Is this you when it comes to Bitcoin?
Let’s think for a moment about what the world was like before there was any money. There were lots of people. Lots of communities. Lots of trades. In fact, just like today really because there were lots of wars and loads of drama too. People did “business” with each other, I was about to say just like today but of course not like today at all, however, you get what I mean. There were systems of exchange that worked most of the time and then broke down and a new one came along. Remember, there was no money yet!
Now imagine for a second a new thing came along called money. It just arrived overnight.
What do you think people thought when they saw that “new-fangled” stuff for the very first time?
“Err, you want my hog to roast for your big bash tomorrow and you are going to give me some weird paper in exchange? Hmm, on yer bike mate, I would rather take that pile of salt over there, those loaves and two of your finest laying chickens thank you very much”.
Now of course the other person would have been perplexed as to what a bike was because the wheel may have been invented long before money, but we are some way short of the first two wheeled balancing mobility machine!
Yes, the onset of a new way to exchange things – with something called money – would no doubt about it have taken some time to catch on.
That is where the world once again stands.
It is an absolute fact.
There is a “new-fangled” thing that is available across the entire planet and it is as if it has just been magically breathed into existence…overnight!
Now, like money it is a means of exchange.
And like the coming of money it is causing consternation…but then it is a brand new asset class. One of my mentors suggests it is the first new asset class available for people to own since The Bank of England created (they say “issued”) the very first government bond over 300 years ago.
What do you think people think of this when they see it for the first time?
“Err, you want my hog to roast for your big bash tomorrow and you are going to pay me (notice new word in sentence “pay” not “exchange”) with that stuff that doesn’t exist and wave your iPhone 6plus at me, on yer driverless car mate I want the folding stuff, the real thing, tangible money, thank you very much”.
There’s an old saying “taking a sledgehammer to crack a nut” and yes I get I just did that to make my point. I also get the picture I am painting has some historical holes! But you get it, right?
The world is generally looking at this new asset class with a very circumspect view…and yet it has actually been around since 2009 and it really is here to stay.
I am of course talking about Bitcoin aren’t I?
No, actually sorry, I’m not.
Well, yes I am a talking about Bitcoin, but not just that. You see Bitcoin is like the US Dollar of what we perceive to be money today, just one version within the entire asset class. What I am talking about is actually called Cryptocurrency, although I rather like the latest phrase I saw, the “Giga-coin”.
So, let’s go back to our historical, albeit rather warped, story.
Imagine when money did first arrive that it did so with 700 different types: from the British Pound all the way round the world of various wild and wonderful currencies to the US Dollar. So they all just appeared together. The US Dollar, being the World’s dominant currency, would stand out as the equivalent of the Bitcoin in our new asset class. What of the other 700 versions? You see there are 700 other types of cryptocurrency right now…seriously there are! Bitcoin is one of 700 cryptocurrencies that exist and trade already and estimates suggest that there are another 300 in the process of being formed. Universal adoption across 7.5 billion people may well mean there’s space for all and more. However, just like money as we perceive it, there are going to be some real stinkers – think Zimbabwean Dollar – and there are going to be others that super perform – let’s say the Kuwaiti Dinar – and this is panning out exactly in that way right now. Some cryptocurrencies have already come and gone. Others have had exponential growth of thousands of percent over the last year – although often from a very low base.
It is fact, Cryptocurrency is here and it is staying!
OK so it is confusing. It is unknown. But so was money all those years ago. More recently so were mobile phones and looked what happened. Is being confused by this a good reason to remain in the dark about it?
Gaining knowledge and choosing not to be involved is one thing – but choosing to remain without the knowledge is not a great excuse when huge change occurs.
So, these are my initial pointers:
- Do not just buy anything from anywhere
- Do not just join something that someone you know has told you is a great system that pays out in Bitcoin or any other cryptocurrency
- Think like Warren Buffet: yes do your research, but do not dally forever and take a position in the market – no matter how small.
- Choose a portfolio of three…just three: think established, and a rising star, and one that is brand new
- Understand why those and not others
- Research how you buy them and before you buy them how you can sell them!
- Begin in the same way as Bill Gates did…and a whole host of other big investment gurus…simply begin, but small.
Or keep reading my updates, build your knowledge and then make your choices…I have my three and they are working for me…they may not for you, but I will tell you which three and why.
If you think for a moment I am wrong ask yourself this: why did the major Dutch bank ABN-AMRO create its own crypto wallet service abd why has the Bank of China begun to look at the possibility of building their own cryptocurrency on the blockchain platform (I will cover blockchain another time)? There are many other examples giving this too much credit to dismiss because it feels weird…so did money a long time ago!
How do I know this? Because I do what I always do when I don’t understand something. I deem whether it is or it is not worth my time to do my research; if it is likely to have enough relevance to my life. When I decide it is worth my time, then I do my research, in my own unique way. That always includes going to those that I perceive to be the experts and yes that means once again I have invested in my own financial education: £1000 worth of crypto coaching and “how to” and £200 spent on an investment seminar. Both decisions will save me a tonne by avoiding the really rookie mistakes and both will make me many thousands over what they cost, because I gained so much knowledge. They were truly priceless for both the education and the confidence…and of course contacts!
And the CJP quirk in the research? Always that too. I set off to London and recorded the step by step process of finding a retailer to spend my Bitcoin in and an ATM to buy more Bitcoin with cash. Why? Because it is the best way to learn and I truly wanted to see if I could make the intangible become a reality. That cup of coffee and toastie were very real! If you would like to see those videos keep reading the updates.
One thing I learnt that I loved and fits entirely with my Rich Dad Coaching was the concept of finding the cryptocurrencies with the odds stacked in your favour! It is simple, a little bit of knowledge goes a very long way when the rest of the world is either acting without it, panicking to enter the market in any way at all or not even sure how to get started.
Once again I believe even more strongly in Mike Maloney’s words: “the greatest investment you can make in your own lifetime, is in your own financial education”. That is what I will keep doing…step by step…you are very welcome to walk the journey with me.