The Case for Bitcoin
Weekly Investment Update | By Brian Schreiner
Bitcoin is the world's first globally accessible public money and the world's first cryptocurrency. It allows everyone with an internet connection to send and receive value to and from anyone in the world instantly and for free with no need to trust a middleman.
Today our most valuable public network, the internet, is an open infrastructure for information. We have a public network for money; it’s called cash (paper money) and it only works in face-to-face transactions. Any transaction involving cash (USD for example) that isn’t face-to-face requires a middle man who charges a fee. Bitcoin is the world's first public digital payments infrastructure and it’s free.
The adoption of technology takes longer than we realize. Bitcoin turns 17 this year. The first American homes used electric lamps around 1895 and it wasn’t until 1945 that 85% of American homes were electrified. The mass adoption of cell phones took 20 years. Washing machines took 40 years and email, which has recently been perfected, was a work in progress since 1972.
Bitcoin isn’t accepted everywhere; it's not often used to quote prices, and it's not always a stable store of value. But it is working, and the mere fact that it works without a middle man is a technological breakthrough.
Replacing payment systems run by corporations will pave the way for replacing other vulnerable infrastructure. Public blockchains are superior to government and corporate intermediaries because the existing infrastructure is consolidating, becoming more powerful, and experiencing increasingly severe failures, as evidenced by massive security/data breaches, fraudulent transactions and hacks, not to mention monetary inflation, corruption and collusion. These vulnerabilities are inherent in centralized systems.
Bitcoin transactions on the lightning network are now faster than credit card transactions and allow for easy cross-border transactions. Just as the internet decentralized communication, blockchains offer the potential to disrupt and revolutionize the global payment infrastructure.
Institutions have increased exposure and both main street and Wall Street are starting to recognize the favorable dynamics of the world’s largest crypto currency. Last year, the SEC approved 11 spot bitcoin ETFs and inflows were record-setting.
Bitcoin holds the promise of revolutionizing money at a time when the cracks in the foundation of our monetary framework are expanding. Michael Saylor, the executive chairman and co-founder of MicroStrategy, and one of the largest individual holders of bitcoin said, “Google is what happens when we pool information energy on a software network and bitcoin is what happens when we pool monetary energy on a software network… Bitcoin is a bank in cyberspace, run by incorruptible software, offering a global, affordable, simple and secure savings account to everyone with a smartphone."
The promise of bitcoin is lofty, but it has already become the dominant digital monetary network. If this trend continues, the next billion members will pay trillions to join it. We believe it makes sense to join before they do, or at least the risk of doing so offers the kind of upside potential that doesn’t present itself more than once or twice in a lifetime. α
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Interesting things I came across this week…
‘Stocks Only Go Up’ (Jesse Felder)
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Lies & Corruption in the Karen Read Trial (Microdots)
Karen Read Trial: Blueprint for Challenging Corrupt Power (PT)
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