We tend to focus on who holds the Bitcoin. Such-and-such famous person has transitioned from bear to bull. Corporations are buying in. Banks are buying in. Governments are buying in.
Imagine banks, governments, and corporations all around the world wanted to buy out the #Bitcoin network, and a lot of the current holders were willing to sell near all time highs set three years prior.
"Imagine" it.
Total Elon Musk is Tweeting to Michael Saylor about switching from USD reserves to BTC reserves. Musk is somewhat of a troll and also Tweeted: "One word: Dogecoin" and Dogecoin subsequently spiked 25%. Yep, people are tools and Musk is a troll. Doesn't mean he won't buy in sooner or later.
Rather than asking who holds Bitcoin we should be asking who doesn't hold it.
- Amazon
- Tesla
- Microsoft
- Apple
- Oracle
- Intel
- AMD
- Netflix
- Cisco
- insert_tech_company_here
There's a good reason why tech companies haven't bought into Bitcoin yet. Setting aside liquidity issues, why would a tech company buy into tech when they can just make their own tech? Bitcoin is open source. Why not just make a corporate coin and sidestep the whole shared economy thing?
They don't yet realize that it's not the tech that makes it valuable, but the network, and you can't fork a network.
Oh, they will.
You can be damn sure that every tech company will have its own coin. To all the conspiracy theorists that are still convinced we are headed toward a one-world-currency, you've already been proven wrong, and you need to get over and accept this new reality. We are clearly headed in the exact opposite direction. They can't all be winners.
Facebooks Libra Diem is being used as an example now, which is obviously ridiculous. Diem isn't going to magically become the world's currency. None of the central banks are on board with that and none of the tech companies are either. You don't even have to add actual crypto to the mix to realize that conspiracy is dead in the water.
Take a look at the tech companies that were associating with Libra before they got absolutely bitch slapped by the central bankers. See any tech companies? Didn't think so. That's because BIG Tech companies have no reason or incentive to buy some other tech company's bullshit when they can just clone the system and roll it out under their own brand and loyal community. That's what this is about: community, and all successful brands have a diehard community.
For the same reason banks don't necessarily want to buy into XRP is the same reason tech companies don't necessarily want to buy into Bitcoin. Why buy Bitcoin when you can just make another token under your control. The tech companies don't "get it" yet.
Diehard Bitcoiners have been spewing a narrative of financial freedom through Bitcoin for over a decade now. The tech companies aren't interested in that. However, they are just starting to realize what Bitcoin actually is: a way for them to store their value directly on the Internet and cutting out these pointless central banker middle men who have been eating their lunch for generations. Now there's a message the bloodsuckers can stand behind.
Because Bitcoin isn't one thing for one group of people. Bitcoin is abundance technology for everyone and it means something different to everyone. It is versatile and is spreading throughout the world like a virus on flat architecture. It creates a playground that puts everyone on more equal footing than they had before, and eliminates much of the corruption of the old legacy system.
Gold 2.0
I know I've made a lot of points in the past about how it's very stupid to compare Bitcoin to Gold 2.0, but there is one aspect that is quite accurate. While a digital asset can't really compete with physical stores of value (and doesn't need to) we likely will see the return of currencies that are backed by it.
USD used to be backed by gold/silver; the currencies of the future will be backed by Bitcoin. I imagine the same pitfalls of such pegs will suffer from the same problems.
https://seekingalpha.com/article/4048750-problem-gold-backed-currencies
It's simply not a good idea to peg a currency to another asset; the network should be able to stand on its own, create its own wealth, and govern itself without the need of some other asset to give it perceived strength. Regardless, I can already see where this is going.
Many corporate entities have been stepping forward and creating stable coins pegged to the USD they have in the bank. Their corporate reserves peg the value of their stable coin to $1. It's a pretty smart thing to do, because issuing a stable-coin generates revenue from exchange fees and the ability to buy low and sell high to maintain the peg. It's basically just free money for any corporation that also controls a centralized exchange or is the custodian of funds like Paypal.
