…how Bitcoin will change the world and could make you rich!
“Hands-Up” anyone who hasn’t wondered whether they ought to invest in Bitcoin?
No, thought not.
We’ve all considered it, and I, perhaps like most of you, had until recently avoided taking the plunge. For the record, Bitcoin, and it’s many imitators are colloquially known as ‘Crypto-Currencies’.
It was only a WhatsApp message from a friend announcing that he’d made 30% on Bitcoin in one week that finally galvanised me into action.
Naturally the good fortune of a friend is no basis on which to make sound financial decisions, and that alone should tell you that anything you read here should not be construed as financial advice!
I have been following Bitcoin for the last three or four years, and have watched it morph from a niche ‘currency’, largely used to provide anonymity when purchasing very nasty things on the ‘dark-web’, to a ‘real’ currency recognised by some central banks and many major corporations.
Moreover, infinitely more importantly than its role as a speculative gamble, is the fact that Bitcoin and its rivals are beginning to disrupt the way we transact with each other.
In fact, Cryptos are so disruptive that they will eventually remove the need for retail banks, credit cards, bureaux-de-change, payment providers and eventually even cash.
The cashless society will be enabled by digital currencies, not Apple Pay or Contactless. In fact, any middle-man who gets in the way of a simple transaction between two people or entities will eventually disappear.
For libertarians, this is exciting stuff. For Governments and many financial institutions, it’s a nightmare that is only just beginning.
The problem is, it is not going to go away. Bill Gates, has publicly argued the Cryptos are now unstoppable, and said that “in the future, financial transactions will eventually be digital, universal and almost free.”
In Malcolm Gladwell’s book, The Tipping Point, he argues that sociological changes; products; ideas; messages and behaviours, spread like viruses do, and there comes a point at which an outbreak becomes an epidemic.
I sense that at some point in the next 2 years, we’ll reach the tipping point for crypto currencies, and like the Internet in the late 1990’s, an outbreak amongst geeks, ‘fintech’ companies and investors will become an epidemic.
So, on the one hand we have this technology that few people understand yet that has the power to change the way the world works. (Yup, it’s the Internet all over again).
On the other hand, it’s also a potential investment vehicle that has the potential to make some people millionaires, whilst bankrupting others (remember dot.com boom & bust)?
Make no mistake, like many innovations before it, Cryptos exhibit all the classic symptoms of a ‘bubble’.
Many people have already been made very rich by investing in Bitcoin, whilst others have lost millions. There’s no doubt that are many more millions to be made, and many more to be lost.
Over the next few issues of this newsletter, we’ll look deeper into the world of Cryptos, including where you can go to buy and sell them.
We’ll look at their history and their potential. We’ll compare them with other investment bubbles that have gone before.
We’ll look at the ‘blockchain’ – the unique distributed ledger system that underpins all digital currencies.
We’ll explore the impacts and benefits to society, Governments and businesses and we’ll also investigate the relative merits of some of the more popular of these new currencies.
Plus, we’ll track how my small investment in two of these currencies perform between now and year end!
I just had to ‘dip my toe’ in the water, so have invested £1,000 split between two currencies, Bitcoin and another called Ethereum, just to see what happened!
Each month I’ll share the current value of these mini investments as they were on or around the 25th of the previous month (the date this newsletter usually ‘goes to press’).
All in the name of a bit of fun, but as the months go by, we’ll see whether my inclination to invest hundreds of thousands grows stronger or dissipates along with my £1,000!
Note that for £500, you get around two full Ethereum coins, but only about 15% of a single Bitcoin.
In fact, digital currencies are infinitely divisible, and the practical limit implemented by the code (by Satoshi Nakamoto, Bitcoin’s reclusive founder) is 8 decimal places (1 satoshi = 0.00000001 BTC).
For the record, on August 18th this year, I bought £500 worth each of Bitcoin and Ethereum, a rival currency. As of 25th August, values were as follows:
Alan’s Crypto Currency Tracker
| Date | BITCOIN | % Change | ETHEREUM | % Change | £ Total | £ Total Change | % Total Change |
| 18/08/2017 | £500 | £0 | £500 | 0.0% | £1,000 | £1,000 | 0.00% |
| 25/08/2017 | £521 | 4.2% | £570 | 14.0 | £1091 | £91 | 9.1 % |
So, in one week I have made a 9.1% profit, though this masks a few wild swings along the way! But what will be the value on 25th September?
Email your guesses here: advice@townclosefp.co.uk.
[EDITOR’s NOTE: As with all investments no profit has been made until the investment is sold and the cash received. This is often overlooked, especially when it comes to property investments!]
If you would like to see a specific topic covered, or would like to discuss how Cryptos could impact or benefit your business, please email me at alan@anflair.com.