The world would be better off from money laundering, and black market crap if they recalled and replaced $100 bills. A very, very, very small part of these activities involve bitcoin. The reason you hear about them is that it fills a narrative the government and the banks want you to believe.
Jamie Dimon was bitching about bitcoin a few weeks ago. Yet, no one seems to recall his firm was fined $14 billion for manipulating the silver market. The banks do not want bitcoin because they do not own a piece of it—and its use means the loss of billions in transaction fees that will not go them.
Yet...Blackrock, Fidelity, and a whole cast of major firms want in on their ETF possibilities.
The public ledger is the technology behind this that makes it unique. It allows every transaction to be tracked, in public. Forever.
Imagine a government running on a block chain. Public auditing would happen in an instant. Want to know where the pentagon is spending money? It’s there for everyone to see. Its use in money laundering or tax evasion is humorous. I was under an adult from the IRS for almost four years because of bitcoin transactions from 2013 to 2017. Trust me...they can identify every single transaction and where it went.
In a lot of places in the world, banking is reserved for the top 10% of the population. Being able to transact on a cell phone without having to deal with the fees of the banking system will open up new markets to literally billions of unbanked folk.
And no, its not going to go away because Jamie Dimon or Warren Buffet don’t like it.
ETFs will cut down on the volatility because the derivative markets will play with it—just as they do gold and silver.
The part I DO agree with you on is the speculative nature of bitcoin. I started buying it (not investing, buying) in 2013. The whipsaw nature of the adoption cycle has been brutal. I bought my first 5 @$110 each. The Compound Annual Growth Rate is somewhere in the 70% range. But the ups and downs per 4 year cycle are easily 50% either way. That will slow down with ETF adoption.
In fact, I believe the ETF adoption is a “sell the news” opportunity. The is almost universally believed that ETF adoption will cause the price to skyrocket. Which...in my experience means it will drop 10-15% in a few days.
But, I’ve held onto it for ten years and made good returns. I take the gravy, pay the tax, and wait for the next cycle.
I still do not get the public ledger.
What can Block Chain do that universal Microsoft Excel cannot do?
Nice post, by the way.
Always nice to chat with someone who knows a subject really well, and enjoys talking about it.