Should I Buy Bitcoin Now Or Am I Too Late?

This question was originally published on Quora. Answer by Remy R. Hauxley.

POP.

Look at this bubble popping.

The lightest touch of an outside force and this once glorious little vision of rainbow water and soap — ceases to exist.

Where did the bubble go? It popped and now it’s gone. No trace remains. It’s vanished. Can’t find it, can’t bring it back, certainly can’t re-inflate it.

Is This About To Happen To Bitcoin?

Will the Bitcoin bubble pop and Bitcoin will cease to exist? Will it be no more?

I discuss this deeply in my book: Bitcoin vs the 2018 Recession. But for now let’s take a quick look at the answer:

If bubbles pop and cease to exist — why did we call the Dot-com era a ‘bubble’? When it popped did we stop using the internet? Was the internet gone forever? Or the 2008 mortgage crisis -- why did we call it the ‘housing bubble’? When it popped did we stop living in houses? Forever?

I take issue with the term ‘Bitcoin bubble.’ It causes panic. It implies Bitcoin may ‘pop’ and cease to exist -- forever. This fear paralyzes the mind. You see your hard earned money popping -- vanishing in an instant -- and all further thinking instantly stops. The visual is so simple, so powerful, we accept it as true. But what if it’s false? What if Bitcoin isn’t a bubble? What if Bitcoin is something else -- and our minds are too paralyzed to see it?

To illustrate imagine yourself as a hard working farmer in some dusty little village sleeping on the far flung outskirts of civilization. Each month you go to your village’s market. You trade bushels of wheat for shoes, for nails, for little sweets for your kids. Each trade is unique and the value of your wheat for your neighbors cows is always fluctuating based on crops, seasons and needs. That’s how you’ve always done it. That’s how your grandfather’s grandfather did it -- and as far as you’re concerned that’s how your grandchildren’s grandchildren will do it. Then one day a merchant arrives.

This merchant hails from a “city” -- a place you’ve never been to but know from tall tales and strange stories. The stories paint a picture of squalor, rampant violence, brothels, and drugs. Naturally you eye this merchant with a healthy dose of suspicion. Your suspicion doubles as he approaches you.

“I’d like to buy your entire harvest of wheat,” he says, a foreign twang to his tongue.

“I see,” you say, eyeing the merchant and his completely empty wagon. “And what do you offer in trade?”

“Trade?” he repeats apologetically. “No no, my good man. I will buy it from you -- with these.” At that he pulls a leather sack from his satchel. Onto his palm he pours shiny round bits of metal. Each bit is stamped with the profile of the monarch or king or whoever it is that claims to rule your lands -- though you’ve never seen this king in person, just the wars he’s caused.

“Excuse me?” you say, blinking in disbelief. “I’ve worked quite hard for this harvest, thank you very much. I won’t be trading my year’s work for shiny bits and baubles.”

“They’re called ‘coins’,” he replies patiently. “When you go to the city you trade them for food, drink, pleasurable company, anything your heart desires. Soon enough you and your neighbors will be using them to trade between yourselves!”

The words ‘soon enough’ sound like a threat to you, your neighbors, and the way you’ve all been conducting business for centuries. A stout group of yeomen promptly run the merchant out of town -- with a proper coating of tar and feathers for good measure.

And that’s how money started -- more or less. It had a rocky road. People feared money. They feared putting trust in it. What if they slaved all year long raising their cattle and chucking their wheat -- then traded it for round metal disks -- only to go to a city and find the metal wasn’t accepted for anything.

Bitcoin sits in a similar predicament. It comes from the internet, a place of both tremendous civilization and harmful vice. It’s associated with tall tales of drug lords and strange stories of hitmen-for-hire. The merchants peddling it are often ‘foreigners’ -- geeks and nerds who speak with strange words like ‘decentralization, hashpower, nodes, DDoS, and HODL.’ And then they try to convince you to accept this ‘magic internet money’ created by a king -- Satoshi Nakamoto -- who you’ve never seen. No wonder you’re skeptical.

Bitcoin hasn’t gained trust yet. It’s still exotic, strange, and fairly difficult to wrap your head around. But dispelling these misconceptions is only a matter of time.

Bitcoin Will Gain Trust

Perhaps when we start thinking we’ll push past the paralysis of thinking Bitcoin is a bubble. Perhaps then we will see Bitcoin for what it truly is: not a bubble -- but a new Boom. Like the industrial boom. Like the tech boom. Bitcoin is the beginning of the financial boom.

That is not to say we have rosy cheeks and sunny skies ahead. Each revolution has its sensational successes with equally miserable depressions. The industrial revolution contributed to wars just as much as it contributed to global progress. The tech revolution caused trillions of dollars of economic loss just as much as it ushered in a fantastic digital world. Bitcoin likewise has many more hurdles to jump. Prices will skyrocket and sink and climb and fall. New financial innovations will allow anyone with a smartphone to be their own bank, lender, creditor -- while traditional banks may collapse. Trust will fluctuate with alarming volatility.

But make no mistake. Bitcoin is not a bubble. It will not pop and cease to exist. Instead it will be a new boom. A financial revolution.

Enjoyed reading? You’ll enjoy my book: Bitcoin Vs. The 2018 Recession (Available in paperback and Kindle) Amazon.com: Bitcoin vs. The 2018 Recession eBook: R.R. Hauxley: Kindle Store