My Thoughts on Bitcoin - From a Successful Entrepreneur

[jumpsuitjoe]

Okay, first let me just qualify that I hate saying I'm successful, but I think that having grown two separate companies to over 6 million in annual revenue would qualify me as such. But I just want you to know I'm not some crazy person screaming into the wind.
Here are my thoughts on Cryptocurrency. Is it a bubble? Yes. Are we near the popping point? Not even close.
Think back to the 2008 real estate bubble. You could walk into a room of 100 people and ask who had a 'stated income' mortgage or some other high-risk mortgage and probably 30% of the room would raise their hands. Then you could ask who was flipping homes or had a secondary residence they were holding on spec. Probably another 20% of the room would raise their hands. That's what makes a bubble. The wide-spread impact and reach of a certain industry or vehicle.
Now, walk into a room of 100 people and ask them what Cryptocurrency is. Probably 10 people raise their hands. Ask them how many own any, and I guarantee no one raises their hands.
You see, we're living in an echo chamber where we think that this is all anyone talks about. But it's not. Sure, Bitcoin is getting some attention, but nobody knows what the hell it really is. And no one is really going to be impacted by its ups and downs.
So, in terms of this bubble reaching saturation, we're still a long ways off.
Now, are there ways that this bubble could not pop? Sure. There's a bunch actually.
The biggest reason Crypto could very quickly become legitimate is the current relationship between the US and NK. If war breaks out, then people are going to get spooked. And fear drives speculation, and this type of fear would drive speculation into decentralization.
The second way it would not pop is if the US economy pops first. Which it most likely is going to have a sharp adjustment here soon. And when the dollar takes a beating, unemployment goes up, and things get a bit scary, crypto will again look like a safe haven.
The fact that crypto has been rising as steadily as it has WHILE the dollar has also been rising in value is kind of crazy.
In my opinion, I could see BTC get to 20k. And I don't think it'll actually take that long.
I'm very bullish on crypto as a whole. But I actually don't own that much BTC. I'm taking flyers on smaller currencies and tokens because I like the upside on those more, plus if I'm gonna gamble, I might as well go big or go home.
Any how, just my two cents.

[aleksej996]

Okay, first let me just qualify that I hate saying I'm successful, but I think that having grown two separate companies to over 6 million in annual revenue would qualify me as such.

It might qualify you as successful, but it sure doesn't qualify you as a Bitcoin expert. We have seen economy nobel prize winners be completely wrong on Bitcoin. You can't really make a prediction if you don't really know what Bitcoin brings. It is far more then just decentralization, it very secure, predictable and smart system. By smart, I mean that it has features fiat does not, as every transaction is like a program on it's own, with the multisigs and locktimes and many more to come and that are already here.

Don't mean to be mean, I just wanted to let people know. Not everything is that black and white. World is very complicated.

Is it a bubble?

It really never makes sense to ask that for a currency. Definitions of bubbles and currency is kind of the same. Neither have a value on their own, it is people that give them value only because they expect for other people to value it as well.

My two cents on this is that people haven't seen nothing like Bitcoin before. They try to compare it to things, they can't question the currency itself. Currency has been currency for thousands of years, the difference between the ways it worked is so small compared to difference between all of it and Bitcoin, it is like Bitcoin is something really more then currency itself.

Many things in this world seem like it is revolutionary, but with a little knowledge people see that it isn't. When the revolutionary technology comes, people have a hard time to believe it. It comes in waves I guess, a hype then doubt, but if you take all in the account, there have been nothing like this, not even close. Bitcoin is abstract, based on mathematics itself, it is so much more then what we saw until now. This is what happens when the highest level of science meets the concept of currency.

[XbladeX]

*** It is far more then just decentralization, it very secure, predictable and smart system. By smart, I mean that it has features fiat does not, as every transaction is like a program on it's own, with the multisigs and locktimes and many more to come and that are already here.
***

that decentraization is probaly overated after cuirrent NYA when few companie  get togherther and decided for whole community what will happen.
But as decentraized part i would point Bcash arrival as oposition to main way of BTC. This is actually good we will see what is better.

[Hydrogen]

In reference to the 2008 real estate bubble, it helps if people watch this to help put things into perspective. (It is a youtube clip which shows footage of analysts in the mainstream media warning of a housing bubble as early as 2005)

https://www.youtube.com/watch?v=HQ79Pt2GNJo

What happened with the housing bubble was, buying of real estate/homes was on the decline. Banks lowered their home loan qualification standards in an effort to keep demand steady. The government also incentivized high risk real estate loans which had a high rate of failure. These measures were taken to compensate for the diminishing buying power of the average american which in turn translated to diminished demand for homes/real estate.

