I am an engineer by training and a project manager by profession. I did not pay attention to my Engineering Economics professor (yes, that is a thing) as a college freshman. I should have though. He said (and I am sure he was quoting someone else smart), "our spending rises to our level of income." If you make $100, you will spend $100. If you make $1 Mil, you will find a way to spend $1 Mil, unless you purposely stop yourself from doing so. I am sure there is a name for this, but as I said, I did not pay attention. So no matter how much money I earned personally in the last couple of decades, I always found a way to spend it. I fell into whatever that trap is called.
Thus, I've never had much extra cash on hand to buy stocks, gamble, etc. So I only have a few stocks in a retirement plan and a 401k now. And I started thinking about stocks compared to bitcoin, litecoin, ether, etc. etc.
And it suddenly hit me. (It's fun when I have an original thought!) Despite all being used as an "investment" by some people, there is no actual comparison between the major crytpo coins and stocks.
When I buy 1 stock for $100, I'm buying 1 unit of the value of a company at the moment.
The value of that 1 stock will fluctuate. But there are some critical limitations associated with it.
I cannot sell a fraction of my 1 stock to someone else or use it to pay for a product or service.
I am limited to selling that entire unit of the company's value and I am limited by the creativity of that company's limited number of managers and employees to increase the value of that unit.
But when I buy $100 worth of bitcoin (or other cryptocoin), I am buying into the value of multiple global decentralized monetary/technology/currency systems. I have the freedom to sell a tiny fraction of the value to anyone I wish or use it to purchase what I need. And there is an entire world of smart people using their time and energy to increase the value of those systems and create new ones. These systems and their uses are only going to get better and grow in value over time. At this point, I see few limitations.
Should I worry about volatility and stability of cryptos? I don't think so. I've worked for two companies with stocks that soared to $40+ and then eventually dropped to below $1. (A big thanks to all you board of director dudes for all those worthless stock options!)
If I like the underlying technologies, development communities, and use cases involved, I will buy some crypto. We are only at the beginning of the evolution. It is exciting to see and own a little tiny piece of the value of the future.
I wonder what that professor thinks of Bitcoin? hmmm...if I could only remember his name...
Upvoted!
I think that Bitcoin is the future! But then, one has to trade cautiously. Always invest the amount you are willing to lose.
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