Yesterday was the first time I paid cash for Bitcoins. It was quite a feeling.
I held the cash in one hand, something I had trusted all my life. And, the cash seemed like so much play money: monopoly money. I realized the dollars were even worse than play money, which I had never valued. The US dollars had betrayed my trust. It was ponzi money. Money that has been and would continue to be devalued by the government if I dared to continue to hold it in my hands.
It felt like such a joke, I could trade it for Bitcoins that could not be devalued by any government and which are in fact grossly undervalued.
I actually bought some physical Bitcoins in person from Roger Ver of Memory Dealers. While I'm not a great fan of the counter-party risk inherit in physical Bitcoins, I still think they have a place. I'm planning on using them for gifts or conversation starters. The nice thing about giving physical Bitcoin's is I don't need to tell the receivers about installing a wallet, making sure their computer is secure, or choosing an exchange. I'm just going to tell them save them until they're worth thousands or they are a collectible.
There is some debate about how to present Bitcoin. There is an opinion that we should only promote Bitcoin as useful and not as an investment. They feel promoting Bitcoin as an investment only fuels detractors.
I tell all my friends they should have some Bitcoin. I tell for the simple reason that I don't want them to hate me for letting them miss out if and when Bitcoin becomes the world currency. The fact is Bitcoin is grossly undervalued. Bitcoin has the potential to be the world's currency and yet it only has a market cap of $50 million. If Bitcoin is adopted as the world currency, each Bitcoin would be worth $3.5 million in today's dollars.
Bitcoin is highly volatile and I expect the ride up to very bumpy. I am actually very pleased by all the "early adopters" dumping Bitcoin and driving the price down. This is redistributing the Bitcoins and helping to grow and make more robust the Bitcoin economy. People often don't realize that over 60% of the Bitcoins have yet to be distributed and that the Bitcoin distribution is already far more fair than the current distribution of wealth in the US. In the US, the top 1% controls more than 40% of the wealth. The distribution of Bitcoin is fairer than the status quo.
Then, there is gold and silver. Wonderful things. Which, I could never truly appreciate until Bitcoin started me down this financial adventure. Of course, everyone should hold some gold and silver too. Bitcoin has lead me to some real gems on the Internet:
- maxkeiser.com
- freedomainradio.com
For me now, investment wise, the question I ask is what are the odds of Bitcoin double or tripling in the next year versus gold? Well, the odds of gold tripling are pretty good. But, the odds of Bitcoin tripling again and again are even better. People should have both.
If you'd like to experience the feeling of trading ponzi money for physical Bitcoins, Roger Ver will be at CES at the Bitcoin booth selling physical Bitcoins this week.
