A year ago, the idea that Bitcoin and cryptocurrencies were going to change the world was becoming the consensus opinion. Today, not so much.
The digital currencynow trades below $5,000. Its 77% off its high near $20,000 in January. Other cryptos are collapsing, too.
Blockchain technology, cryptocurrency mining. Server roomGetty
There is a catalyst. People who follow digital tokens blame thehard forkof Bitcoin Cash. The smaller, namesake cryptocurrency is itself a fork of Bitcoin proper. But last week, its developers and miners could not agree on the future of the digital token. So they decided to split into two competing cryptos, Bitcoin ABC and Bitcoin Satoshis Vision (SV).
If that seems like an inherently bad idea, it is. Bitcoin is an open source project. Developers are free to duplicate the base code and create cryptocurrencies at will. And they have. As of November 2018, there are 2,502 cryptocurrencies, according to alistcompiled at Investing.com. The cumulative market capitalization of these tokens is $142 billion, although it had been much higher.
Forgive me. Im burying the lede. The problem with Bitcoin, and cryptocurrency in general, is not forking. Its that developers should not be able tocreatecurrency, at all.
I began writing inJanuarythat cryptocurrencies were where the internet was in the dot-com era, and inFebruarythat most of these thousands of cryptos were headed to zero. At the time, it was not a popular position. I prefaced my view on two things every potential investor needs to understand about me too digital coins: There is no use case, and worse, its unlikely they will ever represent a store of value.
Keep in mind, many things can represent a store of value. Collectibles like art, baseball cards and signed memorabilia immediately come to mind. Cryptocurrencies, at least the vast majority of them, will never be that.
Bill Harris, a former chief executive officer atPayPal, made headlines in August when he wrote atRecode: OK, Ill say it: Bitcoin is a scam.
Harris argues Bitcoin is a pump-and-dump scheme, where promoters push up the value of dubious investments with hype and relentless advocacy. As the price surges and enthusiasm is greatest, they dump everything, leaving unsuspecting investors holding worthless securities.
Admittedly, I have made this case about so-called alternative coins. Investing in an Initial Coin Offering is like speculating in a highly promoted junior gold mining company where the prospect of finding actual gold is nil. There will be price volatility and plenty of promises made. But in the end, the investment is worthless. And it was always going to be worthless.
But Harris is conflating Bitcoin with alternative coins. That is a mistake, I believe.
A pure digital currency is a good idea.It takes power away from central authority. The problem is oversupply. There are currently too many coins and too many charlatans.
This will pass. The Securities and Exchange Commission will round up the fraudsters. Their fake investment premises will lead to a great reckoning. Most ICOs will go to zero because they will be unable to pass the test of legitimate government oversight.
That could leave Bitcoin as one of the last digital coins standing. When that happens, my guess is it will ultimately be more valuable than it is today. However, there is plenty of pain ahead as pump-and-dump schemes are uncovered, and most coins collapse souring the mood for all their peers.
The play for stock investors is blockchain, Bitcoins cryptographic infrastructure
Ultimately, this digital ledger system is going to find its way into global supply chains and financial services because it systematically removes middling trusted agents for verification.
Blockchain will make legions of accountants, lawyers and back office personnel redundant.
IDC, a global information technology research firm, sees blockchain as part of alarger digital transformation. The shift could be worth $7 trillion by 2022.
Microsoftwas an early convert to the power of blockchain. Itbegan workingwith financial services start-ups in 2016. More recently, the Redmond, Wash., software giant has been touting the scalability of its Azure cloud computing platform to run ledger systems. The company is even working on a blockchain-as-a-service tool.
Shares trade at 20x forward earnings. The market capitalization has come down to $780 billion in the last leg of the tech wreck. The stock would be a great pickup in the low $90s.
- How and where do I report Cryptocurrency coin-to-coin ... - March 22nd, 2019
- Hundreds of Millions in Cryptocurrency Vanishes After ... - March 11th, 2019
- Fidelity's new cryptocurrency company is up and running ... - March 9th, 2019
- JPMorgan is creating its own cryptocurrency - CNN - March 6th, 2019
- Cryptocurrency Exchange Says It Can't Access $190 Million ... - February 5th, 2019
- What's the Best Cryptocurrency to Invest in Today? - January 9th, 2019
- Cryptocurrency Trading Easy tips to get started | AvaTrade - January 9th, 2019
- Thailand Issues 4 Cryptocurrency Licenses, Rejects 2 ... - January 9th, 2019
- NASDAQ, Fidelity Invest in New Cryptocurrency Exchange ... - January 9th, 2019
- Cryptocurrency News | Cryptocurrency News | Blockchain ... - January 9th, 2019
- Differences Between Cryptocurrency Coins and Tokens - January 9th, 2019