If I remember right, eventually these loans (with their increasingly lower standards) were bundled together in a derivative. The problem with home loans is they carry a 15 to 30 year term accumulating high short term debt, expecting to profit over the long term. When a large number of these loans fails early on, without the time necessary for loan issuing banks to make back their money or break even, it can make a decent dent in a bank's liability balance sheet.

Of course one thing not many mention is the "home loan toxic assets" may have only accounted for 15% to 30% of the actual bailout. There may have been other derivatives which failed around the time freddiemac and fanniemae failed.

Long story short the 2008 bubble was driven by lowering standards to prop up diminishing demand which could be the complete opposite of bitcoin's current market which can be defined in terms of increasing demand with higher standards. The 2008 bubble and btc's current market could well be opposites.

[Iranus]

It's impossible to tell when BTC is in a bubble because its value is only determined by supply and demand.  A bubble is usually defined as when the value of an asset differs from its intrinsic value, but BTC doesn't have an intrinsic value as such.  In real estate you could say that the market is propped up by speculation, but at the end of the day you still have a house there. 

Fiat, on the other hand, is deliberately designed to go down in value forever until people's debt to banks starts getting paid back, so if you're looking to hold a currency, BTC is the way to go for me.

I'm no expert, but I doubt there's any way to tell when the (possible) bubble will reach "saturation" either.  It doesn't have to be a global phenomenon where everyone gets involved to just be too high.

[GullWings]

Okay, first let me just qualify that I hate saying I'm successful, but I think that having grown two separate companies to over 6 million in annual revenue would qualify me as such. But I just want you to know I'm not some crazy person screaming into the wind.
Here are my thoughts on Cryptocurrency. Is it a bubble? Yes. Are we near the popping point? Not even close.
Think back to the 2008 real estate bubble. You could walk into a room of 100 people and ask who had a 'stated income' mortgage or some other high-risk mortgage and probably 30% of the room would raise their hands. Then you could ask who was flipping homes or had a secondary residence they were holding on spec. Probably another 20% of the room would raise their hands. That's what makes a bubble. The wide-spread impact and reach of a certain industry or vehicle.
Now, walk into a room of 100 people and ask them what Cryptocurrency is. Probably 10 people raise their hands. Ask them how many own any, and I guarantee no one raises their hands.
You see, we're living in an echo chamber where we think that this is all anyone talks about. But it's not. Sure, Bitcoin is getting some attention, but nobody knows what the hell it really is. And no one is really going to be impacted by its ups and downs.
So, in terms of this bubble reaching saturation, we're still a long ways off.
Now, are there ways that this bubble could not pop? Sure. There's a bunch actually.
The biggest reason Crypto could very quickly become legitimate is the current relationship between the US and NK. If war breaks out, then people are going to get spooked. And fear drives speculation, and this type of fear would drive speculation into decentralization.
The second way it would not pop is if the US economy pops first. Which it most likely is going to have a sharp adjustment here soon. And when the dollar takes a beating, unemployment goes up, and things get a bit scary, crypto will again look like a safe haven.
The fact that crypto has been rising as steadily as it has WHILE the dollar has also been rising in value is kind of crazy.
In my opinion, I could see BTC get to 20k. And I don't think it'll actually take that long.
I'm very bullish on crypto as a whole. But I actually don't own that much BTC. I'm taking flyers on smaller currencies and tokens because I like the upside on those more, plus if I'm gonna gamble, I might as well go big or go home.
Any how, just my two cents.

I kind of agree with your post and I also run my own business turning millions. But i also agree the fellow user that we are not bitcoin experts. And I am not.

However, heres what I see the problem with bitcoin after going through the mindsets of the bitcoin owners here.

First of all, most if not all, are only interested in bitcoin because they see the prospect of Bitcoin going up in value and their wealth goes up. Many of these talks about how great Bitcoin is, decentralised system, P2P with minimal fees etc etc. the problem is, many of which are not interested in USING their bitcoins to pay for products or services, instead they rather hold onto their coins because it will go up in value. At the same time, they are hoping some "game changer" comes into play and alot more merchants start to accept Bitcoins which raise awareness to the mainstream and more people jump on board, but wait, they still would not spend their bitcoins. This is the biggest problem. If talking about "game changer", the game changer is all the bitcoin owners start to use their bitcoins and have a healthy ecosystem happening. Care less about whether Bitcoin will go up in value or not, then you are a true Bitcoin believer. If you are a true believer, you would believe the foundation of the system and what it brings to the World. Not a "true believer" that the coin will triple its value.

