Because it’s currently en vogue right now, I’d like to announce I am launching my own cryptocurrency next week.
Let’s call it “kingcoin.”
Nah, that is far too self-serving.
How about “muttcoin”? I’ve always had a soft spot for mixed breeds.
Yeah, that is perfect – everybody loves dogs.
This’s going to be the biggest thing since fidget spinners.
Congrats! Everyone reading this is likely to receive one muttcoin when my new coin launches next week.
I’m going to evenly distribute 1 million muttcoins. Feel free to spend them anywhere you like (or anywhere anyone will accept them!).
What’s that? The cashier at Target said they would not accept our muttcoin?
Tell those doubters that muttcoin has scarcity value – there’ll only ever be 1 million muttcoins in existence. Furthermore, it’s backed by the full credit and faith of my desktop computer’s eight GB of RAM.
Also, remind them that a decade ago, a bitcoin could not even buy you a pack of chewing gum. Now one bitcoin can buy a lifetime supply.
And, like bitcoin, you can store muttcoin safely offline off hackers and thieves.
It is basically an exact replica of bitcoin’s properties. Muttcoin has a decentralized ledger with impossible-to-crack cryptography, and most transactions are immutable.
Still not convinced our muttcoins will be worth billions in the future?
Effectively, it is understandable. The point is, launching a new cryptocurrency is significantly tougher than it appears, if not downright impossible.
That’s why I believe bitcoin has reached these heights against all odds. And due to its unique user network, it will continue to do so.
Sure, there have been setbacks. But each one of these setbacks has subsequently resulted in increased prices. The latest sixty % plunge is going to be no different.
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The Miracle of Bitcoin
Bitcoin’s success rests in its potential to create an international network of users that are either prepared to transact with it now or put it for later on. Future prices will be influenced by the pace that the system grows.
Even in the face of wild price swings, bitcoin adoption continues to grow at an exponential rate. There are actually 23 million wallets open globally, chasing twenty one million bitcoins. In a few years, the number of wallets are able to rise to include the 5 billion folks on the planet connected to the web.
Sometimes the new crypto converts’ motivation was speculative; other times they had been looking for a store of value away from their own domestic currency. In the last year, new applications like Coinbase have made it even simpler to onboard new users.
Should you have not noticed, when people buy bitcoin, they talk about it. We have that friend who bought bitcoin after which would not shut up about it. Indeed, I’m responsible for this – and I am certain quite several readers are too.
Perhaps subconsciously, holders become crypto-evangelists since convincing others to buy serves their own self interest of increasing the value of their holdings.
Bitcoin evangelizing – spreading the good word – is what miraculously resulted in a price ascent from $0.001 to a current price of $10,000.
Who could have imagined that its pseudonymous creator, fed up with the global banking oligopoly, launched an intangible digital resource that rivaled the value of the world’s largest currencies in less than a decade?
No religion, political movement or technology has ever witnessed these growth rates. Then again, humanity has never been as connected.
The Idea of Money
As an idea was started by Bitcoin. To be clear, all money – whether it’s shell money used by primitive islanders, a bar of gold or a U.S. dollar – started as an idea. It’s the thought that a network of users value it equally and would be willing to part with something of equal value for the form of yours of money.
Money has no intrinsic value; its value is purely extrinsic – just what others think it is worth.
Have a look at the dollar in your wallet – it’s a fancy piece of paper with an one eyed pyramid, a stipple portrait and signatures of men and women that are important.
To be able to be handy, society must view it as a unit of account, and merchants must be happy to accept it as payment for goods and services.
Bitcoin has demonstrated an uncanny ability to reach and connect a system of millions of users.
One bitcoin is worth what the following person is willing pay for it. But if the community continues to grow at an exponential rate, the limited supply argues that prices are only allowed to move in one direction… higher.
The Bottom Line
Bitcoin’s nine year ascent has been marked with enormous bouts of volatility. Therewas an 85 % correction in January 2015, plus several others more than 60 %, including a colossal 93 % drawdown in 2011.
Through each one of these corrections, nonetheless, the network (as measured by number of wallets) went on to expand at a fast speed. As some speculators saw their value decimated, new investors on the margin saw value and became buyers.
The abnormal amounts of volatility are actually what helped the bitcoin network grow to 23 million users.
Hey, maybe we simply need a little price volatility in muttcoin to attract new users…