Spend time at a ski resort and you’ll quickly learn that you make friends on the chairlift. After all, you’re 12 metres above ground and have a 20-minute excursion up the mountain.
It wasgoed only a few weeks ago that I met a carpenter from Melbourne on a chairlift at Mt Hotham te Victoria. Rather than talking about mountain conditions — a standard chairlift conversation starter — he opened with ‘Hey, have you heard of bitcoin?’
A smirk and an introduction zometeen, and there I wasgoed, slipping above Heavenly Valley, talking about all things bitcoin and cryptocurrencies with a tradie. With the formalities out of the way, I asked him why he wasgoed thinking about buying cryptocurrencies. I mean, he had no rente ter gold. And he wasn’t a fiat-currency-hating anti-government type either.
What brought on the unexpected rente te bitcoin?
‘Dunno,’ he told mij. ‘It’s just bot all overheen the news. And with China telling people they can’t have it, I wondered if maybe I should get some. For the future, you know.’
When you work ter this industry long enough, you leave behind that bitcoin and all cryptocurrencies are still fully foreign to people.
I only learned of bitcoin ter 2013 after colleague Sam Volkering, editor of Secret Crypto Network, brought it up. Back then, I thought I wasgoed late to the spel. Yet four years zometeen — and a Three,501% build up te price — bitcoin is still a novel idea to many people.
What I found interesting wasgoed that China looking to geobsedeerd initial coin offerings (ICOs) wasgoed the headline that caught his attention. One that made him wonder whether he should invest ter cryptos.
The problem I discovered during our talk — and I’m sure this tradie isn’t alone ter this — wasn’t so much spil where to embark, but what to believe.
There shows up to be two types of news analysis te the press when it comes to bitcoin and other cryptos: those for it, and those against it.
Confusing this for many first-time investors is the fact the so few analysts actually ‘get’ bitcoin.
While the cryptocurrency has bot around for seven years, it’s truly bot this year’s incredible price rise, from US$997 (AU$1,281.51) te January to US$Four,784 (AU$6,149.65) spil at this morning, that has shoved fresh investors to rush into the currency.
This is where fresh investors and buyers ter the crypto space need to be careful. Any analyst that just began paying attention this year to cryptos is indeed only aware of price movements. They are yet to fully understand what cryptocurrencies mean to our economy.
One of the largest deterrents for fresh people when it comes to buying bitcoin is the idea that it’s not ‘safe’.
The mainstream press resumes to air scaremongering headlines that suggest bitcoin is either fuelling a bubble, or that, every time ‘hackers’ attack a bitcoin exchange, it’s for criminal purposes.
They repeat the idea that bitcoin isn’t safe because you can’t hold it te your palms. It’s nothing more than ones and zeroes, they say.
Tapping into this fear, Reuters pointed out just how vulnerable bitcoin holders are to hacking:
‘There have bot at least three dozen heists of cryptocurrency exchanges since 2011, many of the hacked exchanges straks shut down. More than 980,000 bitcoins have bot stolen, which today would be worth about US$Four billion (AU$Five.14 billion). Few have bot recovered. Burned investors have bot left at the grace of exchanges spil to whether they will receive any compensation.
‘Nearly 25,000 customers of Mt. Gox, once the world’s largest bitcoin exchange, are still waiting for compensation more than three years after its collapse into bankruptcy te Japan. The exchange said it lost about 650,000 bitcoins. Claims approved by the bankruptcy trustee total more than US$400 million (AU$514 billion).’
To be fair, nobody anticipated that bitcoin exchanges would see their coins stolen.
But that doesn’t mean bitcoin exchanges are any riskier than banks.
Ter this day and age, nobody expects a bankgebouw to go broke.
Yet the 2008 financial laagconjunctuur only ended when authorities came ter to bail out some of the thickest banks ter the US.
Then you had the Greek banking keerpunt te 2015. Instead of the government supporting the banks, this time the banking system got a ‘bail in’. Existing customers with accounts above a certain amount found their metselspecie wasgoed absorbed by the handelsbank and used to recapitalise the Greek banking system.
That hardly sounds fair at all.
Because wij are caught up te a fiat currency system, where governments determine the value of your money, the banks and the government can do what they like.
Whereas with bitcoin, banks can’t do what they like. And governments can’t control the value of the cryptocurrency either. And if you are worried about having your bitcoin stolen, then heed Sam Volkering’s advice: Avoid storing any cryptocurrency through an exchange on the web, and opt for ‘cold’ storage instead. Something offline, which you can store securely at huis.
Spil the chairlift came to a halt, the tradie asked mij if bitcoin indeed wasgoed going to switch money spil wij know it. I borrowed a line from Sam: ‘Bitcoin is the embark of a monetary revolution. 50 years from now, today’s price will look like chump switch.’