- Cryptocurrency Charts - January 8th, 2019
- What is cryptocurrency? - cointelegraph.com - January 4th, 2019
- Cryptocurrency - Simple English Wikipedia, the free encyclopedia - December 25th, 2018
- Is Cryptocurrency Dead for Good? | Investopedia - December 6th, 2018
- Cryptocurrency scammers dupe Singaporeans out of $78,000 in ... - December 6th, 2018
- Invest in Cryptocurrency With Spare Change - Black Enterprise - November 28th, 2018
- What is Mining Cryptocurrency? What you need to know... - November 26th, 2018
- Saudi Arabia Will Launch Its Own Cryptocurrency in 2019 ... - November 23rd, 2018
- Bitcoin and Other Cryptocurrency Prices Are Crashing Again ... - November 17th, 2018
- Homepage - Cryptocurrency Army - November 14th, 2018
- Cryptocurrency - Simple English Wikipedia, the free ... - November 14th, 2018
- How To Create Your Own Cryptocurrency - fastcompany.com - November 14th, 2018
- Cryptocurrency price plunge worse than bursting of dotcom ... - September 18th, 2018
- Iran, North Korea and Venezuela turning to cryptocurrency ... - September 12th, 2018
- SEC halts trading in two cryptocurrency products, citing ... - September 12th, 2018
- Cryptocurrency News, ICO Reviews & Blockchain Updates ... - September 9th, 2018
- Cryptocurrency "miners," utilities look for ways to get along ... - August 29th, 2018
- Cryptocurrency: Virtual money, real power, and the fight ... - August 28th, 2018
- Pornhub Now Accepts PumaPay Cryptocurrency - August 27th, 2018
- NK hackers target Mac users with trojan cryptocurrency app ... - August 27th, 2018
- Cryptocurrency: The unlucky investors who got in at the wrong ... - August 26th, 2018
- cryptocurrency coins Archives - The Industry Spread - August 26th, 2018
- cryptocurrency Archives - Page 6 of 6 - The Industry Spread - August 26th, 2018
- Cryptocurrency investment in SMSF - hallandwilcox.com.au - August 26th, 2018
- How To Choose The Best Cryptocurrency Wallet - Crypto News AU - August 26th, 2018
- Courses | Cryptocurrency Australia - August 26th, 2018
- What Every Investor Should Know Before Buying Cryptocurrency ... - August 26th, 2018
- The biggest cryptocurrency hack in the history of blockchain - August 26th, 2018
- After the Bitcoin Boom: Hard Lessons for Cryptocurrency ... - August 21st, 2018
- Cryptocurrency Rankings | CryptoSlate - August 14th, 2018
- Bitcoin price falls after SEC postpones key ETF decision - August 12th, 2018
- Brokers Cryptocurrency Deals Are Focus of SEC Review ... - August 7th, 2018
- 7 Cryptocurrency Predictions for the Rest of 2018 - August 7th, 2018
- Have a Cryptocurrency Company? Bermuda, Malta or Gibraltar ... - July 31st, 2018
- Bitcoin price live: Latest updates as cryptocurrency ... - July 22nd, 2018
- 2018 Bahamas Blockchain & Cryptocurrency Conference - July 16th, 2018
- Best Cryptocurrency Trading Platform 2018 | Top Crypto ... - July 13th, 2018
- Cryptocurrency: Advantages And Disadvantages Explained - July 12th, 2018
- ATB Coin - The fastest and most secure payment system - June 19th, 2018
- An Illustrated Glossary of Cryptocurrency Slang (Infographic) - June 19th, 2018
- Apollo All-in-One Cryptocurrency - June 3rd, 2018
- Cryptocurrency News, ICO Database, Coin Rankings and ... - May 25th, 2018
- CoinLib - Cryptocurrency prices now - May 21st, 2018
- Cryptocurrency Market Capitalizations | CoinMarketCap - May 4th, 2018
- CryptoCurrency Market , Coin Prices & Charts, Crypto ... - April 28th, 2018
- Nasdaq open to cryptocurrency exchange in future, says CEO - April 27th, 2018
- The 4 Top Cryptocurrency Mining Stocks -- The Motley Fool - April 27th, 2018
- One in five financial institutions consider cryptocurrency ... - April 27th, 2018
- New hacks siphon private cryptocurrency keys from ... - April 27th, 2018
- What Is Cryptocurrency? - dummies - April 21st, 2018
- Cryptocurrency Market Surges to $365 Billion, Start of a ... - April 21st, 2018
- BTCMANAGER | Bitcoin, Blockchain & Cryptocurrency News - April 16th, 2018
- How to keep your cryptocurrency safe - CNET - April 11th, 2018
- How do I report Cryptocurrency Mining income? - TurboTax ... - April 4th, 2018
- When do you report Cryptocurrency investments? - TurboTax ... - April 4th, 2018
- Trading Cryptocurrency in 2018: The Definitive Guide - March 14th, 2018
- How would one operate a Cryptocurrency Mining Pool and ... - March 13th, 2018
- Coinbase cryptocurrency index fund - Business Insider - March 10th, 2018
- Cryptosomniac | Cryptocurrency Price Tracker - Bitcoin & Eth ... - February 24th, 2018
- Cryptocurrencies News & Prices | Markets Insider - February 22nd, 2018
- I started cryptocurrency mining at the end of 2017 and was ... - February 20th, 2018
- Cryptocurrency News - Bitcoin, Ethereum, NEO, ICO startups - February 8th, 2018
- 7 Best Cryptocurrency Exchanges to Buy/Sell Any ... - February 8th, 2018
- Electroneum. The Mobile Cryptocurrency. - February 8th, 2018
- Cryptocurrencies trading | your guide in the world of trading ... - February 5th, 2018
- Robinhood trading app introduces cryptocurrency - money.cnn.com - January 28th, 2018
- Robinhood adds zero-fee cryptocurrency trading and tracking ... - January 28th, 2018
- Cryptocurrency Price Prediction, Comparison, Analysis - January 22nd, 2018
- South Korea's major cryptocurrency exchanges ... - reuters.com - January 13th, 2018