Since it’s currently en vogue right now, I’d like to announce that I’m launching my own cryptocurrency next week.
Let’s call it “kingcoin.”
Nah, that is 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 is going to be the biggest thing since fidget spinners.
Congrats! Everyone reading this’s likely to receive one muttcoin when my new coin launches next week.
I am going to evenly distribute 1 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 wouldn’t accept our muttcoin?
Tell those doubters that muttcoin has scarcity value – there’ll only actually be one million muttcoins in existence. Furthermore, it is 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 is able to buy a lifetime supply.
Plus, like bitcoin, you are able to store muttcoin safely offline from hackers and thieves.
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?
Well, it is understandable. The point is, introducing a new cryptocurrency is much tougher than it appears, or even downright impossible.
That’s the reason I believe bitcoin has reached these heights against all odds. And due to its unique user network, it will continue to do so.
Of course, there have been setbacks. But each one of these setbacks has eventually resulted in higher prices. The recent 60 % plunge will be no different.
The Miracle of Bitcoin
Bitcoin’s success rests in its ability to create an international community of users who are either willing to transact with it now or keep it for later on. Future prices will be influenced by the pace that the community grows.
Even in the face of wild price swings, bitcoin adoption continues to grow at an exponential rate. There are now 23 million wallets open globally, chasing twenty one million bitcoins. In a several years, the number of wallets are able to rise to include the five billion people on the planet connected to the net.
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Sometimes the new crypto converts’ motivation was speculative; other times they were trying to find a store of value away from their very own domestic currency. In the last year, new applications like Coinbase have made it even simpler to onboard new users.
In the event you have not noticed, when people buy bitcoin, they talk about it. We have that friend who bought bitcoin and then wouldn’t shut up about it. Sure, I’m accountable for this – and I am sure quite several readers are too.
Perhaps subconsciously, holders become crypto evangelists since convincing others to buy serves their own self interest of increasing the value of their holdings.
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 under a decade?
No religion, political movement or technology has ever witnessed these growth rates. Nonetheless, 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 is the notion that a network of users value it equally and would be ready to part with something of equal value for the form of yours of income.
Money has no intrinsic value; its value is purely extrinsic – only what others think it’s worth.
Check out the dollar in your wallet – it’s really a fancy piece of paper with an one eyed pyramid, a stipple portrait and signatures of important folks.
To be able to be handy, society must view it as a unit of account, and merchants must be willing to accept it as payment for merchandise and services.
Bitcoin has demonstrated an uncanny ability to reach and connect a community of millions of users.
One bitcoin is only worth what the following 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, plus several others over 60 %, including a colossal 93 % drawdown in 2011.
Through each of these corrections, nevertheless, the network (as measured by number of wallets) went on to expand at a rapid pace. As some speculators saw their value decimated, new investors on the margin saw value and became buyers.
The abnormal levels of volatility are actually what helped the bitcoin network grow to 23 million users.
Hey, maybe we just need a certain amount of price volatility in muttcoin to attract new users…