After being involved in the cryptocurrency space for the last couple of years, I have made three observations. Believe me, I have gathered this information by making sure that at every social gathering I attend, Bitcoin is the topic of conversation. Through this experience, I have found that the people who don’t believe cryptocurrencies will work are the ones who:
Well, most people do know that the Federal Reserve Bank controls the money supply through the monetary policy. However, the majority of the population believes that the Federal Reserve Bank is a government entity. IT IS NOT!!! The federal reserve bank is a private entity and like other private corporations, it has shareholders that receive an annual 6% dividend.
The Wall Street Banks of course. Which ones? “Oh, we’re so sorry that’s private information”, but I’m sure you can make some guesses.
So, let’s think about that. We have a private entity controlling the money supply for the United States government. Anyone else thinks that the Wall Street Banks may have an alternative agenda, other than the well being of the American people? I sure do. Don’t forget to thank these guys for all the lives they ruined in 2008 while getting away scot-free.
Using a 2% inflation target basically means that the dollar in your pocket becomes 2% less valuable than the year before. Don’t believe me. In 1913, the Federal Reserve Bank came into existence with legislation from Congress. In that year, $1 could buy you 16 loafs of bread. Today, that same dollar cannot even buy you one slice of bread. Feel free to thank Wall Street for that. However, what will eventually happen is hyperinflation, exactly what we see happening in Zimbabwe and Venezuela today (That’s why Bitcoin trades at 2x the value in these countries). It might not happen in 20, 50, or even 100 years, but it will eventually happen because our current system is broken.
ABSOLUTELY NOT!! For every $100 that you deposit into the bank. They turn around and lend out $94 dollars of your hard earned money to someone like, Joe, who needs to pay his bills. Joe takes that $94 and puts that into his account, the bank turns around and lends out another $88 to Sally. This cycle continues until someone blows the whistle. Essentially, once your hard earned money gets deposited into your bank account, it is no longer really yours. Big banks know they are about to lose their control of the United States money supply and they will do whatever they can to prevent it.
Out of 50 states, New York State is the only one that requires businesses to apply for a Bit-license to operate any kind of legal entity relating to cryptocurrency. This is the work of the deep seeded financial influence in the state. Banks know they are in trouble and want to make it as difficult as possible for cryptocurrencies to succeed.
The mainstream media has also done an incredible job of portraying Bitcoin as a means to fund criminal activity. But, let me ask you? What is the most commonly used financial instrument in illicit markets today?
It’s not Bitcoin. It’s actually the U.S. Dollar. However, it is true that Bitcoin can be used similar to the Dollar, but just because people have found a negative application of the technology doesn’t make it “dark money”. Think about how the Russians applied Facebook’s technology to influence the U.S. elections. Do we think of Facebook as the “dark web”? Certainly not. It’s the common fallacy of people fear what they don’t know.
They are many reasons, but I will give you some of the main points here.
Just as a heads up. Now that you are aware of these benefits, anytime you read an article claiming that a Wall Street Bank or some form of Government is going to issue their own form of digital currency to dethrone Bitcoin, you can go ahead and stop reading it. Because either the author or their sources have no idea what they are talking about.
In the simplest sense, cryptocurrencies take all the benefits of cash, gold, and credit card payment networks, while leaving all the negatives behind. Cryptocurrencies can settle all transactions, big or small, instantly, like cash, while recording the transactions in the blockchain. Cryptocurrencies can hold and transfer value, like gold, but without the cost and hassle of buying and storing gold bullion. Cryptocurrencies can send or receive money anywhere in the world, like credit card payment networks, while doing so at the fraction of the cost.
Today, it seems like everyone has not only an opinion on Bitcoin but also a price target. There are countless bankers out there who say Bitcoin is overvalued and that it is the bubble of the century, but never in our life time have we seen technology like this. This is hands down the most innovative technology since the invention of the internet, because blockchain is a transformative technology that can be applied to every single industry.
What if we took the market capitalization of Bitcoin and analyzed it through a proper lens? As previously mentioned, cryptocurrencies, like Bitcoin, take the form of cash, gold, and credit card payment networks. Well, let’s break this down.
Monetary Base of the United States: $4 Trillion Dollars
Value of the World’s Gold Market: $8 Trillion Dollars
Value of Credit Payment Networks: Let’s use our national debt of $22 Trillion Dollars
Total: $34 Trillion Dollars
Market Capitalization of Bitcoin: $191 Billion Dollars
Difference: $34 Trillion — $191 Billion = Plenty of Room to Grow
I hope you guys enjoyed this weeks write up! I had an amazing 5K people read my last week’s post and I appreciate all the kind words. Next week, I’ll turn my focus back to digger deeper into some of the smaller coins in the market.
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