This is not talking about cars this is talking inside of a car. Today’s topic is about bitcoin. You may have heard of it. It’s what they call a crypto currency. A decentralized, non-government backed currency that is value based on supply and demand. That’s the gist of it, it’s not exactly real dollars but you can exchange your dollars through different exchanges for that. And based on supply and demand the value can go up and down.
I’m pretty active on Linkedin, I got about, right now about 4,000 connections. Not a lot by many, a lot by others. And I see posts all the time on there about invest in bitcoin, get it going, it’s going sky high, it’s gonna go a lot higher.
Maybe that’s true. I cannot predict the future. Maybe bitcoin is gonna go super, super high and maybe eventually gonna make mountains of money and some already have. Is it ever gonna go mainstream?
I’d be very surprised. And I make these ideas based on something, which doesn’t exist anymore, called Liberty Reserve. That was another crypto currency, decentralized, well, that was more centralized but it was permanent, non-refundable money that was not backed by government similar to bitcoin. And that was just chugging away, doing it’s thing and I had some stuff in that buying and selling stuff and all the sudden, one day the government sees the whole thing and it all went away.
Anybody had money there it just up and evaporated. And that was a lesson for me in this area, there’s lot of legitimate uses for that and there’s lots of legitimate uses for bitcoin. The problem is that the government has a history of doing everything in their power, which is substantial, doing everything in their power to get involved in things that can be used by people like drug dealers and drug trafficers and things like that. So being that its a crypto currency, non-centralized, make no mistake, bitcoin is being used for many wildly illegal and immoral and horrible things. And maybe it’s only one percent, maybe 10 percent maybe 20, I don’t know how to measure that, but make no mistake it is being used for these horrible things that the government will try very, very hard to stop. And because of that they have a habit of throwing out the baby with the bath water, so to say, because it can be used by some people for horrible, horrible things they might really go after it.
And nine out of 10 people that use it for something legitimate get caught in the get caught in the crossfire. That’s what exactly happened with Liberty Reserve. Lot of people used it for many legitimate reasons but because some use it for bad things like drug dealers, human trafficers, et cetera it’s an easy way to transfer money across country lines, that’s the appeal of these, because it gets used for that eventually the government’s gonna come after it and eventually they’re gonna want to get their, if they let it be, and you’re gonna say yes, it’s decentralized how can they come across it? I don’t know. FBI, CIA, US government, governments around the world they can do a lot of things.
So would I be surprised if it goes away, no. When, I don’t know. The bigger it gets the more likely it’s gonna be for a target. But if the governments let it be I’m sure they’re gonna want their cut of profits for tax things because governments always wants their cut of taxes. So if you’re gonna invest in bitcoin who am I to stop you, I can’t predict the future. But what I can do is learn from the past.
I lost some money when Liberty Reserve overnight evaporated and that same thing might happen to bitcoin, it might not it’s harder to do, decentralize. But at the same time, the government is pretty powerful and they don’t like people using things because you say you gotta send $10,000 from here to Afghanistan that’s something that’s hard to do through traditional banking channels but it’s easy to do through bitcoin and if you were the kind of person that wanted to do that that would probably get someone, get a red-flag of attention you might not want. So if you want to invest in bitcoin, be careful. Maybe you can make some money. Maybe lots are gonna make lots of money. Maybe it’s gonna take over and become the biggest currency in the world, I’m not so sure. History has said otherwise. So be careful, be smart. If you’re gonna do it hedge a little bit. If you go all in there’s a massive risk-reward relationship there.
You might go all in you might make hundred times on your money, you might lose everything. So be careful, be smart and my advise would be to hedge. If you’re gonna go in hedge. But my bigger advise is, it’s gonna blow over at some point. Maybe even two, five years, gonna be 10 years but I’d hate to have, wake up one day and the whole bitcoin system evaporates overnight.