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Up 660% on Bitcoin

Posted August 7, 2017 at 6:27PM

I first recommended Bitcoin at $449 last June in Bubble and Bust Report.  It is now at $3,415.73.  That is a gain of 660%.

Bitcoin is electronic currency that was created in 2009. It is not regulated by any kind of government, and it provides anonymity to its users, allowing them to make purchases in secret.

It has been doing well as a crisis investment. It jumped post-Brexit, after India's cash ban, and after Trump's election.

Back in June 2016 I wrote:

“Bitcoin is a dumb, transaction-processing network. And yet it supports all of the smart, innovative ideas and products.

You never have to build a new application on top of Bitcoin. You don't need anyone’s permission to innovate. There is no central control. This is the exact type of early-stage environment that leads to massive growth.

Compare that to the current banking system, which is built around rent-seekers, lobbyists, government bodies, and tightly controlled walls where everything is sent back to a central entity to be processed.

Think about it: banks decide which service you are entitled to... They will process your deposit instantaneously, but it will still take four to five business days to clear a check. It's crap, and it will be run over — just like the taxi industry, travel agents, or even retail.

But it's more than that.

When Visa innovates, only Visa wins. If Bank of America makes something cool, it does it at the exclusion of every other bank that didn’t implement that feature. Bitcoin is different. Over the past two years, 500 companies with 10,000 developers have thrown half a billion dollars to bring Bitcoin to the next level. When those innovations start to hit, like they are already, it will benefit the end users.”

Last year many people didn’t see Bitcoin as a viable currency, but you only had to look at the advantages…

Bitcoin Advantages

Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works.

All transactions and bitcoins issued into existence can be transparently consulted in real time by anyone. All payments can be made without reliance on a third party, and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted.

• Government Can't Freeze

Since there are multiple redundant copies of the transactions database, no one can seize bitcoins. The most someone can do is force the user, by other means, to send the bitcoins to someone else. This means that governments can’t freeze someone’s wealth on a whim.

• Can't Be Taxed

Unless you declare it, there is no way for a third party to intercept transactions of Bitcoins, and thus there is no way to tax it.

• Can't Be Tracked

You and only you own the wallet address, and it can't be traced back unless you disclose it. No one knows how many bitcoins you have. Furthermore, you can open a new wallet with ease.

• Don't Pay a Fee

Sending and receiving bitcoins requires users to keep the Bitcoin client running and connected to other nodes. Essentially, by using bitcoins, users will be contributing to the network, and thus sharing the burden of authorizing transactions. Sharing this work greatly reduces transaction costs, and thus makes transaction costs negligible.

• No “Charge-backs”

Once bitcoins are sent, the transaction cannot be reversed. The new owner now has the bitcoins in his wallet. Once charged, it is impossible to revert.

• They Can't Be Stolen

Only the owner can change the wallet address. Unless the thief has physical access to an owner's computer and the wallet password, they can't transfer bitcoins. This makes it much harder to steal.

Disadvantages:

• Acceptance

Some companies and banks don't take Bitcoin. More than 100,000 places do, and it is growing every day.

• Volatility

The early stage of Bitcoin has seen the price swing wildly. Stability is desired in traditional currencies.

• Ongoing Development

There will be growing pains. New tools, features, and services are being developed to make Bitcoin more secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and maturing.

Perhaps after such a massive run-up you want to buy here.  Don’t. Buy the companies that create bitcoins. The picks and shovels of the Bitcoin gold rush.

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Christian DeHaemer

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Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of Crisis & Opportunity and Managing Director of Wealth Daily. He is also a contributor for Energy & Capital. For more on Christian, see his editor's page.

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