Place a rusty old ’70 Hemi Cuda in front of a 16 year old Eastern European Internet millionaire and he wouldn’t even blink an eye to appreciate the value beneath the rust. I, on the other hand, would jump at the chance of owning it, and most of you reading this would know its value… or at least its potential. The person who didn’t see the Hemi Cuda for what it’s worth, or what it could be after some work, missed the opportunity to take advantage of a good thing – just like what many did when they first learned of Bitcoin.
The wizards who made their millions, whatever the industry, be it fur in the 19th century, or railroads after that, or the Internet recently, and now crypto currencies, they all have one thing in common: they risked their time, their reputations and their effort for something no one else bothered to take up. For that, the system naturally rewards them with profits that match the risk and time they invested.
The millionaires that sprouted from the early adoption of Bitcoin are no different. Most of the early Bitcoin entrepreneurs that invested part faith and part insight, reaped the rewards when the crypto ascended to its thousand-dollar valuation. Let’s put that in perspective. At the moment, each British Pound fetches $1.67, each Canadian Dollar buys 90 US cents, and each Euro will get you $1.37. As of Feb 21st, each Bitcoin will get you 550 US Dollars. And at one point, it breached $1000. What does that say about value?
Ignore the Old Rules of Legitimacy
Old world regulators and old school economists can say what they like, but it seems to me that the market has spoken. Cryptocurrencies are highly valued. What’s more, they are more trusted by millions of people than government fiats…
Financial ecosystems are just like environmental ones. The starting is slow because the landscape is harsh, and there is no critical mass to speak of. Then it happens – a mutation in the process and suddenly there is an explosion of advances. This is reminiscent of the Cambrian Explosion, in our own timeline as life began on earth.
We are seeing it again today as Bitcoin begins to emerge from the shadows of misunderstood concepts measured by inadequate economics, and regulators who don’t understand it. Either that or they are threatened by it.
Identifying an Opportunity
Early Bitcoin adopters took the ultimate risk when they set out on their quest. Most of these entrepreneurs saw the potential and the value of the cryptocurrency, given its decentralized system. They spent cash, that could otherwise have been used for other goods and services, and invested in what is known as ‘bitcoin mining equipment’, or just simply bought the currency for appreciation. Many early adopters even borrowed money to lead the Bitcoin revolution. They took massive risk – or at least that’s what we perceived it to be. To them, it made sense.
The point of Bitcoin is not to blindly trust anyone with the transfer and creation of value. At its heart, the Bitcoin system looks out for everyone without trusting anyone. With fiats, the government uses antiquated technologies to prevent the currency it prints from being forged. However, with cryptocurrencies, forgery is prevented by use of a peer to peer system that keeps track of the transaction ledger, known as the blockchain. It is almost impossible to break the cryptography or to fork the blockchain. While there may have been thefts of Bitcoins, there has yet to be a forgery. The same can’t be said for fiats. This unique attribute was a huge reason why early adopters of the cryptocurrency took such risk investing in it. They saw real value when no one else did.
Indeed, Bitcoin is all over the news right now, and with its price coming off its highest values, relative to fiats, a number of discrepancies have also caused it to stumble back further. With the shuttering of Silk Road and the money laundering charges that incarcerated Shrem, then the current saga with Mt. Gox and the Bitstamp issue after that, there is just so much going on. But let’s not muddy the waters with inconsequential growing pains. There are bound to be some problems and some people finding loop holes to do things. Just because of that, we can’t unilaterally and expeditiously abolish cryptos.
Entrepreneurs Improving the Bitcoin Marketplace
The largest Bitcoin investment, ever, was recently announced. And I am sure others will come along to assume that honor soon enough. But for now, the $9 million stands tall. The investment into Jeremy Allaire‘s latest venture (Jeremy is the one who founded Brightcove) Circle, does more than take the prize for highest Bitcoin Investment, it says that the real people who understand finance and the economics of everyday business, realize that cryptos are the logical progression to the next chapter in civilization.
According to Forbes’ Kasmir Hill “Circle plans to offer payment acceptance tools for merchants and a place for consumers to buy, sell, receive, and store Bitcoins, setting it up to compete with BitPay and Coinbase.”
Allaire’s venture goes in the face of old school economists and worried politicians. It’s a testament to one fact: an idea whose time has come can’t be stopped, as Victor Hugo once wrote.
The crypto world is not what the mainstream media and politicians are trying to make it out to be. It’s not about hackers in basements wearing masks, and it’s not all about buying contraband on Silk Road. Circle signifies that Bitcoin, and cryptos in general, has transcended the early adopters, and now the serious transformers of the industry, like Jeremy Allaire, have taken the reigns of this Bucephalus. The first round of Bitcoin millionaires have made their mark. They’re old news. The story is no longer about them. The market has evolved to the next phase. We are seeing new Bitcoin entrepreneurs emerging and the big story is not about Bitcoin per se, it’s about the ecosystem that is being built around it.
Welcome to a new world.