/, Equities/It’s One for the Money

It’s One for the Money

Cryptocurrency

For every Boom there is a Crash. History tells us that the higher prices fly, the greater the crash will be. Its inevitable, isn’t it?

The more emotional investing becomes the more irrational the pricing. There is an old saying that when “Taxi drivers start recommending stocks it is time to sell”

Welcome the new world of Cryptocurrencies, with BitCoin the biggest and boldest of them all.

Bitcoin invented by an unknow person or persons, calling themselves Satoshi Nakamoto, is an open-source currency and digital payment system.

It is a Peer-to-Peer network with transactions taking place directly without an intermediary like a Bank, PayPal or Western Union. Transactions are recorded in a publicly distributed ledger called blockchain.

According to Jon Peddie of Jon Peddie Research

“People are sending Bitcoins to each other over the Bitcoin network all the time, but unless someone keeps a record of all these transactions, no one would be able to keep track of who had paid what? The Bitcoin network deals with this by collecting all the transactions made during a set period into a list, called a block. It’s the miner’s job to confirm those transactions, and write them into a general ledger. They are paid for this work in like currency.”

These public ledgers are validated by 1,000’s of Bitcoin miners and mining pools who as well as mining Bitcoins also validate the blockchain ensuring it is safe, stability and secure.

I’d suggest you watch this short video (1.55mins) for a quick explanation of mining Bitcoins.

According to a 2017 Cambridge University research report there are 2.9 to 5.8 million unique users with a cryptocurrency wallet – most of them containing Bitcoins.

Bitcoin is not the only Cryptocurrency, there are plenty around – but it is the biggest. The New York Times stated recently that the combined value of both Bitcoin and Ether (another cryptocurrency) is greater than PayPal and nearly as much as Goldman Sachs!

It sounds exciting doesn’t it?

This new industry is not only set to have an enormous impact on the financial sector (AKA produce you know what, that will manifest you know where!) it is also driving other industries of the technology world.

You see its said that bitcoin miners have 13,000 times more combined number-crunching power than the world’s 500 biggest supercomputers. All these computers swinging their picks and shovelling their shovels as quick as they can in the race to unlock more Bitcoins.

cryptocurrency

This demand for computing grunt has been a boon for the hardware manufacturers (GPU Market) especially for such vendors such as Advanced Micro Devices (AMD) who have seen prices spike with a shortage of chips to go around. Regardless of the effectiveness of Bitcoin and blockchain alike, all of the associated technology gains will lead to improved productivity for all workers.

However, in the short term, the enthusiasm for Cryptocurrencies is most likely going to increase. Like any good boom it has to get past the ‘Euphoric’ stage into the delusional ‘This Time its Different’ stage. It doesn’t take too much imagination to envisage the logic that will be used to justify the future world changing benefits of this amazing new crypto world.

But mark my words it will end and there will be tears!

So in 2019 when your driverless UBER advises you in its best robotic voice to invest in cryptocurrencies it will sound the bell. But you can’t say you have not been warned that the ‘CRYPTOcurrencies’ will likely turn into ‘CRAPcurrencies’…..

 

IMPORTANT NOTICE

Disclaimer: Any opinions or recommendations expressed here do not purport to Financial Advice but rather should be considered General Advice and does not take into account your personal needs and objectives or your financial circumstances. You should therefore consider these matters yourself before deciding whether the advice is appropriate to you and whether you should act upon it. Should Financial Advice be sought, we suggest you seek such advice from an appropriately qualified advisor. Any yields, rental income, tax rates, interest rates, deprecation rates, inflation rates Dividends per Share (DPS) and Earning Per Share (EPS) etc shown are estimates only and should not be used as a guide to future performance. Past performance is not necessarily a guide to future performance and should not be relied upon for this purpose. Authorised Representative of PGW Financial Services Pty Ltd – AFSL 384713
By | 2017-09-09T00:47:49+00:00 September 8th, 2017|Cycles, Equities|0 Comments

Leave A Comment