Sunday, December 17, 2017

Bitcoin - Maybe the Best Survival Currency Ever

Bitcoin - Maybe the Best Survival Currency Ever

After three years of saying maybe I should buy some Bitcoin while it was in the $300-$400 range I finally bought in the middle of 2017 at around $4,000 a Bitcoin. As of December 2017 we are now hitting over $19,000 a Bitcoin and it shows no signs of stopping. That investment has of course has done extremely well nearly tripling my investment in less than six months. If Bitcoin continues to raise at the same rate over 2018 year, I could very well be a millionaire by the start of 2019, but that was not why I purchased it. More importantly, I can access the money anywhere in the world… or even space if needed, even if I am stripped of everything. Perhaps Bitcoin may be the best survival currency ever.

For my “real job”, I create and present on a lot of business solutions and strategies including Blockchain which is the underlying base technology of Bitcoin. The very general concept of all the different blockchain technologies are in essence the same - there are participants which hold accounting-like ledgers and they all share each change to the ledgers on a consensus bases. If one ledger has a block of data chained/linked to it, they all get a copy and have to agree to the change. Usually there are many ledgers, which instills inherent trust among all the participants. The more participants and ledgers the more trust since everyone has to agree on every change to the ledgers - with Blockchain technology, no one is going to pull a fast one and slide something by. Generally all the transactions are encrypted and anonymized.

Bitcoin leverages the Blockchain technology to record the holdings of Bitcoin cryptocurrency. Bitcoin calls the thousands of globally dispersed ledgers “miners”. Miners are all linked, encrypted, and agree on ledger changes. The result is one of the most globally secure currencies ever devised which tracks full or fractional amounts of Bitcoins. In the early days, Bitcoins were actually “mined” or created via a fairly substantial investment of around $1200 considering Bitcoins at that time were selling for under $100. Today that process is so expensive it is less expensive to just purchase Bitcoin. Bitcoin is typically purchased via exchanges such as Coinbase, Kraken, Poloniex and others similar to how you would use an online stock brokerage like an Ameritrade or eTrade. Thought the nerdy folks will hold their own cryptocurrency keys (think of them as stock certificates) on some type of USB device, most people have the online exchanges hold their cryptocurrency keys. The online exchanges allow you to buy and sell just like a stock and most allow you to transfer the sales proceeds easily to Paypal or your regular bank account.

Using Coinbase, the process for me was fairly simple. Set up a Coinbase account, verify some deposits on my bank for a wire transfer and deposits on my credit card accounts and then I was ready to buy. I transferred in money from my bank account which is slower, but less expensive than the higher fee credit card cryptocurrency purchases. Overall the process is pretty simple, but not quite as smooth as online stock trade accounts.

Currently there are hundreds of various cryptocurrencies on the market, however Bitcoin, Ethereum, and Litecoin are the most popular by far.

Early on I made a lot of money during the internet bubble where stocks were soaring, but those valuation increases are nothing compared to what is happening with Bitcoin. I am not a broker, and admittedly willing to throw disposable income at some risky investments. Some investments have panned out and some I lost my shirt, but I have never had an investment that tripled my money in less than six months with no apparent slowdown. I would never have gambled my house payment, or the kids college money, but I wire transferred a fairly substantial amount of cash into an account on Coinbase (think of them as Ameritrade, or eTrade for Bitcoin) and initially purchased three digital currencies. Bitcoin, Ethereum, and Litecoin.

After what appeared to be a stall in Ethereum and Litecoin, I sold them and moved all the money into Bitcoin. In hindsight, it was the right decision and wish I would have dumped all the money into Bitcoin at the start. To date though investments in Ethereum and Litecoin would still have doubled my investment.


Sure I hold out hope that the insane growth continues and I and up a millionaire, but the real reason I wanted to have some money in Bitcoin was that it provides a completely transportable currency even if I am stripped naked and walked over the border of another country. That seems like an extreme example, however throughout history and even currently, political refugees are being forced from their homes with nothing more than their clothes.

How would I start over in another country if that happend to me, or suddenly US cash was worthless, or all Gold and Silver was confiscated like in 1933 as ordered by FDR. Just as I have a stash of cash, hold some silver and gold, the prudent option is to have a currency which can be accessed anyplace in the world. A suitcase of $20s and pound of gold at home does you little good if you are stranded far away from those funds.

Sure it may take a week to reset passwords and reestablish my Coinbase credentials if forced to move without my electronics, however the money would still be there and once accessible, I have now have a tidy sum of Bitcoin which can be transferred into any bank account around the world. If you have not considered Bitcoin or other cryptocurrency as Gold/Silver 2.0, it may be the best investment you could make in your survival.

Bitcoin may be the best survival currency ever, after all US cash, gold and silver have not increased in value much over the last decade. Perhaps it is time to think of survival beyond just physical currencies.

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