This post is about sharing what I know, what I feel and why. It should not be read as advice to buy Bitcoin. Just because I did and will continue too, it’s no reason for you to buy.
Only buy Bitcoin if you can afford and are prepared to see your purchase/investment become totally worthless, maybe within minutes.
I think that’s as clear as I can be.
On the up side…
Bitcoin is on the rise again. Bitcoin may start appearing in mainstream media. I think the BBC has been excellent with its coverage so far. Once Bitcoin is in the media again, some people will talk and seek to know more.
I hope this post helps you to ‘know more’. I don’t know much, I’m not a financial expert, I don’t even have a Bitcoin Wallet yet. I tried to create a wallet on my iPhone and my Mac, but I failed. All my Bitcoin are stored in Japan and I have not made a single purchase using Bitcoin. This blog post will not help you with any info about wallets and spending Bitcoin.
That’s a huge problem with Bitcoin right now, it really isn’t ready for mainstream consumers yet. You cannot just hop online and buy and spend Bitcoin easily. The day will come when Bitcoin is easy to buy and spend, it’s just not today. Think of it like Broadband internet, it hasn’t always been fast and easy, do you remember 56K modem connections to the internet? That’s where Bitcoin is right now, it’s a bit painful and not for everyone.
I first came across Bitcoin on Twitter in 2010, I saw a tweet from @LoudMouthMan, he’s an eminent technical guy and a really good man. I trust him, that’s why I clicked his link and read about Bitcoin in 2010, my verdict at the time? I ‘got it’ but it was one for the pending’ tray.
In mid 2012 another eminent technical guy and very good friend of mine @Kjakman (Kjetil) asked me, “Daren, have you bought Bitcoin yet?” “No,” I replied. “Buy some” he said, then the subject changed.
New Years Eve 2012 @Kjakman asks again, as fireworks and smoke were filling the Amsterdam night sky, “Hey Daren, have you bought Bitcoin yet?” “No,” I replied. “Buy some” he said and then the subject changed.
Fast forward to March 2013 I get a phone call and it’s @Kjakman. “Hey Daren have you bought any Bitcoin?” “No,” I said. “Buy some and here’s why…” The phone call lasted another fifteen minutes or so, I hang up and decide to buy Bitcoin. I could have bought at 15 cents and $1 if I’d have acted when first nudged by Kjetil. Thank you for not giving up on me Kjetil, I bought at $43.
It took me another three weeks, international wire transfers, visits to my bank branch and sending a scanned copy of my passport to a Russian owned money transfer service based in the West Indies. You can guess I was nervous. Because of my nerves I only invested $1000, I made a judgement that if I lost it all, I would have ‘died tryin’ and that would be that, no sulking.
I trusted what I saw online at OKPay and they were an excellent company to deal with. My dollars ended up in my account at MtGox.com (the Bitcoin exchange in Japan) and I bought my Bitcoin for $43 each. Within weeks the value soared to $266. I cashed out my original stake again via OKPay and the money I risked was safely back in my UK Bank Account. WIN!
Now I have 20 Bitcoin totally free. I’ve tried to trade them a little and lost every time. To be frank, a ‘day trader’ I am not.
Once my money was back in the UK, I also bought three more Bitcoin via Blockchain.com – it was straight bank transfer from my bank account to theirs, but they don’t offer this service now.
Despite UK banks making it very difficult to buy Bitcoin I’m very excited about a “Bitcoin future”. Once I understood Bitcoin more, it became a very obvious solution for the future and possibly the most exciting thing to happen for ‘everyday people’ empowerment since the World Wide Web itself.
Why wouldn’t you want digital cash on your phone or PC?
Why do you have to go to the bank online to pay someone? In real life I pass over cash for lots of things, no need for the bank. The bank doesn’t know if I lend my son £100 or buy a car for £5,000 every time I do that. I like cash; I think I like the idea of digital cash even more. Paypal is not digital cash, and their charges are a scandal in my opinion. I accepted PayPal this week for a £67 eBay transaction. They (PayPal) charged me over £3 to process the transaction. It shouldn’t cost that much to receive money from another person for a simple transaction (a car fog light in case you’re wondering).
If you click my earlier posts on this blog you can learn the fundamentals of Bitcoin and it’s decentralization from banks and government. For the last part of this post I’m going to share the “Bitcoin dream” that I’ve created for myself:
The Bitcoin I own are not for me, they are for my children and my children’s children. My dream is that ‘Grandad Daren’ is lauded as super smart and brave for generations to come. A bit like a friend of mine when I was younger, his family were skint, but they were left some shares in his Great Grandad’s Will. The shares were bought in the 1930’s and worth hundreds of thousands of pounds in 1994. It was amazing! It totally changed their lives!
I’ve bought Bitcoin because I see a future for digital cash. There will only ever be 21 million Bitcoin, that’s it, no more, ever! Unlike current cash from banks, they just print more, which effects inflation and makes our cash worth less every year.
So, only 21 million Bitcoin, but billions of people on earth connected to the same network, exchanging digital cash with each other. If the gamble (and it is a gamble that Bitcoin will be “the digital currency”) pays off, Bitcoin will be in big demand and a Bitcoin could be worth many many thousands of pounds per Bitcoin. It’s a bit like buying a nugget of gold in California circa 1849.
One thing is for sure and undeniable, the mathematics and architecture of Bitcoin is genius. I like genius and I’m prepared to back it with my hard-earned money.
Finally, on the question of how Bitcoin is valued, we all value everything at what we think it’s worth.