Have you been following the recent developments around Bitcoin?
If so, you may have picked up on some FUD (fear, uncertainty and doubt) around the world’s favorite coin!
Let’s recap the most recent developments in such a way that you’ll understand them:
In recent months, people are saying Bitcoin has a scaling problem. The Bitcoin network can only handle 5-8 transactions per second. How can it ever compete with credit card transactions, which are processed at thousands per second?
Bitcoin has, in the past, mostly been developed by the Core development team. Core has come up with a great solution for scaling, called SegWit. I won’t bother you with the technical details. But rest assured that the SegWit software has been finished for a year and well tested.
Since SegWit couldn’t get enough consensus in its support, it has never activated. But now, another team of developers have taken the SegWit code, modified it and called it SegWit2x.
SegWit2x, is basically SegWit with a transaction block increase hard fork a few months later. The Core team does not approve of SegWit2x, saying it’s being pushed through at too high a speed. And with only 80% consensus instead of 95%.
The Core team also does not like the block size increase, since increasing the block size does not scale up the number of transactions per second by a whole lot. But at the same time, bigger blocks make the blockchain a lot bigger. This means fewer people will want to run a copy. This, in turn, means that Bitcoin will become more centralized. Something that goes against the original vision of Bitcoin, where decentralization plays a big role.
On top of that, the fact that Bitcoin was recently having lots of problems with transaction processing, is because somebody was spamming lots of small transactions to make it seem like it was having problems scaling up. This has been done to push the big-block agenda, which leads to more centralization, which leads to more power for Bitcoin miners.
People are also fearing a chain split. In such an event there will be two Bitcoins, one of which will be the real one and the other will be a so called ‘altcoin’. In the event of a chain split, you’ll own Bitcoin on both chains. What happens to their prices?
Not any single person is calling the shots in Bitcoin. It’s not run by a company. It does not have a CEO that makes all the decisions on how it scales up.
All this uncertainty is understandably pretty scary to a lot of wannabe Bitcoin owners!
You’d think that all this is a big downside to Bitcoin. But in reality… nothing could be farther from the truth!
Why This Is The Best Time To Get Started With Bitcoin
As they say in the software world: “It’s not a bug. It’s a feature.”.
And that’s precisely what’s true for Bitcoin. You see, it has already been through a lot. Bitcoin has survived the Silk Road collapse and the Mt. Gox collapse.
There are plenty of people with interests in fiat money who absolutely detest Bitcoin and want to see it die. They’ll try to attack it in every way possible: in the news, legally, through manipulation of its price, etc.
Bitcoin has survived all that for as long as it’s been around. So we can conclude that that Bitcoin is indeed a resilient coin.
It’s true that there is currently a big fight going on over how to scale up Bitcoin. But in the end, very few people in the Bitcoin community want to see it fail. Sure, the miners want greater control over it. But they do not want to see it fail. Altough Core developer Luke Dashjr does claim that SegWit2x will fail and that its purpose is to stall SegWit.
The whole kerfuffle seems like a big deal now. But in reality, there will be a lot more scaling debates in the future. Software is never ‘finished’, and this is true for Bitcoin as well. It will have to continue scaling and we will reach many more crossroads, just as we are now.
So why is this the best time to get started in Bitcoin?
Because everybody is having the FUD-shudders, which is keeping Bitcoin’s price down.
But Bitcoin will most likely survive its scaling, meaning that its price is only going to increase in the long run!
Bitcoin Isn’t Going Anywhere… Except Up!
We only have to look at a handful of recent developments in order to see where Bitcoin is headed in 2017 and beyond.
1. Delaware Regulation
Take for example the fact that the state of Delaware has recently passed historic blockchain regulation. This regulation concerns amendments to state law that make it perfectly clear that you are entitled to trade stocks on the blockchain. This is pretty strong evidence that Delaware considers the blockchain as a thing that is here to stay. The blockchain is a public ledger of transactions, that are guaranteed to be untampered with. There are many conceivable applications beyond Bitcoin. The fact that the state of Delaware embraces the blockchain, is good news for anything blockchain-powered. And that means Bitcoin, too!
2. Five Reasons
Or take for example these five reasons why Bitcoin is here to stay. The article eloquently discusses a number of reasons why Bitcoin is going to be staying with us for a long, long time. The arguments mainly come down to the facts that Bitcoin is an invention whose benefits are very compatible with our existing lifestyles. And you can also easily try it out, because the entry barrier is so incredibly low. Bitcoin is not a fad. At some point, people thought the Internet was a fad too. We all know how that went.
3. Bitcoin Fanboyism In Thailand
Let’s also have a look at what Bitcoin is doing in Thailand. Citizens are now just beginning to catch the so called “Bitcoin bug”. Some Thais are purchasing cryptocoin mining equipment en masse in order to mine their own cryptocoins. There is currently a nationwide shortage of hardware due to the high demand. Other Thais are accepting Bitcoin in their stores. One 80 year old noodle shop has just started accepting Bitcoin. Thai trade volumes have skyrocketed. Bitcoin is becoming more and more visible in Thailand, and frequently makes the news.
