simple hand-shaking protocol between two computers, linked by a wire. I am surprised to learn that, even though everybody speaks about it, very few people actually know what it is. Living in a world where banks are under huge pressure for compliance, KYC (know your customer), avoidance of money laundry and terrorism – the use of an alternate, non-regulated currency looks like a big challenge. Money means bank, cash, credit cards, gold… For some time, pressure has been building for a more efficient digital way to store and use money, and the solution has obviously appeared. The solution of this math problem is not the BTC and there is no connection between the problem and the currency.

You have BTC ATMs in most of the cities. The second story, even more mysterious, claims that such a big disruption would not have happened without the support of some very elite groups. We have 1.3 trillion USD (about 5 trillion USD worth of all currencies, worldwide). Banks will learn that bitcoin is not a foe, but a friend and will start to use it. BTC you use. Because you need to declare your capital gain on that specific BTC. It is also clear as to what you need to do in order to be 100% legal and in good standing. This is bad for preserving value, but it is good for speculative business. And this is the basis for solid business. Companies like Cisco took over the world (and they actually became the most valuable corporation of the world at some point). Sometimes such movements go the wrong way and are misused, but the vast majority of people are thinking about it as the savior from oppressive chains, the key to freedom of not being followed every moment, like we see in the movies (police using banks to track the plastic for fiat money usage).

€˜69 was the last time when so many people spoke loudly for freedom – freedom of speech, freedom to sing, freedom to spend. As long as people trust it, it has value. And, one way or another, this trust seems to be here to stay. €. And, surprisingly, the answers was that it is a friend! €. I guess this is the biggest of today’s questions. Not 100% true. Today’s money is significantly less than 10% backed by gold, because of leverage by the banks. I guess that the biggest threat is in user misuse or mistake, which is very similar to what could happen to fiat money and money storage. Or some money replacement? He started telling me about how much profit he made by investing in Bitcoin. Every approximately 10 minutes a new block is started. So every 10 minutes millions of alternative blocks are being created, but every 10 minutes only one block is the winner that makes its way to the block-chain. One is the glamour of an unknown, undercover, extremely clever creator. Invest only in one of the two, don’t risk both sides.