Thursday, December 11, 2014

And I'm Back...

Philosophies aside, nine months later and I'm back into Bitcoin. I am a trader after all, am I not?

Meanwhile in the Capital of Slovenia...

Bitcoin in Ljubljana from Bitnik on Vimeo.

Anyone Still Around from 2011?

I can't believe I started blogging about Bitcoin over three years ago! Are any of my original readers still out there?  Who knew we'd go from a market cap of under $50 million to over $5 billion! Crazy!

Anyway, please share your stories in the comments below.

Tuesday, December 9, 2014

Testing 1, 2, 3...

Hello, hello.  Testing 1, 2, 3.  Is anyone still out there?  Still awaiting the Bitcoin Renaissance... I think it's coming but not just yet.

Sunday, March 2, 2014

If Someone Buys Bitcoin Today, They'll be Lucky to See a 300%+ ROI

There's significantly less incentive for someone to speculate on Bitcoin today. To see a return comparable to what we've been seeing over the last couple of years, the amount of capital that would have to be injected into the markets is exponentially more than it was just over a year ago. This is going to cause investors to really do their homework before buying Bitcoin, and recent news events are exactly the sort of thing that will deter new investors.

Next, the vast majority of merchants are using Bitcoin as a protocol, not as a store of value. Anytime we hear of a new merchant choosing to "adopt Bitcoin," what they're actually doing is two-fold. One, they're getting free advertising for themselves, especially local businesses that find themselves on the front of the business sections of their local papers. Two, they're not adopting Bitcoin, they're adopting BitPay or Coinbase. These merchants care about lower fees and irreversible transactions, not so much the value of a Bitcoin itself. There are a few exceptions where the merchants retain some or all of the Bitcoins, but they're the minority, by far.

Third, Bitcoin early-adopters are cashing out. When you hear about Overstock, TigerDirect, Fancy, and others doing hundreds of thousands, if not millions of dollars of business in Bitcoin, those are old Bitcoins that are being sold. No one is going out to buy Bitcoins so they can make purchases they could already make with PayPal. It's inefficient and expensive.

Finally, there are better protocols that are being derived from and have improved upon Bitcoin. If Bitcoin is more useful to businesses as a protocol, then why wouldn't a better protocol oust Bitcoin in the long run? The Bitcoin 2.0s of the world (Ethereum, Open Transactions, Ripple, etc) will eventually unseat Bitcoin. Some say that Bitcoin will remain an ideal store of value, and the other technologies will become the ideal "payment rails," but is Bitcoin really a good store of value if 35% of Bitcoins are held in only 500 addresses?

Anyway, suffice it to say that I'm not done in the crypto-currency space. I've divested into Bitcoin 2.0 technologies, and look forward to seeing the space grow. I expect to see better returns on those investments than I would if I simply held Bitcoin.


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