Cryptocurrencies are all the rage and none more popular than bitcoin. The problem is, the only thing valuable about bitcoin its blockchain platform. To make matter worse, there is nothing proprietary about blockchain technology. I could start my own blockchain-based cryptocurrency tomorrow called Bayani’s Boodle or Fireball’s Frogs (horse racing term) and it would be just as useful as bitcoin.
Therein lies the problem. For bitcoin to be worth anything it has to have a practical use. It has to be secure and it has to be exchangeable.
Does anyone use bitcoin for purchases? How useful is a currency that vacillates 50% up or down every month?
Is it secure? Well, your bitcoin is a 64-digit code (key). Would you feel safe putting $100k into one 64-digit number, which if lost, can never be recovered? If you are afraid of losing your key, you can get a digital wallet, which stores your key so it can be accessed with a simple password. However, if your password were to be stolen, your life savings could be gone in a couple keystrokes.
A currency is worthless if people are not going to use it as a currency. Before you buy any cryptocurrencies, ask yourself what you are buying. If the answer is, hope and a prayer, then you’d probably have more fun speculating on property in Ozark, Missouri or heading to the track and betting on Santa’s Little Helper.
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