However, it becomes very obvious that all corporations are going to start transitioning to Bitcoin reserves. Therefore many of the coins that they issue will be "pegged" to Bitcoin and/or fiat going forward.
So imagine a corporate coin on an enterprise blockchain that's solely controlled by said corporation. They can "peg" their shitcoin to Bitcoin but at the same time print as much of it as they want, devaluing the coin at a profit to themselves.
Current central banking regulations absolutely ban this kind of behavior currently, but guess what? Central banks are getting weaker and weaker by the year, and just like they were easily able to slap down any digital currency that tried to take root pre-Bitcoin, the abundance technology of the future is going to let corporations get away with crazy shit like this.
Tech companies haven't fully realized yet that Bitcoin is not the savior of the people, but simply another way for them to store their value directly on the Internet and make a metric shit-ton of money using all kinds of new tricks that could have never existed before.
That's why they haven't bought in yet... but we can see that 2021 is likely the year that the floodgates explode on that front. The supply shock is going to be insane and Bitcoin will be trading for over a quarter million dollars a coin in less than 18 months.
Rather than trying to shortcut Bitcoin and go directly to making their own currencies, they are going to realize that this "shortcut" is not viable and will only serve to get them cut down at the knees by central bankers. They've already seen what happened to Diem, and they won't make the same mistake.
Rather Bitcoin will be a vessel for storing massive amounts of value that is transferable anywhere in the world. As the most secure network in the world, Bitcoin does not exist to service the peasants. It exists to serve the richest people in the world. They don't care if fees spike to $100 per transaction. That's peanuts; an amazing deal given high volume.
At the same time this abundance does trickle down to the people. Obviously early adopters like us are going to be filthy rich if we just hold, easier said than done. But that is simply the "old boss same as the new boss" scenario. Many of us will be absolutely corrupted by the wealth that flows into our pockets. We aren't special. We aren't immune to greed. Except me because I'm special.
Bitcoin is going to fall into the background and will be just like the Linux operating system. You all use Linux and you all benefit from it, whether you know it or not. All abundance technology benefits everyone. If you went back 200 years and showed the people what you had, they'd think you were a god. They'd be very confused when you told them you were lower or middle class. Wealth is 100% relative to the people around us.
Conclusion
The people who benefit the most from Bitcoin don't even own any yet. I didn't think it was possible for strong-handed institutions to FOMO out of control, but this is a once in a lifetime opportunity that's going to knock even the strongest of hands on their ass.
Michael Saylor, a guy who no one even knows about yet, is going to go down in history as the "genius" that went all in first and fleeced all the corporations that came after. I bet he's even going to trade the market well and sell some after we x10 over the next 12-18 months. Don't be surprised if random and unknown MicroStrategy becomes a trillion dollar company within the next 5 years... but then again at that point many of the corporations won't even be paying attention to USD anymore. Fiat is so last week. Months behind.
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Hmmmm, wasn't there this tech company that tried to just buy up a community like just a few months ago (tRon cough)?
We have all seen were that went.
The interesting thing about these backed-by bitcoin coins is that the electronic trading will happen so fast, that the emperor will have no clothes, even just after he dons his newest finery.
Its going to be interesting!
Do you think those shit shovelling gold shovels are really real? That looks like a hellava buy!
Me, cuz I'm trying to survive
Looks like you're in a big club
good comment
Instructive
Very entertaining but instructive post.
Interesting to see you explain both Libra/Diem's failure and Bitcoin's success as basic economics of follow the smart money, see what they do right, see what they do wrong, then everybody repeat the right stuff, driving up the price.
Frontend-Backend
Second I like your analogy of the scary, hard to understand technology just disappears into the background. Most just run the frontend with no knowledge of the backend or the profits there. I spent a lot of time studying and writing about Steemit to try to teach people about how to earn both on the front end and back end, and the other ways in-between...