The truth is, the mainstream will never jump onto Bitcoin because it is so volatile. And again, let me get this straight, you want more people to jump on the bitcoin because that drives the demand higher and you, as an initial bitcoin holder would triple your worth? So basically, brainwash the new users with the Bitcoin philosophy, let them use Bitcoin for what they are made for so you can benefit in the end?

the only "mainstream" that are on the Bitcoin "bandwagon" are the day traders. Basically, like you, just making the difference in their "investments". But you would agree with me, Bitcoin is bigger than that. It shouldnt be used as a way to increase your wealth.

The conflict of interests is that, the only way the mainstream public will jump onto Bitcoin is when the value of Bitcoin stabilises and when that happens you wont triple your wealth anymore.

If you are a true bitcoin believer, make Satoshi proud and start using Bitcoin instead of having Bitcoin sitting in your wallet waiting for some newbies to jump on and drive up the demand so you can benefit financially from it.

[aleksej996]

At the same time, they are hoping some "game changer" comes into play and alot more merchants start to accept Bitcoins which raise awareness to the mainstream and more people jump on board, but wait, they still would not spend their bitcoins.

The game changer could be the fact that many more merchants start accepting Bitcoin. Bitcoin was designed for the value to go up and early adopters to profit. This is because currency isn't going to be used by anyone if other people don't use it as well, so it gives people incentive to start using it. When many people start using it and the price stabilizes, there is no reason not to use it anymore. It will be well known and accepted by this point and there will be no benefit in hoarding it. This doesn't mean everyone will sell once the maximum value is reached, since now they don't need to sell it, it is currency like any other, why would you sell currency for currency. Bitcoin would still be more useful then fiat, so everyone can keep it. This is why people say you should never sell, because by the time it reaches it potential, you will not need to sell it to use your profit.

The truth is, the mainstream will never jump onto Bitcoin because it is so volatile. And again, let me get this straight, you want more people to jump on the bitcoin because that drives the demand higher and you, as an initial bitcoin holder would triple your worth? So basically, brainwash the new users with the Bitcoin philosophy, let them use Bitcoin for what they are made for so you can benefit in the end?

Never is a long time, eventually price should stabilize, that is the point. Amount of Bitcoin users is growing all the time and so is the adoption of Bitcoin by merchants. This would mean that the price won't be dependent on speculation and emotions anymore, so it should stabilize. Once you start accepting Bitcoin, it is unlikely you will stop, why would you? This means that users don't need to worry about the price going down, since adoption won't and that is the only thing that gives it value as a currency. It is designed for people to benefit form other people adopting it, this is what drives the adoption in the first place, which is necessary for currency.

It shouldnt be used as a way to increase your wealth.

It should. It is what gives you incentive to help setup the system. In order for currency to work, you need people to have your currency and know how to use it. Then it is just up to the agreement of using it as something of value, which is the merchant adoption we were talking about for which are obviously incentives.

The conflict of interests is that, the only way the mainstream public will jump onto Bitcoin is when the value of Bitcoin stabilises and when that happens you wont triple your wealth anymore.

It is not really a conflict of interests. You want it to stabilize, because it can't go up forever so there will be a maximum of your earnings and this will be when it stabilizes. You can't expect that something will keep going up forever, there is a limit to how many things of value are there in the world. This is your end goal, buy until it is so largely adopted that it is stable and you maxed out your profits, at which point you stop buying, but still have no reason to sell as people accept it as payment and it is better then currency you would sell it for.

If you are a true bitcoin believer, make Satoshi proud and start using Bitcoin instead of having Bitcoin sitting in your wallet waiting for some newbies to jump on and drive up the demand so you can benefit financially from it.

You can and should do both. When you want to buy something and you can buy it with bitcoins, then do so, it is easier, more secure and private that way and you will be driving up the value of Bitcoin by increasing it's adoption. If you want to sell something, accept selling it for bitcoins for the same reasons. If you don't need to buy anything and don't want to sell anything, then don't and keep at least a portion of your savings in bitcoins, that way you profit and increase the adoption, since merchants will have more people ready to buy their product with bitcoins.