Who says there is no comedy in finance? The Mainstreet and institutional investors have been poking at the cryptocurrency space for hacks, crashes, and market volatility to establish a vulnerability narrative.
And now the FED, the main institutional player, the keystone figure of centralization, just crashed. Although we hope this won’t impact regular users in a big way, and hopefully, this will quickly be resolved, but this is a great example of karma at work.
Centralization just took a big L, thus showing many people just how important decentralization is. So please sit back and grab a hot beverage, as we will explain in simple terms why you should be excited about and what you should expect going forward:
Bitcoin is decentralized. Why is it important to you? What happened to the Fed is extremely unlikely to happen to Bitcoin. On the flip side, yes, there are scenarios that Bitcoin could be affected by outside info, but that should actually be treated as an advantage. It shows Bitcoin’s not perfect, thus not too good to be true.
Bitcoin’s fundamentals are intact. What does this mean? There is only 21 million Bitcoin in existence, and more of them are bought every day, compared to the numbers of newly mined Bitcoins.
Bitcoin is monetary energy. It means it’s a great way to not only store value but also make great returns. And thus, people can have a bank in cyberspace, to quote Micheal Saylor, to store their funds. This allows individuals and businesses to not only have funds at the ready, but it annihilates a lot of logistical issues as well.
Bitcoin follows the network effect of Metcalfe’s law. This means that the more users there are on a network, the more valuable the network becomes.
Institutions are coming. Institutional investors love regulation and transparency, and the more regulated Bitcoin will be, the more value major institutions will place in it, thus making Bitcoin a less volatile asset.We could go on, but basically, these are some of the most important reasons to be excited about Bitcoin and not be scared of short-term dips and regulations. Now looking at the flipside of Bitcoin:
It is a volatile asset and will remain volatile for quite some time, but that is due to high demand. People are taking profit along the way, which can be regarded as a new asset class’s growing pain.
The physical infrastructure and safety components are still lagging. There are solutions (that we won’t promote on this podcast) to store your cryptos in, like wallets, hard wallets, exchanges, etc. But all of them have inherent risks with them. You probably have heard the horror stories of millions worth of Bitcoin being lost or destroyed. And if one Redditor’s story is true, he had his crypto address and keys eaten by termites…Thus, storing crypto, in general, is still not the most user-friendly experience.On the upside, these issues are being tackled at break-neck speed. And now it’s a lot easier to get into crypto than even 3 years ago. It’s an exciting time to be in crypto: it has its risks and great benefits if done right.
For more news and developments in the crypto space, tune into our other episodes of “Flipside of Crypto” or head to our website dailycoin.com.
Continue reading on DailyCoin