Some got it, some didn't, but most importantly it opened my mind to the many different possibilities out there.
Bankers not are popular
Lastly, As funny as it seems, Bankers are needed by all, but disliked by many/all?
Even big tech companies borrow from bankers, pay bankers interest and dislike the terms. Producers and workers are in different size boat, but essentially same boat, and bankers float that boat...for a price.
:)
Thanks, @shortsegments
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You'll get used to his style, this is a common post of his! I think it's well articulated and got some good opinions.
Too funny I didn’t even know they rebranded Libra. Not a big shock though since they did get shit on for trying to do something the banks weren’t ready for. I wonder if Borg was behind that or he just told some of his people to have fun and do what they want.
If we could get bitcoin to hit those prices man it will be some wild times. I think it would be a common tactic to peg currencies to bitcoin as the backer but then we get into starting to work with Satoshi’s and stuff instead of the whole coin.
The world banking cartels are already foaming at the mouth thinking they are going to control things so well but the awesome part is that we have an ingrained desire to buck the system and find any loopholes we can.
I think Amazon will be the first real one. It makes sense because you can buy actual stuff and they are all already training people how to behave on their platform.
I only have .2 btc which was actually my change for a transaction back in 2014. I can't seem to bring myself to buy more. So if it goes to 100K it won't change my life. But hive might. But even if hive does a 10x I will only have $15k worth. So I either have to earn a lot more hive/leo or find some money to invest. Right now I'm investing in food.
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Another great post!
At what point do you believe we will see central banks throw in the towel and start FOMOing into Bitcoin? I believe that's a possibility once the tech giants are all on board. Under that scenario, fiat currencies would become mere centralized transfer mechanisms for the value stored in BTC. What if the US dollar, the euro etc. became second layers to BTC? :D
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Even central banking is a pyramid. The central banks at the bottom of the pyramid who are hyperinflating will be forced to enter Bitcoin much sooner than the others. It will be interesting to see what kind of an effect this has on their local countries.
Yes, I agree.
What a great potential equalizer that is! Marginal countries forced to consider radical ways to fix their problems will get the early adopter benefits!
I guess those countries will better be able to stay solvent.
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Great analysis.
Bancor (the original DeFi ICO) introduced me to the concept of the long tail of cryptocurrencies and I've always been a believer in the idea that there would be a huge number. Every little niche will have its own valuable cryptocurrency.
But BTC is the big daddy, the huge stable anchor of the whole system.
I agree that BTC will be mostly for huge transactions between corporates and whatever is left of central banks. But many of the early adopters and HODLers will still have it when 1 BTC = $100 million.
I wonder which central bank will be the first to buy BTC to secure its fiat currency.
Israel is buying huge amounts of US$ at the moment to try to stop the Shekel skyrocketing more. As one of the few advanced countries legally unable to print money will nilly, the Shekel is at 12 year highs against the US half dollar.
Very well said. I like this kind of posts rather than those with the dates and price predictions.
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Me too. There's only so much "technical analysis" one can stomach. Same thing different words most of it.
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STOPTo support your work, I also upvoted your post!
I also agree that every tech company would go for their own coin but it will work out only if they have proper takers. Not all the company owned coins are successful. A strong network like BTC and ETH are required. Even though Hive has big potential than many other blockchains, Hive is still struggling to grow.
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This line is an epic relief in a very serious matter.
You have broken it down well and let's see if BTC will be welcome by the tech companies next year
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Saylor claimed that Microstrategy will hold their Bitcoin for 100 years; very unlikely that they will when the FOMO is at fever pitch but I just wonder what that will mean for the company.
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At what point do you believe we will see central banks throw in the towel and start FOMOing into Bitcoin? Do you think those shit shovelling gold shovels are really real? That looks like a hellava buy!
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Good analysis, @edicted.
I am curious to see how Libra will perform in this "war field".
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Diem will probably do pretty well considering their gigantic built-in community and the green-light from regulators.
Well written post @edicted. Appreciated!