Cryptocurrency: The Minecraft of Your Financial Future?
To be clear, right up front, I am not a financial analyst or a professional money marketer, I am just a simple girl evaluating the potential of blockchain currencies that are the real-life, technological equivalent of monopoly money.
Cryptocurrencies appeared a few years ago as a form of digital cash. No material value exists for cryptocurrencies, there isn’t some stockpile of little blocks that support the value of these currencies like other familiar currencies that exist — the dollar, the pound, etc.. Gaining cryptocurrency can be done through a more traditional stock portfolio method through purchases in your material currency using stock platforms or investing groups. Alternatively, you can use your computer to mine these currencies.
Mining cryptocurrencies is similar to Minecraft, but instead of a pickaxe or other implement, you use your computer’s analysis and puzzle-solving capabilities to essentially put together a digital Rubiks cube for cryptocurrency values that are then confirmed on a global ledger called blockchain. Once it is confirmed as a legitimate transaction, you earn the value of that block.
Mining for these currencies, as you might imagine, is tedious. But you can use technology to do the hard work, with a set it and forget it approach to gradually earn pieces of these currencies. Over time you build wealth.
The Relationship to Precious Metal Style Wealth
Cryptocurrencies grow in value, ironically, as other types of currency fail in value. It is no real secret that over the years, due to some very complex reasons that involve inflation, capitalism, production, goods and services, that the value of “real” money declines or changes. And monies are valued differently in different countries or territories. Their value is measured in a global market.
Cryptocurrencies are no different, with the exception that they are entirely digital. Major players are adapting to this growing currency model and developing ways to spend it in real-time. However, we are likely a decade from these being a common transactional form of wealth. So why purchase or mine cryptocurrencies?
Their growth and accessibility have created an interesting area of the market that has consistently formed crypto into a formidable element of capital. Predictions of growth aren’t slowing down. That is not to say that there aren’t lulls or risk, please inform yourself more deeply. However, predictions hold that these currencies will not only remain, but they will also grow and as material currency fails, they will emerge as the new form of wealth.
The Numbers
There are a few reference points for cryptocurrencies. Bitrates keeps a handy prediction graphic that allows you to see the present market value and, reliably, a month out. However, it would be totally understandable that some folks would be uncomfortable with that time margin. Forbes has released its predictions for 2021. Predicting the value of invisible money is somewhat problematic.
What about more long-term predictions for cryptocurrencies? Bitcoin is largely the majority player in conversation, however, altcurrencies such as Ripple, Ethereum, Litecoin, and several others on this spectrum have a part in the conversation. Coininsider did the groundwork on compiling this research. Some predictions, even moderate or low-risk predictions, of the value of Bitcoin for example place it at $300,000 USD or higher in individual value by 2025 or 2030. That is compared to today's (February 19, 2021) value of around $55,000 USD. At that price point, however, there is a fair bit of gatekeeping even today for your average investor.
The solution, although much slower, is researching your preferred gamble and mining it over time as you gain income and build wealth in other ways. Choosing your cryptocurrency should be done with consideration and research. You should never invest more than you can lose or maintain and never sacrifice financial stability to wage a bet.
Cryptocurrency may seem complicated. But if you break it down inside the epistemological lense of an interconnected global market and think forward, understanding the idea behind your computer solving puzzles for a financial reward over time is a bit more hopeful than a free market of plummeting ethics based on for-profit extortion of consumers in need. Amirite?
