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My Thoughts On Bitcoin Spring 2021

What Is Bitcoin

Bitcoin is a digital coin of which there are 21 million of. Some are lost, some are not mined yet and the rest are in circulation. There are approximately 15M-18M coins that are in circulation/on cold wallets/on exchanges. Individual nodes on the network are made up by miners who devote their computer to solving many problems that is required for a functioning blockhain.

The price of Bitcoin has soared from $120/coin to $60K/coin, a 48,000% price increase, or 480x returned on every dollar.

Bitcoin Positives:

  • It’s a simple product, and it’s finished
  • Decentralized – not one node dominates, checks and balances
  • Does not go through ACH networks, DTCC (depository trust and clearing corp)
  • It cannot be blocked, it cannot be stopped
  • Large corporations, hedge funds, bulge bracket Wall St firms have not began buying BTC
  • USD is weakening and may be displaced from world reserve currency
  • Lighting network allows for network effect and faster transactions

Bitcoin Negatives:

  • Volatile – moves fast
  • Less coins on exchanges, more volatility
  • Somewhat correlated to the stock market
  • If the whales dump (holders of 1,000+ BTC) then prices can crash
  • GOV can ban Bitcion
  • Is this coin the winner or will something else win?

Conclusions:

  1. Will compete with gold
  2. Reserve Asset Of The World-Will replace USD/EURO
  3. Will decouple from the economy
  4. Is my insurance policy against failing of the system

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