4. Returns on Investments
More and more people who have been successful at getting good returns on Bitcoin investments, are crawling out of the woodworks to share their experiences. It’s a long story. But the long story short is that, while Bitcoin might be in short term bubbles one after another, in the long term it will likely do really well. So buying & holding is a really great strategy for those who want to get in on the action, but have no experience in trading. More and more people will get wind of this. More people will buy. Then people will take some short term profits. Bitcoin will keep cycling like this all the way to the proverbial moon.
5. Expert Predictions
Jeremy Liew, successful Snapchat investor and partner at Lightspeed Venture Partners, a company that aims to accelerate disrupting innovations, predicts that the demand for Bitcoin is only going to go up. With the world becoming more and more uncertain as time goes on, people lose trust in fiat money and want a safe place to store their cash. So what do they do? They move some of their cash into Bitcoin, which is starting to become more and more of a safe heaven as a store of value. Especially in the long run. Depending on who you ask, Bitcoin can reach a price of between $5000 to $1 million within 3-5 years.
6. South Korea Prepares For Bitcoin Legally
South Korea knows Bitcoin is coming and is preparing for it legally. They are changing the Electronic Financial Transactions Act. This will mean that traders, exchanges, brokerage firms and others that participate in the Bitcoin ecosystem, will have to register themselves with the Financial Services Commission in. By doing so, South Korea makes a strong statement that it is willing to regard Bitcoin as real money.
7. Japan Testing Bitcoin In 260,000 Stores
At first, Bitcoin payments will be rolled out to a few hundred glasses stores in Japan. After that, the rest of the 260,000 will follow. Mass adoption like this will force Bitcoin to scale up and, dare I say it, succeed. It’s sink or swim time for Bitcoin. I’m betting it’s gonna swim!
Will Bitcoin Win?
But wait… there exist more than 800 crypto coins now. How do we know that it will be Bitcoin that will emerge the victor, and not some other altcoin?
Let’s think rationally about it. It’s true that there might exist a lot of altcoins. But most of these are so called shitcoins that will never go anywhere. At any given time, it’s the top 10, or maybe the top 20 coins, that even remotely stand a chance at becoming one of the top dog coins in the world of tomorrow.
From the top 20 down, market caps and volumes start sinking really hard. These coins aren’t being traded very actively in comparison to the coins higher up in the list. And momentarily, the top 10 is dominated by Bitcoin, Ethereum, Ripple, Litecoin, Stratis and a handful of others.
Let’s run by a few to explain why I think they won’t surpass Bitcoin:
Ethereum was designed to be able to run applications on the blockchain. It’s supposed to be a sort of global, decentralized super computer, on which people can run applications for Ether tokens. Ethereum is therefore not really a store of value, such as Bitcoin. Ethereum offers a lot of functionality, because people have to be able to develop applications for it. This is all really great and all, but it also means Ethereum has a larger attack surface.
Ethereum has temporarily broken multiple times now, when its blockchain was used for ICO’s of many coins, the lion’s share of which are shitcoins that are never going to go anywhere. Ethereum has promise, but much like Bitcoin, it is wrestling with scaling problems. Bitcoin is much simpler than Ethereum and doesn’t offer anywhere near Ethereum’s functionality. But, it has also never broken down. All the more reason to stick with Bitcoin as a store of value, for the time being.
Ripple was designed to make life easier for banks in one country to send money transfers to banks in other countries. Currently, banks are using the Swift system for this. Swift takes a long time and is fairly expensive. This is a great example of why blockchain holds such tremendous power. Swift transfers go past several clearance points, overseen by (presumably) trusted human workers. These human workers don’t work for free. Everybody needs to skim something off the top. Not so with blockchain.
The blockchain will transfer money without any human oversight. The blockchain is so trustworthy that it doesn’t even require trust. It’s trustless. Much like the fact that you don’t need to ‘trust’ the sun to come up tomorrow, because you know it will. Much like the fact that you don’t need to ‘trust’ gravity to be around tomorrow all day long, because you know it will. Ripple is a very low priced coin, which is in use by a fraction of banks today. But more are joining the Ripple network to do cheap and fast money transfers. This coin can get really big when the whole banking world jumps on top of it.
A little bit of Ripple gets shredded with every transaction, making it deflationary by nature. It will only become worth more due to this. All in all, this is a great coin to buy & hold. But keep in mind that it’s designed for banks… so maybe Ripple won’t gain widespread store and supermarket acceptance, such as Bitcoin will in the near future.
Litecoin is very similar to Bitcoin. In fact, people are using it as a hedge against Bitcoin crashes. When Bitcoin comes down, Litecoin usually goes up a little. Litecoin has the tendency to sit around certain price points for a long time. It hovered around $15 for a long time. Then around $30 for a long time. Then it had an outbreak to $50. Then it fell to around $45 and, you guessed it, is now hovering around there for a long time.
Litecoin might very well become a popular alternative to Bitcoin, especially if Bitcoin becomes so expensive that people will start looking for alternatives. Litecoin is already scaled up in the past, since it has already successfully implemented SegWit, even though it didn’t really need it at the time. So you might say that Litecoin is better managed than Bitcoin.
