Because it is currently en vogue right now, I would like to announce that I’m launching my own cryptocurrency next week.
Let us call it “kingcoin.”
Nah, that is way too self serving.
How about “muttcoin”? I’ve always had a soft spot for mixed breeds.
Yeah, that’s perfect – dogs are loved by everybody.
This’s the biggest thing since fidget spinners.
Congrats! Everyone reading this’s gon na get one muttcoin when my new coin launches next week.
I’m going to evenly distribute one million muttcoins. Feel free to spend them anywhere you like (or right where anyone will accept them!).
What is that? The cashier at Target said they would not accept our muttcoin?
Tell those doubters that muttcoin has scarcity value – there will only actually be one million muttcoins in existence. In addition to that, it’s backed by the full faith and credit of my desktop computer’s 8 GB of RAM.
Also, remind them that a decade ago, a bitcoin couldn’t even buy you a pack of chewing gum. Now one bitcoin can buy a lifetime supply.
Plus, like bitcoin, you can store muttcoin safely offline off thieves and hackers.
It’s essentially an exact replica of bitcoin’s properties. Muttcoin has a decentralized ledger with impossible-to-crack cryptography, and all transactions are immutable.
Still not convinced our muttcoins will be worth billions in the future?
Effectively, it is understandable. The truth is, introducing a new cryptocurrency is significantly harder than it appears, or even downright impossible.
That is why I believe bitcoin has reached these heights against all odds. And because of its unique user network, it will continue to do it.
Sure, there have been setbacks. But each of these setbacks has ultimately resulted in increased prices. The latest sixty % plunge will be no different.
The Miracle of Bitcoin
Bitcoin’s success rests in its power to make a global system of users who are either happy to transact with it now or even store it for later. Future prices will be based on the pace that the network grows.
Even in the face of wild price swings, bitcoin adoption continues to grow at an exponential rate. There are now twenty three million wallets open globally, chasing 21 million bitcoins. In a few years, the number of wallets can rise to include the 5 billion people on the planet connected to the net.
Sometimes the new crypto converts’ motivation was speculative; other times they were trying to find a store of value away from their own domestic currency. In the last year, new applications including Coinbase have made it even easier to onboard new users.
Should you have not noticed, when individuals buy bitcoin, they talk about it. We have that friend who bought bitcoin after which wouldn’t shut up about it. Yes, I am guilty of this – and I am certain quite a few readers are too.
Maybe subconsciously, holders become crypto-evangelists since convincing others to buy serves their own self interest of increasing the value of the holdings of theirs.
Bitcoin evangelizing – spreading the good word – is what miraculously led to 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. On the other hand, humanity has never been as connected.
The Idea of Money
Bitcoin started as an idea. 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 idea that a network of users value it equally and would be ready to part with something of equal value for your form of money.
Money has no intrinsic value; its value is purely extrinsic – just what others think it is worth.
Take a look at the dollar in the pocket of yours – it is really a fancy piece of paper with a one-eyed pyramid, a stipple portrait and signatures of people which are important.
To be able to be useful, society must view it as a unit of account, and merchants must be willing to accept it as payment for goods and services.
Bitcoin has demonstrated an uncanny ability to reach and connect a community of millions of users.
One bitcoin is just worth what another person is willing pay for it. But if the community continues to expand at an exponential rate, the limited supply argues that prices are only able to move in one direction… higher.
The Bottom Line
Bitcoin’s nine year ascent has been marked with enormous bouts of volatility. Therewas an eighty five % correction in January 2015, and several others over sixty %, including a colossal 93 % drawdown in 2011.
Through every one of these corrections, however, the network (as measured by number of wallets) continued to expand at a quick pace. 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 just need a little price volatility in muttcoin to attract new users…
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