We’ve been a little ‘crypto crazy’ the last few weeks. Actually to be honest with you we’ve been ‘crypto crazy’ since 2010. But it’s only been the last few weeks that people that previously dismissed us as crazy have decided maybe we’re not so crazy after all.
Oh and if you have no idea what ‘crypto’ is, then you’re in for a pleasant surprise. We see it as the biggest transformational change to finance…ever.
We are of course talking about cryptocurrency. Although we somewhat loath to use that term, as not all cryptocurrencies are in fact ‘currency’.
Some are, like bitcoin. Some aren’t, like Ethereum’s token, ether. But we’ll get into the differences between the two some other time. And for simplicity’s sake at this point we’ll keep generally calling them all ‘cryptocurrency’.
In fact we’re working on a project right now that might help newcomers to this world. We hope this project will help people that don’t know about this life changing opportunity take their first steps.
But again, more on that in the coming weeks. Rather than go into confusing detail about the technical differences between cryptocurrencies, we’re going to stick with the bigger picture today. We want to try and convey to you just how significant cryptocurrency is, and why you should introduce this into your investment vocabulary.
Coulda, shoulda, woulda…
Our personal journey with cryptocurrency started with bitcoin all the way back in 2010. We had decided at the time to set up a ‘mining rig’. This would allow us to digitally ‘mine’ bitcoin online. Our view at the time was this was the only way we knew that an average Joe could create their own wealth from nothing.
And that’s not a figurative statement. By using a computer to mine bitcoin you could get some, and even then they were already worth tangible fiat money. At the time bitcoin was around $2 to $3. We had seen it rise from 10 cents to 30 cents, and we wanted a piece of the action.
We quickly realised that we didn’t have the prerequisite knowledge to mine bitcoin. It was too hard. Hindsight says we should have made a stronger effort. But, coulda, shoulda woulda, right?
We then decided to just buy some bitcoin, $1,500 worth. A lot of money for a 25 year old, really. But we had then seen bitcoin go from a couple of bucks to over $20 and then crash back down to $2.
Our ‘traditionally educated’ brain said a resounding ‘no!’ This was too risky, and we didn’t want to risk seeing $1,500 go down the gurgler. Also, it was still hard to even buy and store bitcoin in 2010. Coulda, should, woulda.
We wish we could have seen the future back then. But we couldn’t.
However we do know of one man that can see the future, our colleague Phil Anderson. Well, he’s as close to a ‘future visionary’ as we’ve come across. Phil uses grand economic cycles to predict what’s going to happen to asset classes like stocks and property. Actually, now we think about it, we’re going to have to ask Phil what his grand cycles can see for the future of bitcoin…
Nonetheless, by the time 2011 rolled round we’d figured out a way to scratch bitcoin’s surface. And we dabbled in and out of bitcoin for few more years. We always knew in our gut this was a transformational financial instrument. And the more we studied it, researched it and understood it, the more we were convinced by it.
Then in 2014 we started hearing about ‘altcoins’ these were like bitcoin, but different. They were supposedly ‘better than bitcoin’. Still existing in the digital world they were a new opportunity to create wealth decentralised from government and central bank control.
Many of the ‘altcoins’ around this time were heavily focusing their projects on increased privacy and anonymity. And some of them did incredibly well. In 2014 many ‘altcoins’ shot up in value like bitcoin had. But many just as quickly crashed back down to earth. And there they would stay until 2017.
We preach…and eventually they convert
We tell you this brief personal history of bitcoin and altcoins (cryptocurrency) because we want you to know we’ve seen it all, virtually from the beginning. That means we’ve seen them rise from nothing, boom in price, bust in price. We’ve bought some, sold some, made fast money from some, and done our dinner on others.
We’ve also lost coins, had them stolen, and seen companies become major players in the space and then bankrupt overnight. We’ve seen hacks, attacks and everything else in between.
And it’s because we’ve seen this story unfold that we’re more convinced than ever about the longevity of cryptocurrency.
In February 2014 we were on US TV, The Rick Amato Show, talking about bitcoin. We said that bitcoin would be around longer than any of us would be alive. And the host and in-studio opposition voice laughed at us. ‘Bubble gum wrappers’ was how the other guest described bitcoin. He said bitcoin was worth nothing more than bubble gum wrappers, and it wouldn’t last out the year.
Well…we know how that turned out don’t we?
We’ve been preaching to our colleagues about bitcoin and cryptocurrency since we started in 2013. Some of them entertained our idea. Some didn’t. Some still don’t understand it, and some still think we’re crazy.
But some are coming around to our train of thought and starting to get how enormous cryptocurrency will be for the world. And we’re very happy to say our fellow Money Morning editor, Greg Canavan, is one such colleague. Greg now gets exactly what’s going on.
We had an email exchange with Greg over the last couple of days. He had sent us a link to a Tim Ferriss podcast. Greg was yet to listen to it, but thought we would be interested.
The podcast was talking to one of the most fascinating people in cryptocurrency, Nick Szabo. Here’s the link, and we strongly recommend you listen to it. You can check it out here, or for iTunes users, here. You want episode number 244.
As we said to Greg, take the time to listen to it all. It will help you to understand our view on cryptocurrency. It will help you to understand just how big an opportunity this is.
The next day Greg sent us another email. It reads,
‘I’m about halfway through. Really good. I’m learning a lot.
‘This will be a huge disruptive force for finance in the next decade.
‘And probably many other industries. I don’t think this is just about ‘tech’. It’s about creating a new social/economic architecture that will impact everything we do.’
‘…I’m happy that you get it mate.
‘The way I see it; it’s far more than tech or ‘currency’. A new architecture is a perfect description. I’ve likened it to the creation of a new internet, new financial infrastructure, new capital access, new funding — a whole new investment class and market. It’s really a transformational change that will last well beyond our years on this earth.
‘That’s why I get so excited about it long term — and not just 5–10 years but 100 years and beyond. I’ll keep you up to date with interesting stuff I come across with it, and any conferences or events that are worth attending. But I’m glad [you] get what the impact of this really is.’
And Greg replied again,
‘Exactly. It’s the evolution of the internet. Internet 2.0. Or something.
‘But yeah, please send me interesting bits. I didn’t get this previously because a. I’m lazy and ignorant when it comes to new technology…conceptually I don’t get it and b. because I could never find a source that packaged the explanation together for dumbos. But after reading your stuff on it and listening to this, it’s starting to come together.
‘You’re right, those who dismiss this or don’t understand it will get left behind.’
Greg now gets it. And we hope when you read this and listen to the Tim Ferriss podcast, you’ll get it too. This is a once in a lifetime opportunity – and soon we’re going to show you exactly how to capitalise on it.