5 years ago, my brother bought me a bitcoin as a Christmas gift for $13. At the time, I thought it was ‘kinda cool’ and didn’t think much more of it.
Now, my bitcoin is worth over $4400. Talk about a good Christmas gift!
Early buyers of bitcoins are now making a lot of money. For thought: one of the first notable public uses of the bitcoin was 10 000 bitcoin for 2 Papa John’s pizzas - the equivalent of $44 000 000 CND for 2 pizzas.
It is worth noting, that cryptocurrencies are good for environmental sustainability. A Nature interview with Guillaume Chapron explains why:
Q: How can it help the environment?
A: Environmental problems emerge because we lack trust. The environmental crisis grows in a fertile ground, which is the multiplication of intermediaries. To take an example, if you buy a fish at the supermarket, the supply chain is very long. The supermarket might not even know where it came from. And so there are multiple opportunities for environmentally unsustainable goods to enter the supply chain. A blockchain-based supply chain would mean that when you buy a fish, you scan a QR code [like a bar code] with your smartphone, and you see every step. And you know that it cannot be falsified.
The blockchain can also change how we treat ownership. In many developing countries, land rights are not properly defined and a government or a company could claim a land that is owned by a local community. So if we were to put a land registry on the blockchain, it would be immutable. We could not falsify that land registry.
The blockchain can also influence policymaking. Blockchain voting is a very cheap and secure way of organizing elections. Now, if you want to organize an election on how to manage a natural resource, whether it’s a forest or fishery, you need to plan the infrastructure, you need the ballot boxes, you need to tell people to go out and vote that day. That takes a lot of money, a lot of time. And in the end maybe people may not trust the results. With a blockchain, you could vote with a smartphone and your cryptographic identity and achieve strong security.
The fourth way is by changing incentives. A blockchain can ensure that an event will happen. That sounds a bit strange, but if you put a contract on the blockchain, you can include business logic as computer code. When a condition is met, the contract will be automatically executed. For example, we could have satellites remotely monitoring biodiversity, and if we reach a certain amount of biodiversity in an area we could reward the local community with immediate and direct payment. You could say, “How are you going to pay communities if they don’t have bank accounts, which is the case for about 2 billion people on the planet?” Then comes the blockchain again. They can simply create a bitcoin wallet as soon as they have access to the internet.
So, should we all run out and buy a bitcoin?
In my opinion - yes. It’s worth the risk.
However, if you’re looking for a low risk investment, it might not be for you, as explained by Claire Brownell in the Financial Post.
It is a volatile investment - for now. At some point, bitcoin will stabilize, and 1 coin is likely to be worth a lot at that point because there are a finite amount of coins and increasing numbers of people buying into it.
But beyond all that, I have to say, it’s fun to own one. If you have a little bit of cash set aside (even just $100 to buy a piece of a coin), I’d say do it. Being a part of an international story is exciting, especially if you’re not already involved in investment strategies. This international story could come crashing down, or it could be one of the most important advances in economics of our time. Either way, I say hop aboard the bit-train.
Image from: Bitcoinist - an amazing place for bitcoin news!
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