Social Bitcoin... The Digital Gold Rush
Certainly I am not the only to notice the social phenomena that is Bitcoin. I am not talking about the financial growth and explosion but the explosion of the social aspect of Bitcoin. We have found ourselves gripped by a mania that surrounds this currency. It is all that we can talk about. We can look no further than all the post that exist on the platform speaking about the subject to see the grip it has taken upon all of us. It consumes our media and dominates our conversation.
I have been thinking about this and I was curious about some historical events that we look at would be in some ways similar to this event. The ones that come to mind, are the massive gold rushes experienced in the not so distant past in California and Alaska. News flowed daily from these area for fortunes picked up from the very waters that run from the mountains. It was on the tongues of of every person, it was hyped to a fever pitch. People risked everything for a chance at making it big and attaining fame and fortune.
Now today, we experience this at the speed of light. News doesn't take days to reach the population centers, it is instantaneous. The frenzy comes to a boil at lightening speed. Every spike in the price bring collective elation while every dip brings news of doom. For anyone that has say through an Econ class, this is those principles but with rapid cycling bi-polar syndrome.
I have no allusions of being able to give some kind of prescriptive solution to the problem or even if it is a problem at all. This might be the reality of the world that we live in to day and as technology progresses, hyper-economics and the social economics will be have wide ranging effects on market forces. We are in the middle of our generation's gold rush, it is just exists in the digital environment.
I get worried a lot, I have been holding crypto for over a year but with the flock of people getting in, I feel a bubble is forming. The million dollar question, when it's going to burst.
We shouldn't be waiting for a burst, we need to be waiting for the correction. The problem with waiting for the burst and expecting the burst, it becomes a self fulfilling prophecy. Once the correction starts, we all scream burst and then the sell off begins. When investing in anything, we should never be scared to take profit in fear that the price is going to go higher or be scared to buy as fear the price has not hit bottom. Taking profit early or buying before bottom helps to regulate market forces.
Bitcoin now is digital gold.
I wonder if we really know what it actually is right now. It looks like digital gold, but we might find out in the future that it is digital tin and something else was really that digital gold. We don't know what the supply forces are going to do to this investment as creation of the coins comes to an end here in the next couple years.
surely it is not cash, and never will be, i'm almost sure..
I believe one day we will probably have a form of this type of "currency" that will better mirror fiat currency in stability. It will all come down to it being universal acceptance and ease of conversion. We will need to be able pay and convert this magic currency with out the massive fees that now dominate these coins and tokens. The other problem is that what makes them great is what makes there actual adoption of currency a long shot. Realistically, there would have to be currency that has a some kind of governance that controls circulating quantities to maintain exchange rates between fiat currencies. But at that point, we have destroyed what makes these assets what they are.
I believe that all the enthusiasm is what drives the price up. Bitcoin is more of an investment then a currency right now. I saw an article once that mentioned how Bitcoin enthusiasts introduce it to people as the currency of the future but they never use it as a currency themselves. Everyone is waiting for somebody else to start using it as a currency.
Passing off as a currency is really the wrong way to look at it. Can it be used as a currency? Yes, but as we all know is that we have deal with high fees on these transactions. Anything can be used a currency if the demand and there is value for it. Since it is finite in nature, it needs to be looked at in a similar fashion as other finite investment like gold or oil. Depending on demand and available product, market forces should regulate this. But in many ways, all these coins and tokens exists in a pure capitalistic environment. Subject to all the market forces both good and bad.
This is so true, it really is like a gold rush.
Since most digital currency is finite, it should be treated as such. It is a lot like gold or oil, but what it lacks is the physical utility of gold where there are multiple markets forces that regulate the market.
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