It could break out at some point. But for now, it’s still much smaller than Bitcoin. Bitcoin was also around the same price points as Litecoin is now. So you never know where it’s gonna go. But Bitcoin has the first mover’s advantage. While I foresee both Bitcoin and Litecoin growing, I do not foresee Litecoin surpassing Bitcoin anytime soon.
Stratis is currently number 10 in the coin list by market cap. So why do I want to discuss this coin and not numbers 5 through 9?
Stratis stands out to me. The Stratis Platform aims to offer Blockchain-as-a-Service. Blockchain isn’t just useful for public money transfer ledgers. It has many conceivable uses. Many items in this world need to have their authenticity verified, such as concert tickets, expensive jewels, etc. All of these products could potentially be labeled with blockchain addresses, which the owners can then use to verify their authenticity.
In the old economy (the one from previous decades), the transfer of these products required not a blockchain but a humanchain. A chain of fallible and flawed humans that verify the product’s authenticity at every step. Take diamonds, for example. A diamond is dug out of hole in the ground and then makes its way to your local jewelry store. The tracking of a diamond’s journey used to involve many humans, every step of the way.
In the future, blockchain will replace the humanchain. The blockchain will cost many people their jobs. I suggest those people buy some Stratis. They’re going to need it in a world where people are continuously and relentlessy being replaced by automation.
Stratis is a stand-out coin. Like Ripple, it’s aimed at big finance. Big finance coins are great ‘buy & hold’ material. Through intensive usage, the big finance world can increase this coin’s value by quite a lot. It’s still relatively cheap, too. If you decide to stock up on this, you’ll still be very much an early bird.
Stratis isn’t really a store of value like Bitcoin, though. So like Ethereum, it might not be able to dethrone Bitcoin, for that very same reason.
Getting Active With Your Bitcoin
Some people don’t want to simply buy & hold, but would rather get a bit more active with it. The obvious answer is to start trading. If you want to trade, then you better get your mindset right first. Trading with a broken mindset, is like digging a ditch with a rake. You’ll be spinning your wheels and getting nowhere fast.
If you want to become a trader, then you will have to spend at least a few dozen hours learning Technical Analysis, or TA for short. Technical Analysis is the noble art of learning to recognize what a coin is going to do next, based on nothing more than its price movements. So that means you’re neglecting all developments around the coin that you might read about in the news. It’s 100% pattern analysis.
Technical Analysis is very difficult to learn and you’re going to make some losses on some trades before you start scoring wins.
Some people will try to ride a so called ‘pump & dump’, where a group of people will pump a coin and then dump it. The idea is to buy the coin before the pump, and sell it somewhere before the dump. However, informed insiders have already likely bought the coin before the pump was announced. They score all the gains. This leaves the uninformed non-insiders holding a bag of dumped shitcoins.
Yet another option, is to commit some of your Bitcoin to a revenue sharing opportunity. There exist many such opportunities. Most of them are ponzi scams. I must confess that I once fell for such a scam, which promised 7.2% daily returns on my Bitcoin.
That’s a deal that’s too good to be true. With 7.2% daily returns, you can start with an investment of 0.2 Bitcoin, reinvest 100% of your earnings, and you’ll own all the Bitcoin that could ever exist (21 million) after 266 days!
However, among the shedload of ponzi scams, one really great revenue sharing opportunity can be found. And that is USI-Tech, all the details of which you will find explained on https://retireonbitcoin.net. Long story short: they profitably trade your Bitcoin, keep some for themselves, and give some to you.
USI-Tech has been the talk of the town in recent months. They offer between 0.75% to 1.25% daily returns on your Bitcoin. On business days only, by the way.
You’ll be buying €50 packages and slowly but surely turning them into €70 packages. The returns on capital may be used to rebuy more €50 packages. Due to the fact that you will have to recommit your daily returns on capital in order to set yourself up for an exponential growth curve, your actual daily return percentage (over your whole committed amount of Bitcoin) will actually be closer to 0.5% per business day.
That’s still more than your bank will give you per year, this day and age.
Long story short, USI-Tech’s revenue sharing has the potential to give you significant returns on capital in the long run. But at the same time, it is not high enough to be a blatant ponzi scam, such as the 7.2% opportunity that I described earlier (and which shall remain unnamed).
USI-Tech is starting to look more and more like a real company, seeing as how they are now appearing in mainstream news after having organized a convention. The owners are constantly making public appearances and are very transparent about everything.
According to the owner of “Retire on Bitcoin”, he recently spoke with USI-Tech insiders, who confirmed to him that they had seen USI-Tech’s trading records with their own eyes. Rumor has it that the company will soon produce proof of its activities publicly, in a bid to create more trust all around.
Whatever you decide to do, never commit more Bitcoin than you are willing to lose.
This article does not officially dispense financial advice. You are entirely responsible for any actions you may take based on the information herein. The author participates in the USI-Tech revenue sharing program that is discussed on https://retireonbitcoin.net.